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19 December 2018 / news

Life Sciences Bit: Are you compliant with the new EU Geo-blocking Regulation?

The EU Geo-blocking Regulation applies since 3 December 2018.

It impacts many businesses that sell their goods and services online or offline across the EU, including companies offering food supplements or (over-the-counter) medicines, who now need to make sure they comply with these new rules.

Geo-blocking practices

Geo-blocking is a term describing practices which are used by sellers to limit or deny access to (online) cross-border purchases based on nationality, residence or place of establishment. Examples include the denial of access to websites in other Member States, preventing customers from finalising their purchase, or restricting payment with a debit or credit card from a different Member State. Such practices are now prohibited under the EU Geo-Blocking Regulation which aims at realising the full potential of the internal market.

Scope of the Regulation

The Regulation applies to all traders (natural or legal persons) selling their goods or services cross-border (online or offline) in the EU, whether or not they are established in the EU. Purely internal situations, where all the elements of the transaction are limited to one Member State, are excluded.

The Regulation applies both to transactions with consumers (“B2C”) and businesses (“B2B”), insofar as those businesses are buying goods or services as “end-users” (i.e. not for re-sale).

Certain goods and services are however excluded from the scope of the Regulation, including the sale of healthcare services.

How to ensure compliance?

Traders selling their goods or services cross-border have to make sure that they do not discriminate customers based on their nationality, place of residence, or establishment. Particular attention should therefore be paid to:

  • Terms and conditions
    Existing terms and conditions should be reviewed in order to identify and remove any measures which limit or block customers’ access to online systems. A French customer must be able to buy a nose spray or OTC pain killer on a German website under the same conditions as customers living in Germany.

  • Means of payment
    Traders are free to choose the means of payment they accept. However, these means cannot be discriminatory and must be the same for all customers in the EU. For instance, a customer from Belgium who orders food supplements on a Dutch website must have access to the same payment methods and conditions as customers in The Netherlands.

  • Distribution policies, logistics and delivery arrangements
    Traders have to make sure that their distribution and delivery arrangements do not discriminate. This does not mean that they are obliged to set up new delivery points, but just that the same terms and conditions of delivery apply to customers from other Member States who decide to use such services.

  • Country-specific websites and re-direction of customers
    The European Commission published and already once updated a Q&A document on the Geo-blocking Regulation intended for traders and consumers. Without being legally binding, the aim of the document is to provide practical guidance on the main provisions of the Regulation.

What happens in case of infringements?

Member States are responsible for the enforcement of the Regulation. To this end, they must designate one or more bodies responsible for adequate and effective enforcement and for providing assistance to consumers in case of a dispute. Member States also have to determine measures applicable in case of breaches of the Regulation. These measures have to be effective, proportionate and dissuasive. They need to communicate the measures to the European Commission which will publish them on its website.

Review of the Regulation

The Regulation does not oblige traders to translate their website in all EU languages or to cease the use of country-specific websites. However, for example, when a trader wants to re-direct a Dutch customer to the Dutch version of its web shop, while the customer initially wanted to access the Belgian web shop, purely for reasons related to the fact that the customer is Dutch, .such re-direction can in principle only occur with the customer’s explicit consent.

By 23 March 2020 (and afterwards, every 5 years) the European Commission is moreover required to provide an evaluation report of the Regulation, which may lead to a review of the Regulation.

Should you have queries, please contact Alice Boulvain, Stephanie De Smedt, Aleksandra Sanak or your trusted Loyens & Loeff adviser. 

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