Ecommerce Europe’s recommendations on the Geo-blocking Proposal ahead of the Competitiveness Council meeting

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In light of the Competitiveness Council meeting of Monday 28 November, where the Slovak Council Presidency hopes to achieve a political approach on the Geo-blocking Proposal, Ecommerce Europe has been in close contact with policy makers to share with them detailed recommendations concerning specific provisions of the draft regulation addressing geo-blocking. In a nutshell, Ecommerce Europe wants to highlight its main remarks on this challenging political dossier that are based on the amendments that the association has recently approved and shared with EU legislators.

General message of Ecommerce Europe

Ecommerce Europe supports the efforts of European legislators to complete the Digital Single Market. In the context of the geo-blocking discussions, online merchants are convinced that the best way to reduce this phenomenon is by working to eliminate existing barriers to cross-border e-commerce, starting with the top three: legal fragmentation, VAT-related issues and parcel delivery. However, Ecommerce Europe supports the objective of the draft regulation to allow all customers to benefit from the same general conditions that would be applicable if such customers would have their habitual residence in a country where the trader actually delivers the goods or provides services.

It is vital that, traders’ fundamental freedom to contract is always safeguarded. Therefore, traders should always be allowed to select the area(s) to which they want or do not want to direct their activities. Moreover, this Regulation should not be understood as providing for an obligation to deliver goods cross-border to another Member State where the trader would not otherwise offer the possibility of such delivery to its customers or is not willing to offer it.

Interaction between geo-blocking regulation and Union law

EU policy makers should ensure that both traders and customers are aware of which rules will be applicable in the context of sales covered by the scope of this law. Legal certainty in these cases is essential for all parties and Ecommerce Europe is pleased to see that the Council is already working in this direction, even though more legal clarification is needed, specifically on the law applicable to a sales contract.

In particular, not being subject to the provisions of article 6(1) of the Rome I Regulation and article 17(1) of the Brussels I Regulation is very important for merchants that want to serve consumers resident outside the territory the webshop is targeting, given that consumers are willing to pick-up the goods, services and digital content in a member state other than the one of their residence and that is covered by the territorial scope targeted by the traders. Traders need legal certainty about this, and therefore need a clearer rule in the text of the Regulation as such.

How to assess the conformity of a product in the context of the proposed regulation?

It is crucial for online merchants that any assessment of whether the product has a non-conformity (a defect) has to be made based on legal obligations and conditions in the country where the goods/services/digital content are actually supplied. A product will therefore not be considered as defective if it complies with the requirements of the country of delivery, even if it turns out that it does not comply with the requirements of the customer’s home country. This would also include labelling, product safety, sectorial or language requirements.

Explicit consent for rerouting would hamper customer’s shopping experience

The practice of rerouting is usually used by the trader to provide the customer with a better, tailor-made shopping experience, for instance, in his or her own language and currency, adapted to the local conditions of customer services and delivery. In Ecommerce Europe’s opinion, seeking customers’ explicit consent for rerouting – as foreseen by the draft regulation – would have a negative and irritating effect on the customers’ shopping experience, as it would unnecessarily complicate the process of continuing the search – or returning to the original website. On the other hand, explicit consent would be a burdensome and costly requirement for businesses. That is why Ecommerce Europe suggests an opt-out option – based on clear information about the fact that the customer is redirected – and the implementation of an easily accessible back button allowing the customer to simply return to the original online interface that he or she sought to access.

Payments: potential issues related to co-branded cards and direct debit

Ecommerce Europe welcomes the fact that the draft regulation allows traders freedom to offer payment methods according to their choice. However, further clarification is needed, for example, of what a payment brand is. It needs to be clear that traders who offer a specific payment method, such as iDEAL, Bancontact, DanKort etc., which can be used by some customers, will not be forced to accept Maestro, Visa, or other brands of card held by foreign customers simply because the national card is co-branded. Furthermore, Ecommerce Europe advocates an obligation to offer the same payment method to customers abroad, only in such cases where such payment is available in the member state in which the customer has his residence or is settled.

Ecommerce Europe wishes to alert policy makers to an issue concerning direct debit, now under the scope of the draft regulation. The interpretation of the term ‘direct debit’ as a payment method is unclear. Most commonly, direct debit is understood as the payment method where the customer is paying by a single authorization to the trader to debit the account of the customer. In this sense, direct debit is similar to invoice payments and national direct debit systems differ substantially across the Member States. Ecommerce Europe strongly suggests excluding direct debt payment from the scope of this Regulation for the same reasons as the comparable invoice payment systems are excluded. This will also avoid different interpretation of the term ‘direct debit’.

For any questions on the position of Ecommerce Europe on the geo-blocking file, please contact the Policy Advisor – Mr. Luca Cassetti – at lucacassetti@ecommerce-europe.eu.

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