EU Regulation No. 302/2018, aka “geoblocking regulation”, came into force in all EU member states on 3 December 2018.
The regulation introduces specific provisions, adds to other EU laws that indirectly address geoblocking (for instance, provisions on “vertical restraints”) and aims to encourage the free circulation of goods and services in the EU’s internal market.
The geoblocking regulation is intended to put an end to any discrimination based on nationality, residence or place of establishment of clients in the entire EU.
In greater detail, the geoblocking regulation forbids professionals (all so-called “merchants”; meaning entrepreneurs and/or free-lance professionals offering goods and/or services on line and off), unless the client expressly consents, to adopt technological or other means aiming to block the client’s access to certain goods or services, or block access to web sites and applications, based on nationality, residence or place of establishment of the client.
The regulation likewise forbids professionals to redirect clients to other web sites or applications based on nationality, residence or place of establishment of the client.
Professionals will therefore be barred from applying discriminatory conditions (based on nationality, residence of place of establishment of the client) when a client intends to buy goods from the professional (providing that general terms of sale include delivery of the goods in the client’s member state).
In particular, a professional will be barred from applying discriminatory conditions if the client requests delivery of the goods purchased on the professional’s web site in a member state different from the one of the client’s nationality, residence of place of establishment, in which delivery is normally offered by the professional.
For instance, a professional operating in Italy through an e-commerce web site cannot refuse to deliver a product to Germany purchased by German nationals or residents only because of their nationality, residence or place of establishment.
Professionals will be barred from applying discriminatory conditions (based on nationality, residence or place of establishment of the client) where the client intends to receive certain services from the professional, and provided that the services do not concern copyrighted content; geoblocking will still be lawful for content protected under copyright laws at least until 2020!
Furthermore, professionals will be barred from applying discriminatory conditions based on nationality, residence or place of establishment of the client where the clients intends to receive services offered by the professional by means other than electronic (such as, for instance, installation and assistance services if the professional declares in the general terms of sale that they are offered in the whole territory of the EU).
The professional is always allowed to offered goods and services to clients in different member states at different conditions, providing that such conditions do not differ on a “discriminatory” basis. Professionals are allowed, for instance, to refuse delivery of goods in the territory of a member state if those goods cannot be legally sold in the territory of that state under the national laws of that state, and such a refusal can in no way be considered “discriminatory”.
The rules against discrimination based on geographical criteria extend also to payments: if the client intends to pay by one of the means of payment declared acceptable by the professional, the latter cannot apply different conditions based on nationality, residence or place of establishment of the client. Back to the example used above, the Italy-based professional operating through an e-commerce web site cannot refuse credit card payments from German clients only, in the absence of a specific non-discriminatory reason (such as, for instance, a specific provision of law applicable in Germany), if the professional has declared credit card payment acceptable in the web site’s general terms of sale.
Lastly, the regulation introduces provisions applicable to relations between enterprises. Under the new EU rules, clauses in distribution agreements requesting the distributor or the vendor to introduce discriminatory practices based on nationality, residence or place of establishment of the client will be considered null and void in the case of so-called passive sales, meaning sales that have not been requested or promoted by the distributor but rather answer orders from clients. Therefore, suppliers and distributors of products and services in the territory of the EU will have to pay special attention to the contents of existing agreements and avoid the introduction into any new agreements of clauses contrary to the provisions of the geoblocking regulation.
The new EU rules will pursue the specific aim of eliminating barriers and borders – especially digital ones – separating citizens of the different EU member states which prevent them from benefiting of the same conditions concerning offers and sales of certain goods and services in the whole territory of the EU.