The requirements of the Geoblocking Ordinance must be implemented from 3 December 2018. It is therefore important to take and implement the necessary measures in advance.What do online retailers have to do now?
- Removing technical access barriers for foreign customers
- Disable automatic routing
- Either customise the checkout process or the terms & conditions
- Customise contact form & checkout so customers can provide foreign contact information
- Check possible tax implications
In order to meet the requirements of the Geoblocking Ordinance, online retailers should start taking and implementing the necessary measures promptly. The legal implementation of the Geoblocking Ordinance can either be implemented in the checkout process or regulated by the General Terms and Conditions.
Note for Händlerbund members
Händlerbund members do not have to adapt the general terms and conditions, since the geoblocking requirements are already part of the current legal texts. We would be pleased to advise you on the implementation of the Geoblocking Ordinance.
If you are not yet a member of Händlerbund, we recommend you become one: take advantage of the full range of services of Händlerbund including the provision of warning-safe general terms and conditions as well as all other legal texts such as payment and shipping conditions.Become a member now!
1. General Information on the Geoblocking Ordinance
The EU has banned geoblocking in online trading. The term geoblocking describes the technology that can be used on the Internet to limit content on the website or online shop regionally.
The Ordinance entered into force in all EU Member States on 23 March 2018, but will not be applied until 3 December 2018 to allow time for adaptation, especially for smaller online retailers.
The EU Council speaks of geoblocking as a form of discrimination. Online customers are prevented from purchasing services or goods from websites located in another country. In the past, not only was content blocked when users from other countries wanted to access it, but there were also disadvantages in terms of price, sales and payment terms. For example, an Italian online customer on a French website had to pay a higher ticket price for an amusement park when booking online than a French user.
2. Objective of the Ordinance
The Ordinance (EU) 2018/302 and the prohibition of geoblocking prevent disadvantages and discrimination in online purchases. Nationality, place of residence or place of establishment within the Internal Market no longer affect online trade.
In order to achieve this goal, the Ordinance has established various obligations for online retailers and website operators.
3. Obligations for Online Retailers
a) Equal Access
Under the new EU Ordinance, online retailers and website operators are no longer allowed to treat customers differently in terms of general terms and conditions, including prices. This applies in the following situations:
- Where the retailer offers goods which are either delivered to a Member State because the retailer offers the delivery there or are collected at a place agreed with the customer
- When the retailer offers and provides electronic services. These include cloud services, data warehousing, web hosting and the provision of firewalls.
- When the retailer provides services that the customer receives in the country where the retailer operates, such as hotel accommodation or car rentals
If goods cannot be delivered to certain Member States, online retailers may not refuse to sell products to foreign customers.
This means that if a Dutch customer finds a cheap product with a Leipzig online retailer who does not offer cross-border shipping, the customer must organise delivery independently. The retailer is only obliged to deliver to the Member States listed in his general terms and conditions.
No discrimination is allowed in the case of electronic services such as hosting of websites, nor in the case of services offered at a particular location. No different prices may be demanded from customers from different EU states. These include, for example, concerts or admission to amusement parks.
b) Payment Transactions
The Geoblocking Ordinance prohibits unjustified unequal treatment of customers with regard to payment methods on the basis of nationality, place of residence or place of establishment. It is not permitted to apply different payment terms for the reasons stated above.
c) Non-discriminatory Access to Websites
Website operators or online retailers are not permitted to restrict or block customers' access to their own website on the basis of nationality, place of residence or place of establishment.
In addition, it is forbidden since the regulation to automatically forward customers to country-specific websites on the basis of their IP address. For example, it is no longer permitted for an Italian customer who wants to buy something on a German website to be automatically redirected to the Italian version of the shop. So if the user e.g. enters www.testdomain.de, he may not be automatically redirected to www.testdomain.it.
The customer must be directed to the page they have entered. Then they must be able to decide for themselves whether he wants to continue surfing on the German website or whether he prefers to switch to the Italian website.
d) Passive Sales Transactions
The aim of the EU is not to oblige retailers through the Ordinance to engage in targeted trade to other Member States. There is also no obligation for retailers to offer multilingual websites and thus take into account all European legal systems. The aim is rather to remove restrictions on passive sales. Passive sales are sales as reactions to orders which the supplier has not actively sought, i.e. does not specifically address customers.
What the European Commission will address are services related to copyrighted content or works that are not in physical form. These include music streaming services and e-books. These are not yet covered by the Ordinance.
Services in areas such as finance, transport, audiovisual, health and social affairs are also excluded.
Moreover, suppliers remain free to offer different general terms and conditions, including prices, and to target specific customer groups, since price differentiation is not prohibited, as opposed to price discrimination.
5. Our Recommendation for Online Retailers
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There is no need for action!