This paper – available at https://www.competitionpolicyinternational.com/geo-blocking-between-competition-law-and-regulation – looks at the European Commission’s initiative to prevent geo-blocking. As I understand it, this is a short version of a larger report requested by the European institutions.
Geo-blocking refers to those practices by sellers which make it costly or impossible for consumers with residence in one Member State to obtain goods and services from other Member States. They also include the rerouting of customers away from websites hosted in other Member States to a website hosted in the Member State from where they are based (e.g. customers in Italy rerouted from a “.pt” version of an online store to its “.it” version), without their consent.
The paper begins with a review of the main rules in European Competition law devoted to the prevention of restrictions to cross-border competition – which cover mainly contractual restrictions to this type of trade (Art. 101 TFEU) or abuse of dominant position (Art. 102 TFEU). However, no rules presently cover unilateral decisions by non-dominant retailers to prevent sales across borders. It is this gap that the European Commission has recently tried to address with its Geo-blocking Regulation, which forbids a trader from refusing to make a sale based on the nationality or place of residence of the purchaser and forbids automatic re-routing on the basis of nationality or place of residence. Having described the proposed new rules, the paper then moves to its main objective: identifying deficiencies in the Commission’s approach. First, the scope of coverage of the geo-blocking Regulation excludes many of the copyrighted works that consumers are most likely to buy online and for which comparing offerings across Member States would be beneficial. Second, the Regulation has no public enforcement structure of its own to secure compliance.
The paper is interesting for anyone interested in the interaction between sales restrictions, competition law and geo-blocking. More interestingly (for me), it provides a window into how (competition) agencies try to deal with gaps in their enforcement powers. In the EU, this is streamlined because the Commission is the competition authority and, for most purposes, the main sectoral regulator and consumer protection agency; in other jurisdictions, this type of intervention takes the form of advocacy by the competition agency. Everywhere, however, the interaction of the regulatory framework and competition instruments is crucial for the attainment of the desired level of competition (together with the presence of a competition culture, of course).