Geoblocking And Geofiltering From the Competition Law Perspective

June 8th, 2020

Geoblocking is the practice by which economic operators in a Member State block or limit access to their online interfaces (such as websites and their applications). The practice of these undertakings translates into a refusal to sell to consumers abroad, for example by blocking access to websites, by redirecting to websites addressed to other Member States or by simply refusing to supply cross-border or accepting cross-border payments.

On the other hand, a distinction can be made between the practice of geoblocking and that of geofiltering. Geofiltering is the practice by which economic operators allow consumers to access and purchase goods or services at a cross-border level, but offer different terms and / or conditions if the customer is located in another Member State.

Competition law prohibits the practice of economic operators to refuse the sale, through art. 6 para. (1) lit. c) of the Competition Law no. 21/1996 (“Competition Law”), as well as by art. 102 of the Treaty on the Functioning of the European Union ("TFEU"), which prohibits the abusive use by one or more undertakings of a dominant position in the internal market or in a substantial part of it. Such an abusive practice may consist in applying in the relations with the commercial partners unequal conditions to equivalent services, thus creating a competitive disadvantage for them.

The Regulation (EU) no. 2018/302 on the prevention of unjustified geoblocking and other forms of discrimination based on citizenship or nationality, domicile or headquarters of customers in the internal market ("Regulation on geoblocking") aims to clarify the situations in which geoblocking is allowed or not. In this respect, the following are not allowed:

  • blocking or limiting by using technological measures or in other ways, the client's access to the online interface of the trader for reasons related to the client's citizenship or nationality or his domicile or headquarters;

  • redirecting the client to a version of its online interface that is different from that of the online interface to which the client initially tried to access and which, by its structure, language used or as a result of other features, is expressly intended for customers of a certain citizenship or nationality or with a certain domicile or headquarters - unless the client has given his explicit consent for such a redirection;

  • if the customer has given his explicit consent for such a redirection, it is not allowed to prohibit or hinder access to the version of the online interface to which he initially tried to access;

  • the application of some general conditions of access to the respective goods or services that differ, for reasons related to the client's citizenship or nationality or to his domicile or headquarters;

  • the application of different conditions for a payment operation, inter alia, when the latter is carried out through an electronic transaction by credit transfer, direct debit and in a currency accepted by the economic operator.

It is important mentioning that it is allowed to apply general conditions of access, including selling prices, which differ from one Member State to another or within a Member State and which are offered to customers in a particular territory or group of customers in a non-discriminatory manner.

Competition law concerns

Both geoblocking and geofiltering can be subject to competition law. Problems of an anticompetitive nature may arise if the economic operator practicing geoblocking or geofiltering is in a dominant position on the relevant market, and the unequal treatment at equivalent services cannot be justified by objective factors.

Geoblocking and geofiltering measures based on unilateral decisions of undertakings that do not hold a dominant position do not fall within the scope of the Competition Law or the TFEU.

On the other hand, geoblocking measures based on agreements or concerted practices (hence collusion between separate undertakings) may fall within the scope of legal provisions prohibiting anti-competitive agreements and are punishable by the competition authorities.

In conclusion, geoblocking can be an anti-competitive practice in the sense of the above, and most frequently blocking, limiting access to cross-border transactions lacks an objective basis. The reasons for geoblocking can be numerous, such as insecurity related to the legislation applicable to cross-border transactions and the associated risks in terms of consumer protection, environmental or labeling legislation, taxation and tax issues, delivery costs and other similar reasons.

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