EU Court of Auditors: More action needed to tackle unfair geoblocking

Unfair geoblocking in cross-border online trade remains a problem in the EU. The EU Court of Auditors highlighted this in a report published on Monday. In fact, with a regulation coming into effect in 2018, such disruptions or changes to e-commerce within the community should largely be a thing of the past. But auditors complain that consumers are discriminated against based on their nationality or place of residence when shopping online. EU countries still lack practical implementation of the rules. Furthermore, sectors such as audiovisual services are not yet covered by regulation.

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geoblocking is located According to the report For example, if retailers operating in a certain Member State restrict access to their online user interface from other EU countries. According to European guidelines, this practice may be justified in some cases. This could be considered, for example, if different laws apply in Member States, such as different age limits for purchasing alcohol. In principle, the EU legislature prohibits geoblocking in e-commerce. The EU Commission fundamentally correctly identified the challenges and needs of EU customers and online retailers in relation to such disruptions.

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Overall, the Court of Auditors considers the geoblocking regulation to be “a step forward”. However, there are still challenges regarding their proper and equitable implementation. The Commission had already made mistakes in the impact assessment, evidenced by “only limited quantitative assessment of economic aspects, lack of data, incomplete review of coherence with other relevant EU legislation and inadequate monitoring rules”. Member states also implemented the rules “lately”. In this country, the Federal Network Agency is responsible for this, and it only established a relevant complaint office in mid-2019.

Fine between 26 and 5 million euros

The supervisory bodies point out that there are also “significant differences” in the restrictions, which threaten equal competitive conditions in the internal market. The rules of jurisdiction are not clear enough. It is also not clearly regulated whether fines should be imposed in the customer’s or dealer’s country for violations. In some member states, violations may also lead to criminal prosecution, in others not. The possible fine amounts to between 26 euros and 5 million euros.

According to auditors, dispute resolution can be difficult when companies are the end customers when purchasing goods or services. Because it is not clear who is responsible for this. This is especially true when involving traders who are active but not based in the EU. In most of the cases, everyone involved does not have adequate knowledge about the scope of consumer protection. Sometimes they are not aware that there are arbitration bodies at local and EU level.

Disruptions to digital media remain problematic

The Court of Auditors questions the fact that the regulation does not yet apply to digital media in “problematic areas” such as e-books, songs, movies, computer games and streaming services. This limits the scope of application of the regulation and creates ambiguity. The Commission is with the industry However, discussions regarding the availability of audio-visual material and widespread access to it, but further legislative steps were postponed due to lack of data.

The inspectors recommend the Commission conduct a study to include other areas and improve the implementation of the rules. The Brussels government institution agreed to continue analyzing the effects of the enlargement. The evaluation of the regulation this year will also provide an opportunity to make providers and customers more aware of the real scope of application of the requirements.

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