Geo-blocking

Regulation (EU) 2018/302

Regulation (EU) 2018/302 addresses unjustified online sales discrimination based on customers' nationality, place of residence, or place of establishment within the Internal Market.

The Regulation came into force on 22 March 2018 and has been applicable in all EU Member States since 3 December 2018.

According to Article 8 of the Regulation, each Member State is required to designate one or more bodies responsible for providing practical assistance to consumers in disputes with traders arising from the application of this Regulation.

Several Member States have appointed the European Consumer Centres (ECCs) as assistance bodies under the Regulation. Many of these centres were already designated as contact points under the Services Directive. These centres, which together form a well-functioning EU-wide network, have established procedures and the necessary expertise to efficiently handle cross-border consumer claims.

The assistance provided by ECCs may include:

• Explaining consumer rights
  Informing consumers about their rights under the Regulation.
• Settling complaints
  Assisting consumers in resolving complaints with traders based in other Member States.
• Providing guidance
  Advising consumers on whom to contact or what steps to take if the ECC itself cannot resolve the issue.

In cases of unjustified geo-blocking or other forms of discrimination based on nationality or place of residence, the cross-border element is often a crucial factor. European Consumer Centres are experts in managing such cross-border complaints. Based on the complaints received, the ECC-Net can report on practical consumer issues and highlight the difficulties encountered by consumers.

Aim of the regulation

• Increasing the potential of the internal market
• Broadening consumer choice throughout the internal market
• Clarifying situations in which differential treatment is unjustified
• Enabling the application and effective implementation of non-discrimination rules throughout the internal market

Discriminations prohibited by the Geo-Blocking Regulation

The Geo-Blocking Regulation prohibits both direct and indirect discrimination based on the following factors:

• Nationality
• Place of residence
• Place of establishment of the customers
• Physical location of the customers, identified for example by their IP address
• Delivery address
• Language chosen
• Customer’s bank domiciliation or the country of issue of the means of payment

The entry into force of the Geo-Blocking Regulation has raised significant expectations among consumers, who hoped for better access to goods and services at more competitive prices throughout the EU. However, many consumers mistakenly believe that companies have an EU-wide obligation to deliver packages across borders. When delivery is refused, it often feels as though the Internal Market provides more freedom to companies than to consumers. While businesses can freely sell their services and establish companies or subsidiaries in other Member States, consumers remain reliant on traders agreeing to deliver to their location.

Conclusion

The scope of the Geo-Blocking Regulation remains unclear to many consumers. Complaints frequently arise about services not covered by the regulation, such as financial services, insurance, and copyright-protected works. The regulation’s lack of an obligation to deliver to a consumer’s country of residence often makes accessing all offers impractical or impossible.

Consumers continue to face issues such as redirection to national websites and persistent price differences, especially with major retailers who deliver across the EU but restrict purchases based on the consumer’s location. While consumers are often willing to pay higher delivery charges, they expect to buy goods from their preferred website. They feel that the ban on automatic rerouting has simply been replaced by the need to have a delivery address in the country of the national website.

Sales practices also reflect this issue. Traders can limit delivery to specific territories or apply sales to only certain products in certain areas, excluding consumers who wish to participate in sales from other regions. Marketplaces and platforms often refuse cross-border delivery due to selective distribution imposed by manufacturers, despite the European Commission’s penalties for anti-competitive practices that block cross-border sales. The concept of “shopping like a local” is mainly beneficial in border regions with short distances. For longer distances, consumers might resort to having purchases delivered to a cross-border transport company, a practice that was available before the regulation but is not always accommodated by traders.

Additionally, geo-blocking issues are linked to SEPA-related problems, where consumers are denied access to products or services due to the location of their bank account. Since 5 August 2014, EU consumers have had the right to open an account with any EU bank (Directive 2014/92/EU). Regulation (EU) No. 260/2012 also mandates that traders cannot refuse SEPA direct debit or euro transfers based on the consumer’s bank account location. Despite this, ECCs report frequent complaints from consumers who are denied access due to their bank account being in another EU Member State. The CJEU has ruled that SEPA direct debit payments cannot be conditional on residence within the national territory.

Similarly, some online traders only accept payment methods linked to specific countries, such as the Dutch iDeal or Belgian Payconiq, disadvantaging customers without accounts in those countries. National identification schemes, such as Sweden’s "person number," also contribute to discriminatory practices, with traders refusing services to consumers lacking these specific identifiers.

It is clear that not all traders have fully adapted to the Geo-Blocking Regulation. The ECC-Net is concerned by reports from consumers indicating that traders who previously accepted cross-border orders are now rejecting them based on specific Member States or other criteria.

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