The Geo-blocking Regulation - which was finalised earlier this year and will come into effect across the EU on 3 December 2018 – has received further clarification in recent government guidance.
The Regulation prohibits online sales of goods and services that discriminate between customers in different EU states; sellers will no longer be able to restrict customers from being able to view and purchase products on the basis of their nationality or place of residence or establishment.
In September 2018 the European Commission clarified in a Q&A document that the Regulation will apply not just to business to consumer transactions but also to business to business transactions - if such transactions have not been individually negotiated and if they apply directly between a business and an end user. The Commission gives the example of the provision of cloud computing services by a provider in one Member State to a business based in another as a relevant kind of B2B transaction.
From 3 December 2018 the Regulation will apply in the UK as in all other Member States and will continue to apply beyond 29 March 2019 if a Brexit deal is reached in time. In terms of what happens if a Brexit deal is not reached, on 12 October 2018 the Department for Business, Energy & Industrial Strategy published guidance stating that: "In a ‘no deal’ scenario, the version of the Geo-Blocking Regulation will cease to have effect in UK law. The original EU Regulation will continue to apply to UK businesses operating within the EU, and indeed all other non-EU businesses selling goods and services into the single market."
Although the Regulation will apply, in the event of 'no-deal' scenario enforcement of its terms may become trickier. An EU Member State would not have the power to enforce an English court judgment and an English court would not have the power to enforce a Member State one, resulting in the need to rely on national case law that recognises and enforces foreign judgments instead. This could lead to a considerable increase in time and cost to a claimant seeking to enforce the Regulation against a non-compliant UK business.
UK businesses that fall within the scope of the Geo-blocking Regulation that have already made necessary changes to meet the compliance requirements of the Regulation prior to 3 December 2018 need not worry about the implications of a no-deal Brexit vis-à-vis the Regulation. However, those that fail to comply cannot rely on a 'no-deal' scenario to avoid the Regulation because, although potentially harder to enforce against them as of March next year, the Regulation will nevertheless apply from 3 December 2018.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.