Malta: Proposed Geo-Blocking Regulation Faces Backlash

Following a proposal which was put forward by the Commission in May 2016, on the 6th February, 2018, the European Parliament voted in favour of a proposed regulation on addressing unjustified geo-blocking. Geo-blocking is defined in the proposed regulation as when "traders operating in one Member State block or limit access to their online interfaces, such as websites and apps, by customers from other Member States wishing to engage in cross-border transactions." Geo-blocking also occurs when "certain traders apply different general conditions of access to their goods and services with respect to such customers from other Member States, both online and offline."

The proposed regulation is aimed at tackling instances of what is considered to be unjustified geo-blocking. However, there are certain instances where such different treatment of customers may be justified, such as in the exemptions listed below.

Exemptions

In reality, not all geo-blocking will be prohibited. The following activities are exempted from the scope of the proposed regulation:

  • Non-economic services of general interest;
  • Financial services;
  • Electronic communications services and networks;
  • Transport services;
  • Services of temporary work agencies;
  • Healthcare services;
  • Audio-visual services;
  • Gambling activities;
  • Activities connected with the exercise of official authority;
  • Social services;
  • Private security services; and
  • Services provided by notaries and bailiffs.

Most notably, in the case of copyright protected works such as video games, music and video services, geo-blocking will remain legal. In fact, the proposed regulation specifically exempts "audio-visual services", as outlined above.

Prohibition on discrimination based on Residence:

Through the proposed regulation, traders will no longer be allowed to block or limit a customer's access to the traders' online interface on the basis of their nationality, place of residence or place of establishment ("Residence"). In addition, traders may not automatically redirect customers to a different version of the online interface which is specific to the customer's Residence, unless the trader has obtained the customer's explicit consent for such redirection. In instances where it is necessary to redirect the customer in order to comply with Union or Member State law, the trader must provide the customer with a clear and specific explanation as to why the customer is being redirected.

The specific situations where discrimination of customers based on Residence is prohibited are the following:

  • Where the customer would like to buy physical goods (such as household appliances and electronics) from a trader and either:

    • The trader offers delivery in the general conditions of access; or
    • Those goods are collected at a location previously agreed upon between the trader and the customer in a Member State in which the trader offers such an option in the general conditions;
  • The customer would like to receive electronically supplied services (e.g. cloud services, firewalls and website hosting) from the trader (other than services which give access to and use of copyright protected works);
  • The customer would like to receive services other than electronically supplied services from the trader, in a physical location within the territory of a Member State where the trader operates – such as in the case of car rentals and hotel accommodation.

The above-mentioned will not apply to the sale of books as traders may apply different prices to customers in different Member States insofar as they are required to do so by Member State law. This is due to the fact that VAT rates on e-books differ in every country.

It is pertinent to note that there is no obligation for traders to supply cross-border delivery where this is not already provided.

Non-discrimination in the context of payments

Although traders may choose their own accepted methods of payment, they may not apply different conditions for customers where:

  • The payment is made by credit transfer, direct debit or a card-based payment instrument within the same payment brand and category;
  • Authentication requirements with respect to the Second Payment Services Directive are fulfilled; and
  • The payment is made in a currency which is accepted by the trader.

However, if there are justified and objective reasons, the trader may withhold the delivery of the goods or the provision of the service until he has received confirmation that the payment transaction has gone through.

Provisions of vertical agreements (i.e. agreements between traders) imposing obligations on traders in respect of passive sales (i.e. sales which were not solicited by the selling trader) which are in violation of the proposed regulation will be automatically void.

A small step forward

With reference to the proposed regulation, MEP Róża Thun, said: "This new EU law on geo-blocking is an important step towards an even more competitive and integrated Digital Single Market, for both consumers and traders. It also represents another milestone in the fight against the discrimination of consumers based on their nationality or place of residence, which should never be taking place in our united Europe. We have proven that the European Union can deliver concrete results for the citizens all over Europe, bringing positive changes in their daily lives."

Although the proposed regulation is a step forward in terms of limiting geo-blocking, many have expressed their dissatisfaction at the fact that since the proposed regulation exempts audio-visual services from its scope, services such as YouTube, Netflix and Spotify will not be affected and will still be able to geo-block customers. MEP Julia Rede voiced her concerns on the matter on Twitter: "Don't be fooled if a speaker says that we abolished #geoblocking though. We didn't. Only for buying goods & services, but not for digital media like videos, games, ebooks. Progress is slow."

Andrus Ansip, the European Commissioner for Digital Single Market and Vice President of the European Commission, replied to criticisms by pointing out that the scope of the proposed regulation will be reviewed 2 years after its entry into force, and therefore the exemptions (including audio-visual services) are not set in stone.

He also urged Members of the European Parliament and Member States to come to an agreement on a separate set of rules on cross-border access to audio-visual content online. He added: "Making more audio-visual content available online in other EU countries will ease the cultural straitjacket that exists in Europe".

The proposed regulation was approved in Parliament with 557 votes in favour and 89 against, with 33 abstentions. It will not become binding law until it has been formally approved by the Council. Following this, once the regulation is published in the Official Journal, the rules will become directly applicable after a period of nine months from the date of publication.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions