In practice some operators of predominantly smaller e-shops prevented customers from abroad from accessing the online shop and purchasing goods in it. Their motivations for this approach vary and they may include, for example, a different legal environment, legal uncertainty caused by it, risks associated with different consumer protection rules, different laws concerning identification, taxation, delivery costs etc. Therefore, some e-shops logically decided not to deliver abroad and to eliminate in such a way a possible legal risk.In order to preserve and fully use the potential of the internal market without internal borders, the European Union (EU) decided to react to this practice by a new regulation, which perceives it as unjustified geo-blocking and seeks to prohibit this discrimination of customers. The Regulation of the European Parliament and the Council (EU) 2018/302 from 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (“Regulation”) applies from 3 December 2018.

WHAT IS GEO-BLOCKING?

Geo-blocking means the application of unjustified differences in the treatment of customers on the basis of distinguishing criteria such as customers' nationality, place of residence or place of establishment (direct discrimination) or on the basis of other distinguishing criteria such as the IP address used when accessing an online interface, the address submitted for the delivery of goods, the choice of language made or the Member State where the customer's payment instrument has been issued (indirect discrimination).

The Regulation prohibits geo-blocking in three areas:

(i) access to online interfaces;

(ii) access to goods or services; and

(iii) non-discrimination for reasons related to payment.

The prohibition of geo-blocking applies to consumers and undertakings when acting as customers (i.e. undertakings purchasing a good or a service for subsequent resale).

WHICH ACTIVITIES ARE PROHIBITED BY THE REGULATION?

    (i) Access to online interfaces

Pursuant to Article 3 of the Regulation, a trader shall not in any way block or limit a customer's access to the trader's online interface for reasons related to the customer's nationality, place of residence or place of establishment. At the same time, a trader shall not redirect a customer to a version of the trader's online interface that is different from the online interface to which the customer initially sought access, by virtue of its layout, use of language or other characteristics that make it specific to customers with a particular nationality, place of residence or place of establishment, unless the customer has explicitly consented to such redirection. The original trader's online interface shall remain easily accessible to that customer despite his or her consent.However, the aforementioned prohibitions do not apply where the blocking or limitation of access, or the redirection is necessary in order to ensure compliance with a legal requirement laid down in Union law, or in the laws of a Member State in accordance with Union law, to which the trader's activities are subject. In such instances, the trader shall provide a clear and specific explanation to customers regarding the reasons for the blocking or limitation of access, or the redirection in the language of the online interface that the customer initially sought to access.

    (ii) Access to goods or services

Pursuant to Article 4 of the Regulation,  a trader may not apply different general conditions of access to goods or services (i.e. any requirements or conditions including sale prices), for reasons related to a customer's nationality, place of residence or place of establishment, where the customer seeks to:

• buy goods from a trader and either those goods are delivered to a location in a Member State to which the trader offers delivery or those goods are collected at a location agreed upon between the trader and the customer in a Member State; or

• receive electronically supplied services from the trader (for example cloud services etc.), other than services the main feature of which is the provision of access to or use of copyright protected works or other protected subject matter, including their sale (for example music streaming services, online TV etc.); or

• receive services from a trader, other than electronically supplied services, in a physical location within the territory of a Member State where the trader operates.However, the Regulation does not prevent traders from applying general conditions of access, including different net sale prices, which are offered to customers on a non-discriminatory basis. As in the case of access to online interfaces, the prohibition of geo-blocking consisting of access to goods or services applies only if legitimate geo-blocking on the basis of the EU legislation or domestic law is not involved.

    (iii) Non-discrimination for reasons related to payment

Lastly, geo-blocking within the meaning of the Regulation (Article 5) includes the prohibition of the application of different conditions for a payment transaction by the payment service provider, the location of the payment account or the place of issue of the payment instrument, for reasons related to a customer's nationality, place of residence or place of establishment, where:

• the payment transaction is made through an electronic transaction by credit transfer, direct debit or a payment card; and

• authentication requirements are fulfilled pursuant to the directive on payment services; and

• the payment transactions are in a currency that the trader accepts.

RELATION TO OTHER LAWS

The Regulation does not affect agreements restricting active sales or passive sales within the meaning of Regulation (EU) No 330/2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices and concerning transactions and concerning transactions falling outside the scope of the prohibitions laid down in Articles 3 to 5 of the Regulation. At the same time, provisions of agreements restricting active or passive sales that are in conflict with Articles 3 to 5 of the Regulation are automatically void by virtue of the Regulation.