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Geoblocking: Is the Digital Single Market getting closer?
By Avv. Francesca Sutti and Dr. Fabrizio Rapicano
April 12, 2018
It is well known that e-commerce is increasingly "user-friendly" and reaches a vast plethora of users. However, it is not always easy to purchase from a foreign website: in many cases, the platform automatically redirects to the site of the country where the user is located. The reason for this mechanism is intuitive: the seller does not want to give up diversifying their commercial policies, especially pricing, among the various territories in which they operate.
However, this practice is likely to affect the free movement of goods within the Union countries. On the contrary, e-commerce is an essential tool in the creation of a single market, as it can overcome the distances of physical points of sale across European territory. The phenomenon, called geoblocking, is one of the most harmful commercial practices to the single market project, especially if its spread follows a growth trend.
In 2015, only 15% of European users (out of a total of 53% who had made at least one online purchase) managed to make cross-border purchases, while in 2016, 63% of online sites prevented cross-border purchases through various means, from the so-called automatic site redirection to the most diverse forms of (alleged) difficulties in completing the purchase. All this led Europe to adopt, on February 27, 2018, a new Regulation aimed at limiting this practice, in order to protect equal access to goods and services offered online from all points of European territory.
The Regulation will come into force on December 3, 2018. It imposes a much stricter approach than in the past, but is aimed only at preventing unjustified geoblocking practices that are likely to hinder the so-called digital single market: the ban therefore applies only to cross-border transactions. Furthermore, the Regulation in question does not oblige businesses to sell in all Union countries, nor does it impose price uniformity in the various Member States. Businesses will therefore still be free to diversify their commercial strategies from country to country.
The Regulation also recognizes that such a ban cannot be applied indiscriminately but must be subject to some objective and subjective exclusions. Thus, for example, selective distribution systems, so widespread in the luxury goods and high technology sectors, are exempt from the ban. Other exceptions are related to compliance with copyright protection rules, as a wide range of products and services covered by copyright, from books to music streaming, are excluded from the scope of the regulation. Now we just have to wait for 2020, when the Commission has planned to review the phenomenon.
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