3 December This year will become effective Regulation (EU) 2018/302 of 28 February 2018 on unjustified geographical blocking and other forms of discrimination against customers on grounds of nationality, place of residence or place of business in the internal market and amending Regulation (EC) No Directive 2006/2004 and (EU) Directive 2017/2394 and Directive 2009/22.
one The fundamental freedoms from which we can enjoy membership of the European Union are the freedom of movement of goods and services. Unfortunately, the very abolition of national barriers between Member States has proved insufficient to achieve full freedom of movement for goods and services. Vendors often introduce obstacles contrary to the principles of freedom of the internal market.
An example of this is the introduction by online vendors without objective justification of blockages or restrictions on access to Internet interfaces, to customers from other Member States wishing to enter into cross-border transactions. This is a practice known as "geographical blocking" or "geoblock".
In order to develop the free movement of goods and services, the European Commission presented 2015 detailed plans for the creation of a digital single market, including three Pillars: (1) better access to digital goods and services across Europe (2) creating the right conditions and uniform operating rules for digital networks and innovative services (3) maximising the growth potential of the digital economy.
A regulation prohibiting geolocks is an expression of the achievement of the Digital Single Market. In a large simplification, it can be pointed out that the Regulation requires online retailers to adapt their interfaces accordingly so that foreign customers can order on the same terms as local customers.
Instructions – practical explanations to the European Commission
The regulation is short and substantive – contains 11 articles. For his better understanding, the European Commission recently issued 45-a partial instruction. The instruction was prepared in the form of questions, answers and practical examples explaining the substance of the changes introduced by the Regulation. The instructions are addressed primarily to sellers who try to adapt to commercial practices in accordance with the Regulation, but also to customers of these sellers.
The instructions specify, among other things, the obligations to be fulfilled by Internet vendors in order to adapt online shop interfaces to new regulations.
First of all, retailers should bear in mind that the customer has the right to access all versions and items published on the seller's website (unless he prohibits this special provision). The Regulation does not require sellers to create websites or parts of them in different languages.
Nor does the Regulation require the adaptation of Internet interfaces to all formats and coordinates in force throughout the Union. However, interfaces will not be designed in a way that in practice will not allow customers from other Member States to easily order.
Vendors will continue to be able to redirect customers to a specific version of their website, but the customer will have to agree. The customer will have the right to withdraw his consent at any time, and the version of the website he originally wanted access to will have to remain easily accessible.
What the Regulation means for consumers
So from 3 December 2018 any customer will be able to shop in any online store operating in the EU on the same commercial terms (including price terms) as the customer from the country to which the store directs its offer.
The Regulation covers the purchase of goods delivered to the Member State to which the sellers offer the supply; services supplied electronically (e.g. cloud services, data wholesale services and web hosting); and services which customers use in the country of business of the seller (e.g. hotel services or car rental).
How the Regulation will have a real impact on the daily lives of the people of the Member States, we will probably find out only after some time. For example, some foreign retailers fear that after the Regulation enters into force, customers from countries where products are more expensive will buy large quantities of these products in order to sell them in their country. The question also arises of how the Regulation will affect prices in countries where products and services are currently cheaper.
The European Commission itself stated that after the end two years after the entry into force of the Regulation, it will assess how the Regulation was implemented and contributed to the effective functioning of the internal market. In fact, only then will we know the real impact of the Regulation on online trade in the Member States.
Source: Forbes
Author: Andrzej Dmowski
Lawyer and Doctor of Legal Sciences of the University of Warsaw. From 2011 one from Managing Partners in Russell Bedford Poland. Previously on the BDO advisory network, as well as Deloitte & Touche. Author of the book “Transfer Prices”, co-author of the commentary “The Corporate Income Tax Act”, author of many publications on tax law.