E-commerce: the implications of the end of geo-blocking
today Feb 13, 2018
Last week, the European Parliament voted to stop e-commerce sites using geo-blocking. This will allow consumers to order goods across the whole EU freely, though delivery issues risk greatly limiting the measure's impact.
The bill, passed with 557 votes in favour and 89 against, prohibits e-commerce operators from denying purchases to consumers based on which country they are connecting from. However, the same bill doesn't impose on e-commerce sites an obligation to deliver across the entire EU. In other words, the end of geo-blocking would chiefly impact the online sale of services, while that of goods will continue to be possible only within boundaries established by vendors.
"It's a first step," admitted the European Commissioner for the Digital Single Market, Andrus Ansip, who said that, for the time being, only 7% of European e-commerce sites have opened their sales to consumers from other member countries. On the other side of the divide, according to the E-commerce Europe association, 70% of online buyers are making purchases on foreign websites. A figure explained by the presence of major e-tail operators, whose influence extends across country borders.
"Too frequently, online buyers are refused a purchase or face different purchasing terms if they want to buy goods or services in a member state other than their own," said MEP Virginie Rozière. "These practices, besides contradicting the non-discrimination principle which is essential for the functioning of the internal [European] market, were only rarely sanctioned."
This is where the end of geo-blocking raises a number of questions. Purchasing terms and pricing by websites and brands can vary from country to country. Establishing an online single market therefore requires uniformity in product range, pricing and terms on a continental scale. Legislation imposing Europe-wide deliveries, especially one that harmonises delivery costs, is therefore eagerly awaited by e-commerce operators.
However, product sales aren't the EU's only concern in this domain. Brussels is in fact trying to find a solution to stopping the geo-blocking of copyright in Europe, with the objective of fostering the free, Europe-wide circulation of culture. Among other things, this could lead to the creation of a 'European Netflix'.
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