What is Geoblocking and how is it going to affect retailers?

Geoblocking is when companies block or limit access to their websites, or have different general conditions of sale (for goods/services), depending on which EU member state a customer is located in. The EU considers that geo-blocking prevents unhindered cross-border trade across the EU.

 

The European Commission's Digital Single Market Strategy (which will still apply after Brexit and up to, at least, the end of the transition period) included legislation to prevent companies from geo-blocking.

 

  • These new regulations do not require companies to deliver goods to all member states - merely those in which they already have a presence or history of delivery. And, companies can still limit goods/service sold - or apply different conditions - for reasons that aren’t location-related.

  • Automatic redirection to a local version of a website is prohibited; customers must be given a choice, prior to redirection. They must also be free to change their minds.

  • Although the regulations do not require price matching across the EU, they do require companies to publish the prices charged in other member states. Furthermore, payment conditions cannot be different because of a customer's nationality, residence or place of establishment.

  • There are some exclusions from these regulations: audio visual services (covered by other proposals e.g. films, television programmes and sports broadcasts); financial services, healthcare services, social services, gambling and transport services (excluded from the Services in the Internal Market Directive 2006); and some traders that are exempt from VAT.


 

What should you do now?

 

The new regulations come into force on 3rd December. To prepare for this you should:

  • Check your website. Make sure it complies.

  • Review accepted payment methods and conditions. Make sure they are available to all customers.

  • Consider pricing. Customers will be able to see what you charge in other member states.

  • Make sure you comply with all the local VAT rules.

  • Consider your physical presence. Whilst you may manufacture in country X, if you have a logistics hub in country Y, this will result in your being expected to deliver there.

 

For more information about this and any other related matters, please contact us today.