Regulation on addressing unjustified geo-blocking and other forms of discrimination

Internet traders have not yet managed to recover fully from the effects of GPDR on their activities and there already exists another regulation which may have a significant impact on technical solutions used in the operation of internet businesses. In March 2018, Regulation (EU) 2018/302 (‘Regulation’) was adopted, the purpose of which is to solve so-called unjustified geo-blocking. This aim is to be achieved by removing certain obstacles to the operation of the internal market and by prevention of discrimination based on nationality, place of residence or place of establishment in cross-border online transactions.

Paradoxically, the Regulation does not apply to the provision of multimedia content, where different (discriminatory) conditions in individual member states of the EU are most often applied by traders, including different prices for identical or similar services in individual countries. It is also noteworthy and in its Preamble, the Regulation realistically accepts this, that many differences in EU Member States' legislation still constitute significant barriers to cross-border trade. In the case of the Czech Republic, a language barrier poses a further obstacle to cross-border trade.

The Regulation will enter into effect on 3 December 2018 and it deals with three primary issues: access to (online) interface of an e-shop, prohibition of different terms of business for customers from various countries of the EU and prohibition of discrimination for reasons relating to payment for goods or services.

Access to online interfaces

The Regulation prohibits internet traders from blocking or limiting by technical means (or otherwise) a customer's access to the trader’s e-shop’s online interface for reasons related to the customer's nationality, place of residence or place of establishment. Redirection of a customer to a different language version of the e-shop is also prohibited for the same reasons, unless the customer has explicitly consented to such redirection in advance. Therefore, automatic redirection of a customer to a different language version of an e-shop without the customer’s consent will be prohibited. The Regulation also provides that even in the event of a customer’s redirection (to a different language version of an e-shop) with the customer’s explicit consent, the version of the trader's online interface to which the customer initially sought access will remain easily accessible to that customer. It is in particular compliance with this obligation that may mean that multi-language e-shops will have to change the technical arrangements of their user interface.

Access to goods or services

The Regulation further regulates prohibition of different terms of business for customers from different countries of the EU. In particular, it states that a trader shall not apply different general conditions of access to goods or services, for reasons related to a customer's nationality, place of residence or place of establishment. This means, for instance, that if a customer from Austria orders a delivery of goods to an address in the Czech Republic, a Czech trader may not apply to them conditions different to those applied to their Czech customers. The Regulation expressly states that mere compliance with this prohibition of discrimination by a trader should not mean that the trader aims their activity on Austrian customers. It is known that the question of which country a trader aims their activity on may be very important for considering in which country the trader can be sued, as well as for the choice of applicable law in the relationship between the customer and the trader. Ensuring equal access to goods and services will not mean in this case that the trader should comply with obligations prescribed by Austrian law, or that the trader has a duty to inform customers of these requirements.

Non-discrimination for reasons related to payment

The Regulation also lays down prohibition of discriminatory conditions relating to payment for goods or services. In particular, if the requirements specified in the Regulation are met, a trader may not, within the range of means of payment accepted by the trader, apply different economic conditions for individual customers for reasons “related to a customer's nationality, place of residence or place of establishment, the location of the payment account, the place of establishment of the payment service provider or the place of issue of the payment instrument within the Union”.

Josef Aujezdsky, partner

Masek, Koci, Aujezdsky, attorneys at law Opletalova 1535/4, 110 00 Prague 1, Czech Republic

This Article was originally published in Issue 5.6 of the CEE Legal Matters Magazine.

by Josef Aujezdský