The European Commission has presented its proposals for regulations to increase cross-border e-commerce in the EU, including restrictions on geoblocking in certain circumstances and increased consumer protections. Following a public consultation, the regulation's focus was narrowed to focus more on cross-border sales of physical goods, while digital products will be subject to a more gradual approach, with some provisions not taking effect until 2018 and certain sectors excluded.
The proposed regulation defines specific situations when there can be no justified reason for traders to prevent sales to residents of other EU countries. The aim is for customers from another EU state to have the same access to goods and services as local customers. Notably sellers will not be able to block visitors from other countries from their websites or automatically route them to a site for their own country without the user's consent. This also applies for non-audiovisual digital content, such as apps, games and e-books. Sellers also will be prohibited from discriminating on payment methods, if the payment is from another country but through the same electronic system used locally and also is in a currency they accept.
While the regulation does not impose an obligation on traders to sell or deliver to any country, customers from other EU states should be able to buy physical goods from the site under the same terms as locals and arrange for their own pick-up or delivery. Exceptions will still be possible if national or EU requirements block certain types of sales, such as a ban on selling alcohol to non-residents. Small companies falling under certain VAT thresholds will also be exempt from some of the provisions.
When buying electronic or online services, such as hosting or cloud storage, foreign customers also should have access to the same terms and prices as local customers. These types of service will benefit from a longer transition period for complying with the regulation, until July 2018. The Commission also agreed to exempt copyright-protected works, such as books and music, from the obligation to offer the same terms to consumers from other EU states. The EC said it will review the exception later for possible inclusion of the sector.
Audiovisual works, as well as financial and transport services, are excluded from all parts of the regulation. The Commission said it plans to make proposals in Q3 on copyright reform aimed at allowing subscribers to digital content services to access their services in any EU country.
To help enforce the new measures, the Commission also proposed an update of the Consumer Protection Cooperation Regulation to give more powers to national regulators. They will be able to check if websites geo-block consumers or offer after-sales conditions not respecting EU rules; order the immediate take-down of websites hosting scams; and request information from domain registrars and banks to detect the identity of the responsible trader.
The Commission is also publishing updated guidance to help clarify how the Unfair Commercial Practices Directive applies online. For instance, any online platform that qualifies as a "trader" and promotes or sells goods, services or digital content to consumers must make sure that its own commercial practices fully comply with EU consumer law. Search engines would be required to clearly distinguish paid placements from natural search results.
While high delivery costs are often cited by consumers as the biggest barrier to cross-border trade, the Commission has held off on intervening directly in the postal market. The Regulation will give national postal regulators data to monitor cross-border markets and check the affordability and cost-orientation of delivery prices. It will also encourage competition by requiring transparent and non-discriminatory third-party access to cross-border parcel delivery services and infrastructure. The Commission will publish prices of universal service providers to increase peer competition and tariff transparency and evaluate the progress again in 2019.
The regulation must still be approved by Parliament and the Council and then would take effect immediately. It would apply to sellers based in the EU as well as those outside the EU selling to consumers in EU countries.
