European Parliament : Report - Addressing geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment within the internal market - A8-0172/2017 - Committee on the Internal Market and Consumer Protection

I. Introduction

As part of its eCommerce package, the Commission presented on 25 May 2016 a proposal for a regulation on addressing geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment. The purpose of the regulation is to ensure that customers have the same access to goods and services as local customers. The Regulation builds upon the provisions of the Services Directive (Art 20), which already establishes the principle for non-discrimination, but has proven difficult to enforce in practice due to legal uncertainty concerning what practices would - and would not be - considered justified.

The regulation seeks to provide more legal certainty and enforceability by defining specific situations when there can be no justified reason for discrimination on the grounds of nationality or residence. In addition, the proposed regulation bans the blocking of access to websites and the use of automatic re-routing without the customer's prior consent. The proposed regulation also includes provisions of non-discrimination within accepted payment means.

The Regulation is part of the overall strategy to stimulate cross-border e-commerce, a key driver for growth, by ensuring better access to goods and services, by building trust and providing greater certainty and by reducing administrative burden.

II. Position of the Rapporteur

The Rapporteur shares the overall objective of the Commission's proposal, namely to realise the full potential of the internal marketas an area without internal frontiers in which the free movement of goods and services is ensured. The internal market is far from a reality. eCommerce is a key driver for growth, with annual growth rates in the EU averaging over 13%. However, only 15% of consumers bought online from another EU country and 8% of traders sold cross-border (as compared to 24% domestically). Traders and consumers face continued barriers. In the online environment, such barriers become immediately apparent - for consumers, for instance, it is incomprehensible why they should be prevented from accessing certain websites, why they should not be able to buy certain goods in other Member States or why they should be paying a different price based on their nationality or their residence alone.

At the same time, there are clearly justified reasons for such differential treatment by traders. One such reason could be for instance the fact that the trader does not have the required intellectual property rights in a particular territory. Or traders may consider applying different conditions of access due to for instance the additional costs incurred because of the distance involved or the technical characteristics of the provision of the service or the different market conditions.

The Commission proposal is a welcome step in the right direction. It provides more clarity by defining specific situations where it can never be considered justified to discriminate on the grounds of nationality or residence. It also brings welcome clarity of the type of actions that would be considered inacceptable - such as banning the blocking of access and the non-discrimination provisions within accepted payment means. However, the Commission proposal leaves important elements unanswered.

1. Legal certainty for consumers and traders

The Rapporteur is of the view that one of the reasons why traders may be hesitant to engage in commercial relations with consumers from other Member States is the legal uncertainty and the associated risks as regards the applicable consumer protection, environmental or labelling laws. This is not addressed in the Commission proposal, which leaves considerable uncertainty for traders and consumers alike.

To address this, the Rapporteur proposes a new Article 8a on applicable law and jurisdiction. The Article sets out to clarify that in those cases where a trader clearly sets out his intention to sell to consumers from one or more Member States and a consumer from another Member State wants to conclude a contract with this trader under the rights granted by Article 4 of this Regulation, then the trader will treat the consumer in the same way as he treats local consumers. In other words, the trader would be able to apply the consumer protection, environmental, labelling or product safety requirements of his Member State. Likewise, the responsible court should be that of the trader's Member State.

2. Scope

In the interest of proportionality, the rapporteur proposes to limit the scope of the regulation to consumers only, with one important exception, namely in case of dual purpose contracts with a limited trade focus, that person should also be considered as a consumer.

The Rapporteur can accept that at this stage the scope of the regulation is aligned with that of the Services Directiveto the extent possible in order to ensure consistency, in other words non-economic services of general interest, transport services, audio-visual services, gambling, healthcare and certain other services are excluded from the scope of the Regulation. However, the Rapporteur believes that it is necessary to evaluate this in the context of the first review of the regulation.

However, the Rapporteur disagrees with the Commission on the question of how to treat electronically supplied services for the provision of access to and use of copyright-protected works or other protected subject-matter. The Rapporteur believes that there are numerous incidents of discrimination in relation to electronically supplied services such as e-books, e-music, games or software. She therefore proposes to include them within the scope of Article 4, provided that the trader has the requisite rights for the relevant territories.

3. Additional clarifications

In addition, the Rapporteur proposes a number of clarifications to the draft text of the Commission. This include in particular:

• A clarification that the non-discrimination prohibition covers not only nationality and place of residence but also temporary location

• A clarification that purely internal situationswithout a cross-border component are excluded (Art 1a)

• A simplification as regards Art 3 access to online interfaces: the Rapporteur considers the explicit consentprovision suggested by the Commission as too burdensome both for business and consumers and considers it sufficient to impose an information obligation concerning redirection as well as full access to the original interface. The Rapporteur clarifies that the explanations are to be given in the language of the online interface. The rapporteur also considers that the access to online interfaces shouldn't be limited not only by traders but also by online marketplaces.

• A clarification in Art 4 that traders can still apply different general conditions of access between Member States or within a Member Stateoffered to consumers on a specific territory or a specific group of consumers, as long as these are not defined on the basis of nationality, residence or temporary location. In other words, a trader would still be able to offer different prices in different web portals, as long as a consumer approaching a given web shop from another Member State is able to buy the product under the same conditions as a local consumer.

• A clarification in Art 5 on payment methods to avoid increased risks of fraud linked to certain payment methodsby clarifying that the trader has the right to withhold a good or service until he has received confirmation that the payment transaction has been properly initiated.