The European Commission publishes its initial findings on geo-blocking in the e-commerce sector

Last 18th March, the Commission published an initial “Issues paper” on geo-blocking in the EU within the framework of the ongoing e-commerce sector inquiry. The findings are based on answers to questionnaires sent to more than 1,400 retailers and digital content providers.

Geo-blocking allows e-commerce sites to filter out users based on their location, which by itself, as a unilateral practice, is so far legal (as long as the retailer/provider is not in a dominant position), the problem could arise in the scenario of an agreement to geo-block.

The document has concluded that geo-blocking is considerably spread: 38% of retailers and 68% of content providers that responded to the questionnaire use geo-blocking in the EU. In the first case, up to 12% would be doing so a result of an agreement. The Commission has also suggested that focus will be placed on additional restrictions such as, for instance, (i) those preventing distributors/retailers selling online; (ii) those on passive sales into territories which have been exclusively reserved and (iii) those on authorised dealers in a selective distribution system.

The discussion over online content-based services is more delicate since these services are also regulated by copyright legislation, which is still national in scope. As indicated, the paper confirmed that 68% of service providers surveyed use geo-blocking to restrict cross border access, and from this, up to 59% would do so on the basis of an agreement.

The Commission will publish a more complete analysis this summer, which is deemed to explain in detail the concerns identified. Then, the final report is expected for early 2017. After this, enforcement measures against individual companies may follow.