The EU plans to ban geoblocking

July 19, 2016

The EU Commission wants to ban geoblocking. They believe geoblocking limits the consumer’s freedom to purchase goods from other online stores across Europe. Not everyone agrees with the proposal.

Different prices

The EU wants geoblocking to end to ensure that all goods from online stores in the EU should be made available for all EU consumers no matter their location. Geoblocking is a form of censorship where access is restricted based upon the user’s geographical location. This means that online stores can select which countries they wish to sell to and which they want to avoid.

Consumers might have experienced that they have been charged more for a product or service because of their geographical location. A Dane can experience to be charged more for an Italian product than a Frenchman would. This is because products are marketed with different prices in different countries.

All goods should be made available

The EU wants to create one total and open digital market. The European Commission wants to force all EU e-commerce sites to sell their goods to consumers of all member countries in the EU.

“Preventing unjustified geo-blocking is one of the actions of the Digital Single Market strategy. The Commission made a legislative proposal after assessing the responses from a public consultation held in 2015. The proposed regulation addresses the problem of customers not being able to buy goods and services from traders located in a different Member State, or being discriminated in prices or sales conditions compared to nationals.”

The EU also wants to remove the complex rules in regards to transportation of goods. The European Commission requires that all e-commerce sites have to indicate the price of delivery. When it comes to delivery costs now, cross-border fees can be up to five times higher than domestic postal services. According to The Irish Times, the Commission hopes that price transparency can influence change through competitive pressure. The Commission will therefore not be proposing caps.

Criticism from industry groups

Not everyone believes the proposal is appropriate. Certain industry groups have voiced their concerns. Markus Beyrer from BusinessEurope states his concern about the lack of clarity on certain elements of the proposal where loopholes may exist.

The German e-commerce association states that the proposal may interfere with commercial freedom by forcing retailers into cross-border sales. Anders Ladefoged from The Confederation of the Danish Industry shares that view stating that an obligation to sell to all of Europe can end up hurting small businesses and start-up companies.