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Regulation on Addressing Unjustified Geo-blocking and Other Forms of Discrimination

Regulation on Addressing Unjustified Geo-blocking and Other Forms of Discrimination

Czech Republic
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Internet traders, who have not yet managed to recover fully from the effects of the GPDR on their activities, are already facing another regulation likely to have a significant impact on technical solutions used in the operation of Internet businesses. In March 2018, Regulation (EU) 2018/302 (the “Regulation”) was adopted, the purpose of which is to solve so-called “unjustified geo-blocking” by removing certain obstacles to the operation of the internal market and by preventing discrimination based on nationality, place of residence, or place of establishment in cross-border online transactions.

Paradoxically, the Regulation does not apply to the provision of multimedia content, allowing traders to apply different conditions – including different prices – for identical or similar services in different EU Member States. In its Preamble, the Regulation acknowledges that differences in EU Member States’ legislation continue to represent significant barriers to cross-border trade. In the case of the Czech Republic, a language barrier poses a further obstacle to cross-border trade.

The Regulation, which will enter into effect on December 3, 2018, deals with three primary issues: (a) access to (online) interface of an e-shop; (b) a prohibition against offering different terms of business for customers from various countries of the EU; and (c) a prohibition against discriminating for reasons relating to payment for goods or services.

Access to Online Interfaces

The Regulation prohibits Internet traders from blocking or limiting (whether by technical or other means) a customer’s access to the trader’s e-shop’s online interface for reasons related to the customer’s nationality, place of residence, or place of establishment. Redirection of a customer to a different language version of the e-shop is also prohibited for the same reasons, unless the customer has explicitly consented to that redirection in advance. Therefore, automatic redirection of a customer to a different language version of an e-shop without the customer’s consent will be prohibited. The Regulation also provides that even when the customer provides explicit consent for the redirection, the version of the trader’s online interface to which the customer initially sought access will remain easily accessible to that customer. It is, in particular, compliance with this obligation that may mean that multi-language e-shops will have to change the technical arrangements of their user interface.

Access to Goods or Services

The Regulation also prohibits using different terms of business for customers from different countries of the EU. In particular, it states that a trader shall not apply different general conditions of access to goods or services for reasons related to a customer’s nationality, place of residence, or place of establishment. This means, for instance, that if a customer from Austria orders a delivery of goods to an address in the Czech Republic, a Czech trader may not apply conditions for that delivery that are different than those it offers Czech customers. The Regulation expressly states that mere compliance with this prohibition of discrimination by a trader should not lead traders to specifically aim their activities at Austrian customers. It is known that the question of which country a trader aims its activity at may be very important for determining in which country the trader can be sued, as well as for the choice of applicable law in the relationship between the customer and the trader. Ensuring equal access to goods and services will not require in this case that the trader  comply with obligations prescribed by Austrian law, or that the trader has a duty to inform customers of these requirements.

Non-Discrimination for Reasons Related to Payment

The Regulation also prohibits discriminatory conditions relating to payments for goods or services. In particular, if the requirements specified in the Regulation are met, traders may not, within the range of means of payment they accept, apply different economic conditions for individual customers for reasons “related to a customer’s nationality, place of residence, or place of establishment, the location of the payment account, the place of establishment of the payment service provider, or the place of issue of the payment instrument within the Union.”

By Josef Aujezdsky, Partner, eAdvokacie 

This Article was originally published in Issue 5.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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JŠK, advokátní kancelář, s.r.o. (JŠK) is a medium-sized law firm based in Prague providing a comprehensive range of commercial legal advisory services in the Czech Republic. Our team consists of almost 30 lawyers, five of whom are partners with many years of experience from leading international law firms. We advise local and international clients from banking, insurance and various industry sectors, boast a respected projects practice, and work for the public sector at the federal and municipal level.

Ever since it was founded in 2004, JŠK has striven for the epitome of professionalism, expertise and ethical integrity. We continuously seek to surpass what large global law firms can offer and to give our clients a personal approach. All mandates are equally important to us regardless of size as we guide clients through both complex and seemingly routine matters.

Our clients turn to us for advice when implementing their business plans across all areas of commercial law. We are proud members of PONTES: the CEE lawyers, a unique network of law firms through which we provide services not only in the Czech Republic but also in Austria, Bulgaria, Hungary, Poland, Romania and Slovakia.

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