Initial findings from the EU Commission’s e-commerce sector inquiry show that geo-blocking is widespread. Companies preventing consumers from shopping online across EU borders is set to change. But is this good or bad news for eCommerce?
The UK Government has responded to the EU public consultation, strongly welcoming the initiatives to tackle the differential treatment of customers based on their nationality or geographical location, as set out in the Commission’s Digital Single Market package in May and in their Single Market strategy published in October.
The European Commission set out the case that deepening the Single Market is key to making the EU more competitive and to ensuring that it works to the benefit of consumers and small businesses in all 28 Member States.
The recent examples of Disneyland Paris and international car rental companies charging consumers higher prices apparently solely based on their location/nationality shot the issues of geo-location onto the centre stage. But, how will this effect small eCommerce sites who use geo-blocking in order to filter traffic populations or create local communities?
Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, commented: “Discrimination between EU consumers based on the objective to segment markets along national borders has no place in the Single Market.”
The Commission is proposing legislation to ensure that consumers seeking to buy products and services in another EU country, be it online or in person, are not discriminated against in terms of access to prices, sales or payment conditions, unless this is objectively justified for reasons such as VAT or certain public interest legal provisions.
With many small business owners having limited access to funds this could be seen as yet another cost and another worry in a legal minefield they have to abide by. Introducing compulsory transparency requirements for businesses that require them to explain (upfront or on request) why they charge a different price or do not deliver to a certain market will be an unnecessary burden, in particular to SMEs.
The Governments response to the EU public consultation also states “We should not look at imposing an obligation on businesses (in particular SMEs) to ship to any location in the EU – just as we would not want to force a UK business to sell across the whole of the UK, we believe that European businesses should not be forced to sell across the whole of the EU”.
The EU Commission have outlined they will be looking into developing a Market Information Tool enabling them to collect information from selected market players.
It’s also not surprising that the big telecommunications companies are resisting the conclusion of what it is presented as a net neutrality measure. Scientific publishing houses are against an educational- and science-friendly copyright law and that copyright holders of big sports events are against the removal of geo-blocking. Lobbying not only affects the decisions in the European Parliament, but also especially the decision-making in the Council, where national governments usually stand up for the interests of their local businesses.
The Commission’s strategy paper is neither the final vision of a future Digital Internal Market nor will it result in this outcome over the next few months. The cogs of decision-making seem to be working very slowly and it’s believed it’ll also have a difficult time keeping up with technological developments.