On December 3, the EU finished with geoblocking in eCommerce. We tell you what it means and how it affects your online store.
On December 3, the European Union put an end to geoblocking in eCommerce, and many eCommerce has caught on the wrong foot. Do you know exactly what it is and how does this change affect you? If not, keep reading that today we will clear all doubts, so you start the year selling throughout Europe and complying with the law.
What is the geoblocking of the European Union?
Actually, and to be more precise, we should say what it was, because since this December it has gone down in history.
Basically, geoblocking is a practice that consists in that an electronic commerce actively prevents access to a specific site through IP blocking to residents in certain countries based on their nationality or place of residence.
It also includes the practice of discriminating against these same users by offering them different conditions than those obtained by any other European citizen, even allowing them to enter the site.
Is it really applying so much?
Much more than you could imagine at first. There are different logistic, strategic or price reasons why an eCommerce may decide to apply this type of geographical restrictions. And the fact is that they do it, but whatever they are, it is not justified within the European Union as of this month.
This is not what we say, but Andrus Ansip (Vice President of the Digital Single Market). And it also provides some additional information, such as that in 2015 almost two thirds of European buyers were affected by geoblocking. The exact figure is 63% of community customers who have been left with the desire to close a purchase.
The position of the European Union
Bearing in mind that one of the basic and foundational premises on which this establishment was constituted was the single market, the responsible ones saw the limits on the digital market with concern, because they were leaving out a truly representative part of the trade that, moreover, is in a very important progression.
This situation led them, in May 2016, to approve the new regulation, which explicitly prevents a European customer from being blocked, discretionally redirected to another website or prevented from using a specific means of payment. The approval has been delayed until the 3rd day, but it is already fully in force.
What is intended is that the range of choice is greater within the EU borders, offering a series of rules and mechanisms to ensure greater protection of the eCommerce customer, more reasonable logistical costs and a simplification in the application of taxes or tributes.
What can not be done from now
For being concrete, we will go into detail about the practices that this new community provision legislates.
# 1 – Block access or redirect the user
It is a fairly common practice to use the IP of the user who browses the page to redirect it to a local version that may have other products, prices and conditions. This can never be done automatically, unless the explicit consent of the user mediates.
Obviously, there is a circumstance in which the law contemplates that a user may be blocked, and it is about cases such as age restrictions on access to certain products that may be applied according to the laws of each member state.
# 2 – Do not offer a level playing field
It is important to emphasize that “blocking” does not only mean preventing access: it is also considered to block the fact of offering different conditions in terms of pricing policies or means of payment.
An Italian and a Portuguese customer have the right to buy a certain product for the same price. The idea is that everyone can have the same conditions and promotions as a local client even if they buy in an establishment outside their country of origin or residence.
Accepting payments from all European banking entities was already mandatory; what happens is that now it is also contemplated that the same Italian and Portuguese customers we mentioned in the previous example, can do so using the same bank cards, PayPal or even transfer that local clients can use.
What the EU does not oblige you with this law
It is also important to be clear about this point because, on paper, it could be interpreted as the fact that the European Union even obliges us to serve any member country and that is not exactly the case. That the same conditions are demanded does not imply that we are obliged to make the shipment to the state of residence of any client.
This is a bit cumbersome, so let’s see it with an example.
EXAMPLE: imagine that your store receives a visit from Portugal. Your obligation is to sell the same product to a local customer, same price and means of payment. But if Portugal is not within the area you serve your orders, the client will have to provide you with a postal address in one of the countries that you serve to deliver the order.
This raises an important detail, because we have to foresee the possibility of entering different billing and shipping addresses.