Restricting cross-border e-commerce is banned
From 3 December 2018, the new Geo-blocking Regulation bans geo-blocking ‒ territorial restrictions on cross-border e-commerce that have occurred in certain areas.
Online traders operating in the European Union will not be allowed to discriminate between customers in their own Member State and customers in any other Member State.
The Geo-blocking Regulation enables access by everyone in the European Union to electronically supplied services such as data warehousing, cloud and hotel accommodation or even car rentals under the same conditions and prices. Additionally, even selling tickets at different discounts or higher prices to customers in other Member States will be banned. Foreign webpages cannot apply additional costs just because the customer is Hungarian or only has a credit card issued in Hungary. From December, EU citizens can shop freely at any web shop in the European Union, even if they do not ship to the shopper’s country of residence. For example if furniture is cheaper in an Italian web shop, a shopper in another Member State can buy the same furniture under the same conditions as apply to Italian customers. Although the Italian web shop need not deliver the item to the shopper’s home state, the shop must ensure that the shopper can pick up the item in Italy or in any other country that the web shop ships to; alternatively, the shopper can arrange and pay for shipping to their home state. Also, traders will not be allowed to apply different payment conditions or different credit card requirements against customers in other Member States. Foreign websites will not be allowed to block or limit customer access based on their IP address or redirect them without prior consent to another website, even if it is set up especially for foreign customers.
The ban does not apply to copyright-protected content, such as e-books and music streaming services. Also excluded are financial, healthcare and social services. In 2020 evaluation of the Regulation is expected to lead to extending the geo-blocking ban to other services.
The Hungarian legislator and the traders affected still have plenty to do by December, especially as the controlling authority ensuring compliance with the Regulation has not yet been appointed in Hungary and sanctions have not yet been set.
In any case, online traders engaged in cross-border e-commerce should reconcile the operation of their web shops as soon as possible with the new Regulation applicable in every Member State.
Source: Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC