Retail outlet sales have dropped dramatically in recent years since the advent of online shopping has made it comfortable to buy almost everything one needs from home. That said, there are still some restrictions to online shopping included geo-blocking which according to the European Commission (EC) is when « online sellers apply barriers and impose restrictions to consumers on the basis of their nationality or place of residence ». An example would include a Spanish clothing brand charging higher prices to consumers who access their online catalogue from Germany.
The discriminatory practice does not echo the EU’s vision of a single market and has prompted the EC to publish Regulation (EU) 2018/302 (« the Geo-blocking Regulation« ) which will apply from 3 December 2018 – just in time for Christmas! The regulation does not cover every product or service though, and there are issues in relation to Brexit.
Indeed, copyrighted digital media such as e-books, video games and music are not included. These exemptions are a detriment to the EU Single Digital Market and the EC has committed to update its position on the exclusion of digital media products from the Geo-blocking Regulation by 2020.
Furthermore, the EC has recently issued a notice regarding the impact of Brexit on the Geo-blocking Regulation (« the Notice ») which suggests that: (i) UK customers will not benefit from the same non-discriminatory practices as EU customers when it comes to online purchases; but (ii) UK traders will still have to comply with the Geo-blocking Regulation when selling their goods and services to EU customers online.
On the one hand, the above scenario may not occur if the UK opts to transpose the Geo-blocking Regulation into UK law and the definition of ‘customer’ in this Regulation is amended to include UK citizens and residents. Such scenario would be made possible under the draft EU Withdrawal Bill. This will allow UK and EU citizens to benefit from the protections of the Geo-blocking Regulation, and EU traders selling into the UK will be prohibited from discriminating against UK customers when compared to EU customers. A win-win situation.
If, however, no deal is struck before exit date and the scenario remains as predicted in the Notice, then it may not necessarily be UK customers that will suffer the consequences. With the global popularity of many UK online retailers, it may turn out that in a post-Brexit environment that it is UK customers that are actually offered better protection from geo-blocking than EU customers.