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15 December 2016

Geoblocking and geo-discrimination to be prohibited

Why is my flights tickets price 20 % higher on a specific country version of a website ? Why is my amusement park ticket cheaper when I am abroad ?

It’s all related to geo-discrimination: geo-discrimination is a practice that restricts online access to content, prevents online customers from accessing and purchasing products or services, or applies different conditions to customers, based on the customer’s localization.

An obstacle to the unified market, says the European Commission.

To prevent such practices, the European Council agreed on 28 November 2016 on a draft regulation to prohibit geo-discrimination between member states.

The draft regulation is intended to remove only discrimination based on customers’ nationality, place of residence or place of establishment.

Certain activities, such as audio-visual, transport, and healthcare services, will be excluded from the scope of the regulation. Copyright rules will remain untouched.

The main points of the regulation are as follows:

  1. It is prohibited to apply different conditions for the access to goods and services, based on reasons related to the nationality, place of residence or place of establishment of the customer, when:
  1. the goods are delivered cross-border to a location in a Member State to which the trader offers delivery in his general conditions;
  2. the customer wants to receive electronically supplied services from a trader. By exception, when the main object of the service is the access to, or use of, copyrighted works, or the selling of copyrighted works in an intangible form, the prohibition shall not apply.

Also, some exceptions will apply, e.g. when traders are bound by an agreement with their supplier requiring them to restrict their passive sales to a specific territory.

  1. Difference in payment conditions/means for reasons of nationality, place of residence or place of establishment will be prohibited;
  2. Unlike price discrimination, price differentiation will not be prohibited: different general conditions, including prices, are allowed when targeting certain groups of customers in specific territories;
  3. Traders will not be obliged to deliver goods to customers outside the member state to which they offer delivery.
  4. The mere fact that a seller/service provider does not block/discriminate access to his services, shall not mean that he directs his activities to the territory where the customer is established and therefore shall not mean that he is subject to the jurisdiction of that country’s courts or that the laws of that country apply to the agreement with the customer.

The proposal will serve as basis for discussion with the European Parliament.

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