If you operate within the European Union and still redirect consumers to certain parts of your site, or a completely different URL tailored with specific terms – based on their nationality, place of residence or where they’re established – you need to make sure that you’re complying with Regulation 2018/ 302/ EU (‘geo-blocking regulation’). This came into force at the end of 2018. The ruling was put in place to address unjustified geo-blocking, based on the above customer characteristics, and aims to enhance eCommerce opportunities within the EU. Below is a guide to help you abide by these regulations.
What is geo-blocking?
Geo-blocking is where merchants limit or block access to their website and/ or app to customers from a country different to the one they operate in. The purpose of this act is to combat geo-based discrimination towards consumers and put member state nationals and merchants on a level playing field.
What are the main terms of this new law and which verticals does it affect?
This regulatory change was compiled with the aim of ensuring that shoppers, across all EU member states, have alike access to products they wish to purchase. Every category of goods and services falls under these new laws.
Only businesses that are not fully and strictly regulated by country-specific mandatory legal requirements (e.g. gambling, healthcare, transport services, etc.) are exempt. The main points are:
• Customers must have the right to choose whether or not they wish to be redirected to the country page targeted at them.
• Merchants are not allowed to decline payments if it’s in an accepted currency and the payment method is available on their web payment page. This applies when – say – a Bulgarian payment card is used to purchase an item with a Romanian merchant and the card is declined only due to the fact that it was issued in Bulgaria.
• Merchants are free to continue setting different prices for different target markets.
However, every version of the website that has different prices shall be accessible to customers from all member states and merchants shall ensure that such foreign customers are treated the same way as nationals (including delivery terms).
I sell specific types of media. How does this affect me?
Media content that would be viewed as non-audio-visual, copyright-protected content services is excluded from this shop-like-a-local principle. This includes eBooks, online music, software and video games. These services could be added as part of the review which, will be carried out two years after the regulation was initially enforced.
I’m not yet compliant. What should I do?
If the way you reroute customers is not necessary under mandatory legal requirements, and the goods or services are not part of the exemptions mentioned above, you should check to make sure that your site is not restricting access based on the discussed parameters. While you can still set prices based on different target markets, you’ll be fine as long as all versions of your website allow shoppers to be treated the same way regardless of their nationality, residence or establishment. If customers want the lower price, they’ll have to obtain the goods from the country where this is offered (if there is no international delivery option in the same website version). Merchants that sell the specific media we mentioned in the previous section should keep an eye on any possible changes, so that they can adapt accordingly if needs be.
To summarise…
If you’re not yet compliant with these regulations, it isn’t yet too late to change that. There is still flexibility when it comes to pricing your products and services, but it’s a requirement to make them available to all EU shoppers. In short, as long as anyone in these member states can access and purchase your products, you’ll be well on the compliance route and also improve your business prospects.
We offer full support to merchants to ensure that they’re complying with regulatory requirements in markets they serve. To find out more, please contact us.