Geoblocking Regulation: What online retailers must now pay attention to

Geoblocking Regulation: What online retailers must now pay attention to
parcelLab
parcelLab
Fri, 01/04/2019
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One shock after another. Only recently the new packaging law was passed, which comes into force on 01 January 2019, and already a new law is waiting in the wings. For some, it comes just at Christmas time as called (consumers), but for others it is a real curse (online retailers). The new geo-blocking regulation has been in effect since December 3. But what exactly does this mean for online retailers?

The time before the new geoblocking regulation

[tooltip title="Geoblocking" color="blue"]Geoblocking is the process of restricting an Internet user's access to a particular website or other content based on their nationality or location.[/tooltip]

Up until this point, it was usually the case that when shopping in foreign EU online stores, one was automatically directed to the national store version. This usually had the negative effect that the product was much more expensive there or even not available at all.

###Performance of the 100 largest German online stores

The new geoblocking regulation

The new regulation was approved by the European Parliament at the beginning of 2018 and is now effective from 03 December 2018. The Geoblocking Regulation is intended to enable EU citizens to shop online without barriers.

The aim of the regulation is to prevent customers from being discriminated against when shopping for goods across borders on the basis of their nationality, place of residence or place of establishment. Customers therefore now have the choice of whether or not to be redirected to the website of their country of origin. Online retailers are obliged to offer goods and services to consumers from the EU at the same prices and conditions. This is intended to ensure the unrestricted movement of goods and services.

This of course pleases the Germans very much, because according to a idealo survey, 71 percent have already deliberately ordered abroad. Reasons for this is a different assortment, which they would possibly not receive in Germany at all. 69 percent of Germans are attracted by lower prices in foreign online stores, and for 18 percent of respondents, earlier availability is the decisive factor for placing an order.

Image Reasons for ordering abroad. (Source: idealo)

The most important facts

  • Access: It is now no longer possible to discriminate against users on the basis of their nationality or place of residence. Online retailers are no longer allowed to restrict access to their web store for this reason or redirect foreign customers to a country-specific website without obtaining their explicit consent
  • .
  • Prices: Level playing field means level prices. The prices set by the online merchant apply to both domestic and foreign shoppers
  • .
  • Payment methods: online merchants are free to choose which payment methods they want to offer their customers. However, what is new now is that they must offer at least one free payment method. In addition, with the new regulation is now also no longer the constraint that must be paid with a credit card or an account from a certain country. The customers are completely free here.
  • Terms and Conditions: Here again - the same terms and conditions for all. It is irrelevant from which EU country the customer comes. The terms of sale and contract must be the same for all customers.

Take delivery into your own hands

Online retailers are no longer allowed to refuse to sell goods even if they see no way to have the goods delivered across the border. However, they are still not obliged to deliver goods to other EU countries. This is where the customer comes into play. From now on, the customer can pick up his order directly from the online retailer on site or take the delivery process into his own hands. It is still up to the online retailer to determine which EU countries he wants to deliver to. However, many retailers are already well advanced in this respect. Around half of German online stores also deliver to other European countries.

Exceptions prove the rule

As with all rules or laws, there are of course areas and product groups that are exempt from the geoblocking regulation.

[tooltip title="Exceptions to the Geoblocking Regulation" color="purple"]Financial services, health services, audiovisual services, temporary employment, telecommunications, social services, gambling and security services are exempt from the Geoblocking Regulation.[/tooltip]

Conclusion

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Some are happy about the new geoblocking regulation, others it brings some problems. Especially at Christmas time, the limits of Europe-wide gift shopping are now abolished. Whether online shopping will now change in the near future remains to be seen. Will prices in general be increased? Will this really boost Europe-wide trade? According to the EU Commission, it will be possible to observe the concrete effects of the regulation over the next two years. Then, if necessary, adjustments will have to be made.

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