EU moves to allow consumers to buy online from cheapest website no matter where they live

Written by Jenni Davidson on 23 November 2017 in News

UK consumers will benefit from the move to ban online blocking based on a buyer's location until the UK leaves the EU

European flags - Image credit: Christian Lutz/AP/Press Association Images

European consumers will have more options to buy online from the cheapest supplier no matter where they live, after the European Commission, European Parliament and the European Council agreed to end unjustified blocking based on a customer’s location.

The new rules will open up more choice to consumers across the EU – and those in UK from when the new regulations come in to force until Britain leaves the bloc.

Geoblocking is where companies either limit purchases to their own country or block consumers from certain other countries from buying products and services through their website.

A European Commission survey using mystery shoppers found that less than 37 per cent of websites allowed cross-border customers to make a purchase, with geoblocking in place in 63 per cent of all websites it assessed.

Some blockings occurred when the mystery shopper tried to access the site or register, others when they tried to pay or when they tried to arrange delivery.

In some cases shoppers were automatically rerouted to another website, blocked from ordering or offered different products based on location on accessing the site, most frequently when trying to book flights or car hire.

For physical goods, geoblocking was highest for electrical appliances such as microwaves, taking place in 86 per cent of cases, and lowest for books, where it was 60 per cent.

For services, geoblocking was highest for online reservations of leisure events, such as sports event tickets, happening in 40 per cent of cases, and lowest for travel services such as hotel bookings, where the figure was 33 per cent.

The new rules define three specific situations where no justification for different treatment of customers from another EU member state are possible.

These are the sale of goods without physical delivery, such as if a customer orders a product and collects it or organises delivery themselves; the sale of electronic services, for example, web hosting; and the sale of services in a specific physical location, for example, holiday accommodation in France.

The new regulation does not impose an obligation to sell and does not harmonise prices, but it addresses discrimination where there is no justification, such as different VAT rates or legal requirements.

The EU says this means consumers will be able to buy electrical goods online, rent a car or get concert tickets across borders as they do at home, and for businesses, it will mean more legal certainty to operate cross-border.

Vice-President Andrus Ansip, responsible for the Digital Single Market, said: “Today we put an end to unjustified discrimination when shopping online. This is excellent news for consumers.

“With the new rules, Europeans will be able to choose from which website they wish to buy, without being blocked or re-routed. This will be a reality by Christmas next year."

Commissioner Elżbieta Bieńkowska, in charge of Internal Market, Industry, Entrepreneurship and SMEs, added: "We are upgrading the EU Single Market to the digital world by giving consumers the same possibility to access the widest range of offers regardless of whether they physically enter a shop in another country or whether they shop online.”

The new rules will not come into force for another nine months, so will only apply to UK consumers temporarily while the UK remains a member of the EU, but they will continue to affect UK businesses that have a European arm based in an EU country after Brexit.

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