EU Court of Auditors: More action needed against unjustified geo-blocking

Unjustified geo-blocking in cross-border online trade is still a problem in the EU. This was highlighted by the EU Court of Auditors in a report published on Monday. A regulation that came into force in 2018 was supposed to make such blockades or detour in e-commerce within the EU largely a thing of the past. However, the auditors criticize that consumers continue to be discriminated against when shopping online based on their nationality or place of residence. There is still a lack of practical implementation of the regulations in the EU countries. In addition, areas such as audiovisual services are not yet covered by the regulation.

According to the report, geo-blocking occurs, for example, when retailers operating in a certain member state restrict access from other EU countries to their online user interfaces. According to the European guidelines, this practice can be justified in certain cases. This can be assumed, for example, if different laws apply in the member states, such as different age limits for the purchase of alcohol. However, the EU legislator has generally prohibited geo-blocking in e-commerce. The EU Commission had also correctly identified the challenges and needs of EU customers and online retailers in connection with such blockades in advance.

Overall, the Court of Auditors considers the Geo-blocking Regulation to be "a step forward". However, there are still challenges with regard to its proper and uniform implementation. The Commission had already slipped up in the impact assessment, as evidenced by "a limited quantitative assessment of economic aspects, a lack of data, an incomplete review of consistency with other relevant EU legislation and inadequate monitoring arrangements". The member states had also enforced the regulations "with delays". In Germany, this is the responsibility of the Federal Network Agency, which only set up a relevant complaints office in mid-2019.

Fines between 26 and 5 million euros

Furthermore, there are "significant differences" in the penalties, which jeopardizes a level playing field in the internal market, explains the supervisory authority. The rules on jurisdiction are not clear enough. It is not even clearly regulated whether fines should be imposed in the country of the customer or the trader in the event of infringements. In some member states, infringements could also be prosecuted under criminal law, in others not. The amount of the potential fines is between 26 euros and 5 million euros.

If companies are the end customers when purchasing goods or services, dispute resolution can be difficult according to the auditors. This is because it is unclear who is responsible. This is particularly true when traders are involved who operate in the EU but are not based there. In most cases, all parties involved are also not sufficiently informed about the scope of consumer protection. Sometimes they do not know that there are arbitration bodies at local and EU level.

Blockades for digital media remain problematic

The Court of Auditors questions the fact that the regulation does not yet apply to "problematic areas" such as digital media with e-books, songs, films, computer games and streaming services. This restricts the scope of the regulation and creates ambiguity. Although the Commission has held talks with the industry about the availability of audiovisual content and wider access to it, it has postponed further legislative steps due to a lack of data.

The inspectors advised the Commission to carry out a study on the inclusion of other sectors and to improve the enforcement of the rules. The Brussels-based government institution has promised to continue analyzing the effects of an extension. The evaluation of the regulation this year would also provide an opportunity to make providers and customers more aware of the actual scope of the regulations.

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