New Regulation on Geo-blocking

Authors: Jessica Tressfeldt and Elisabeth Vestin

1. Why and when will the new rules apply?

As we wrote on the blog in December 2017, the 3^rd of December 2018 the new regulation on geo-blocking will enter into force. However, in December the regulation had not yet been accepted and some adjustments has been made since then. This post presents some of the new rules that will apply from the 3^rd of December.

The new rules aims to prevent unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment. This is already forbidden through a general rule in directive 2006/123/EG. However, it has been considered that the general rule shall be clarified in a new regulation.

The new legislation will be complemented by a new Swedish law regulating the fines and other administrative measures. The Swedish law is yet to be finalised but the legislation is suggested to enter into force the 1^st of March 2019.

2. What does the new rules mean?

2.1 Prohibition on limiting or block access to online interfaces

The regulation forbids a trader to block or limit costumer’s access to an online interface, such as websites or apps, based on their nationality, place of residence or place of establishment. Furthermore, the trader may only redirect a costumer from one page (i.e. to a page with another language) to another if (i) the customer has provided explicit consent and  (ii) the online interface the customer initially sought shall remain easy accessible to the customer.

2.2 Prohibition on limiting access to goods or services

A trader is prohibited to apply different general terms and conditions based on customers’ nationality, place of residence or place of establishment. The prohibition may be divided in to three main categories.

Purchase of goods

Where a costumer seeks to buy goods from a trader and such goods are delivered to a location which the trader offers delivery in the general terms and conditions the customer may not be discriminated based on its nationality, place of residence or place of establishment. The purpose of this prohibition is that the same general terms and conditions shall apply regardless of a customer’s nationality, place of residence or place of establishment.

As this rule implies that the same terms and conditions shall apply, the costumer have to pick up the goods in the member state in which the trader offers delivery or arrange by its own private mean arrange the cross-border delivery.

Receive electronic supplied services

Where a costumer seeks to purchase a non- electronic supplied service in a physical location within the territory where the trader operates the trader is also prohibited to apply different general terms and conditions. This category of services do not require any physical delivery and aims at services such as hotel accommodation, car rental and tickets to music festivals.

Receive non -electronic supplied services

Where a costumer seeks to purchase a non- electronic supplied service in a physical location within the territory where the trader operates the trader is also prohibited to apply different general terms and conditions. This category of services do not require any physical delivery and aims at services such as hotel accommodation, car rental and tickets to music festivals.

2.3  Non-discrimination for reasons related to payment

As a main rule, traders are free to decide which means of payment it wants to accept. The regulation clarifies that when the trader has decided what means of payment it shall accept, discrimination on the basis of means of payment may not occur. Traders are for example free to decide that payment may be made using a card-based payment of a specific brand or category (e.g debit). The regulation does not stipulate that traders are obliged to accept payment made using a card by the same brand but within a different category (e.g credit). Traders are likewise not obligated to accept payment if it requires that a new or amended agreement needs to be entered into with a payment initiation service provider.

2.4 Administrative fines

The Swedish law is yet to be finally settled but will lay down the rules setting out the national measures if a trader does not comply with the regulation. The bill suggests that a traders which do not comply with the requirements may be subject to administrative fines up to 5 million SEK in Sweden, though at most 10% of its annual sales.

3. Suggested measures

Even if the new regulation does not imply any essential differences as to how a trader shall provide its goods or services, every trader that is affected by the regulation is recommended to review its general terms and conditions. Traders are also recommended to review order flows etc. on their webpages or apps in order to guarantee non-discrimination of foreign customers.