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08/12/2016

Commission to propose in May ending geo-blocking for online sales

Digital

Commission to propose in May ending geo-blocking for online sales

Commission Vice President Andrus Ansip

[European Commission]

The European Commission is trying to dispel fears that its upcoming regulation of online businesses will step on companies’ toes.

After a meeting of the Competitiveness Council in Amsterdam today (28 January), Commission Vice President Andrus Ansip vowed to stop e-commerce businesses from geo-blocking customers, or keeping them from shopping online at local prices by rerouting them to different websites.

“People like me, they hate geo-blocking,” Ansip said, echoing similar statements on geo-blocking last year.

“We would like to propose legislation to sell like at home to our European businesses,” he added.

While a physical store might let its customers bring something they purchased to another EU country, “in digital, they say ‘it’s the basis of our business model’” to use geo-blocking, Ansip said.

The Commission is to propose a set of new ecommerce laws in May that will regulate how online businesses use geo-blocking to sell to consumers in other EU countries. Laws on VAT and parcel shipping are expected to be announced at the same time.

A few hours before Ansip promised to get rid of geo-blocking in a press conference broadcasted from Amsterdam, another Commission official quietly tried to reassure businesses in Brussels that the executive will not “disrupt” ecommerce companies.

“I noticed a lot of people are really nervous about what the Commission will do on geo-blocking,” Gerard de Graaf, director of the digital economy unit at DG CONNECT, told an e-commerce conference.

>>Read: Commission tries to boost cross-border e-commerce with online dispute resolution

Geo-blocking, which also describes the restriction of digital works or services in certain countries for licensing reasons, sparked concern last year in the lead up to the Commission’s new copyright proposals. The Commission will introduce another copyright law in June.

“This is not about copyright,” de Graaf said.

De Graaf insisted that the Commission is not trying to force businesses to charge the same prices as competitors in the EU, or to offer shipping to other EU countries if they do not already.

Legal restrictions on what can be sold online vary between member states and are not set to change either.

“You could geo-block if there’s somebody from Belgium trying to buy snuff from a Swedish website. And of course in some member states online gambling is not allowed,” de Graaf said.

Marlene ten Ham, secretary general of industry association Ecommerce Europe, said the new rules should not “lead to an obligation for online retailers to sell everywhere in the European Union.”

De Graaf warned that member states have not warmed to the plans to end geo-blocking. “Member states don’t like maximum harmonisation because it limits their own flexibility,” he said.

“But this is a debate we have to have. If we want a digital single market the consequence is more legislation in this area.”

The Commission released results from its public consultation on geoblocking yesterday (27 January).

E-commerce businesses are concerned the Commission will impose so-called ‘duty of care’ limitations that would require them to assume liability for illegal content on their websites.

But de Graaf hinted that might not come up in the e-commerce package expected for May.

“It’s a different, platform-type discussion,” he said.

The Commission also published results from its public consultation on online platforms yesterday, which sparked concern that the executive could introduce new regulation on apps and other online businesses.

>>Read: MEPs green light new online payment rules