European Consumers Decry ‘Geoblocking,’ Online Merchants Defend It
Feb. 4, 2016
In the wake of a recent report from European Parliament in support of the Digital Single Market Act, the European Commission (EC) released a preliminary report detailing consumer reaction to one facet of the effort to make cross-border online commerce in Europe easier. Geoblocking—the wholesale blocking of transactions that originate in certain countries—was criticized by Parliament and was roundly rejected by consumers in the new EC report.
The EC polled consumers and businesses in December on geoblocking proposals and found 90 percent of consumers supported the idea that, within the EU, e-commerce merchants should not be able to block entire countries. Eighty percent of those polled said they had experienced geoblocking.
Ecommerce Europe, a Brussels-based trade group representing e-commerce businesses, said it would be wrong to force merchants to sell where they did not want to, despite the feelings of consumers revealed by the poll. Geoblocking is one tactic merchants use to curtail fraud in e-commerce.
“Many online merchants do not want to see an obligation for traders to sell and deliver goods outside of the areas where they would normally sell,” the group said in a statement. “It is crucial that online merchants can rely on their right to economic and contractual freedom and freedom of entrepreneurial activity based on reasonable grounds. This also means that an individual company may decide not to sell to a consumer from another Member State. This qualifies as differentiation (and not discrimination) based on the place of residence and can be justified under so-called ‘objective criteria’ (Article 20.2 of the Services Directive). Ecommerce Europe believes that geo-differentiation, based on the place of residence under objective criteria, should remain a legal option for online retailers.”