MEPs vote to end cross-border bias in online shopping

By Will Chu

- Last updated on GMT

MEPs also decided to end the practice whereby consumers cannot access a foreign website but are directed to a website in their own country. ©iStock/scyther5
MEPs also decided to end the practice whereby consumers cannot access a foreign website but are directed to a website in their own country. ©iStock/scyther5

Related tags European union

Shopping for specialty foods could become easier after an EU committee voted to lift restrictions preventing retailers from selling products online to consumers living in another member state.

The trade MEPs want to see the end of geo-blocking, a practice that means traders can refuse to sell goods or services to people living in other EU countries. 

Included in the vote was the decision to ban online retailers from declining a purchase made with a foreign bank card.

The MEPs - members of the committee on internal trade and consumer protection (IMCO) - voted to back amendments to a draft proposal drawn up by the Commission to ensure that foreign consumers had the same access to goods and services as local customers.

With the mandate approved by 31 votes to 2, with 1 abstention, draft rapporteur Róża Thun can now begin three-way talks with the Council and the Commission with the aim of reaching an agreement on the final law.

“Consumers should be able to compare products from across the EU and buy those best suited for their taste and wallet,” ​said Monique Goyens, director general of The European Consumer Organisation (BEUC).

“It defies core EU principles when retailers refuse to sell a product or service to consumers just because they live abroad or use a foreign bank card. This must become a practice of the past.”

“Our work aims at a gradual opening of the European market for consumers and for traders by giving them clear rules. Consumers will have better access to goods and services online and for traders it will be less burdensome to sell to consumers from different member states,”​ added IMCO rapporteur Róża Thun.

However, according to the director-general of industry association that represents the interests of retailers EuroCommerce, Christian Verschueren, one of the reasons traders are not willing to sell cross-border was legal uncertainty and despite the outcome of today's results, more could be done to clarify trader's position from a legal standpoint. 

“We have always supported the Regulation’s general aim of removing any discrimination against consumers, and are pleased with many of the amendments voted on today," ​he said.

"Unfortunately, despite the MEPs’ real efforts to find common-sense solutions to issues of legal clarity, the proposal in its present form will still do little to help in building a digital single market for SMEs, or satisfying consumers.”

Verschueren added that harmonisation of very different consumer and other regulations across Europe was the only way to boost cross-border sales. He added that these updated geo-blocking regulations would deter SMEs from actively trading across borders as it left traders exposed to legal risk if they delivered to customers abroad.

"This will also not help consumers, who will have to arrange their own delivery, in gaining access to the best choice of goods at attractive prices. We appreciate the Parliament’s work in improving the text, but regret that what was a flawed proposal remains an imperfect one.” 

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online platform Ali Kerem Yücel
The lifting of restrictions is an attempt to end the discriminatory practice of geo-blocking. ©iStock/Ali Kerem Yücel.

The EU’s actions come on the back of previous findings​ that revealed during website registration, 27% of online retailers prevented cross-border shoppers from successfully registering on their website.

Further findings revealed that even if consumers reached the payment stage, 26% of websites shoppers couldn’t pay as their payment method was declined.

Finally, in 37% of all websites, no information on delivery restrictions was clearly displayed on the starting page or during the ordering process.

In 2015, the Commission’s Communication on the Digital Single Market (DSM) strategy for Europe, identified geo-blocking as a primary cause of consumer dissatisfaction and of fragmentation of the Internal Market.

In response, the Commission set in place legislative proposals in 2016 to end the practice.

While these proposals set out to end EU segmentation that geo-blocking causes, some geographical restrictions are needed and backed by law.

For example, geo-blocking is used in legislative issues in prohibited products such as tobacco, alcohol or online gambling.

However, many geo-restrictions may be considered as forms of consumer discrimination.

A copy of the draft report is available​ here.

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