Everything You Need to Know About Geoblocking in the EU
The 5 by 5: Five Answers to Five FAQs About the New European Geoblocking Regulation
Maybe you’ve heard the term: geoblocking. Something to do with the internet and e-commerce, right? Yes. And with the European Commission. In February 2018, the European Commission (EC) ruled that geoblocking must be eliminated within the EU because it represents a hindrance to online trade. The ambitious goal behind this ruling is to support a digital single market throughout the EU.
As of 3 December 2018, this Geoblocking Regulation has been in effect as an important first step towards the European digital single market. But does it represent the second coming of the GDPR? Is it something that marketers have to watch out for?
Yes and no. In this post, we’ll explain the details of the EC’s Geoblocking Regulation and examine what effect it will have on those who do email marketing across European borders.
“Geo-blocking refers to practices used for commercial reasons, when online sellers either deny consumers access to a website based on their location, or re-route them to a local store with different prices.”
1️⃣ What Is Geoblocking?
The Geoblocking Regulation aims to make virtual trade across national borders unified and unproblematic. The regulation applies to anyone who offers goods and services on the internet and has customers within the EU.
Geoblocking is the act of limiting access to websites based on location. The most famous online platforms that use geoblocking are media streaming services such as Netflix and Amazon, which have completely different offerings based on the IP address of their user. In all cases, it is this IP address that makes it possible to identify the location of the user.
- To abolish any form of discrimination based on where European consumers reside
- To further the internal European market, specifically a digital single market
But it is not only streaming services that use geoblocking. Many online shops do, as well. For example, an online shop might not sell to a certain country because it cannot ship there. Or it might not accept a payment method from a bank or credit institution in another country. Another way geoblocking occurs includes country-specific automatic redirects for website visitors
These restrictions are now banned due to the Geoblocking Regulation.
2️⃣ What Does the New EU Geoblocking Regulation Require?
Starting on 3 December, online shops in the EU have to guarantee customers within the EU equal access to their online shops.
Now, this doesn’t mean you need to go delete your country-specific pages. But it does mean that an automatic or forced redirect to a country page is no longer allowed. Online shops now need the consumers’ consent if they want to send them to a local page.
For example, we have an overlay on our international Newsletter2Go (.com) page. It offers German customers the option to switch to the German domain. The key phrase here is “option.” The website visitor has to make the decision for themselves if they want to visit the German site or stay on the English-language one.
What’s more, under the new Geoblocking Regulation, the customer must be able to quickly understand any pricing differences between pages.
According to the Geoblocking Regulation, all customers in the EU should receive equal treatment. Suppose a customer residing in Finland wants to buy a new television. They find a good offer online at a webshop that has both a German version and an Irish version. The Irish shop has the television the customer wants for the lowest price. The customer must be able to choose the cheapest option available for the television.
Note, however, that the Irish shop does not have to guarantee that they will deliver the television to Finland. The shop only has to allow the Finnish consumer to buy the television at the country price they choose. The customer can pick up the goods themselves or set up an independent delivery of the television.
In addition to making all products available for purchase equally throughout the EU, every website visitor must have access to the same payment options. Country-specific pages can still display varied payment options. However, companies can no longer block individuals from using a payment based on their IP address.
3️⃣ What Do I Need to Change to Conform to the New Regulation?
Make sure your website conforms to these requirements:
As of 3 December 2018, autoforwarding is no longer permitted. The customer must consent to a local redirect.
Web forms for entering addresses must be created in such a way that they accept all EU countries. This means order forms, specifically, must allow orders from within the entire EU, even if delivery to a country is not guaranteed.
- Payment methods
Every web visitor from the internal EU market must have access to the same payment options.
Delivery conditions must be transparent, and this includes information about which countries they ship to. Retailers are not obligated to deliver to every EU country. However, they must give their customers the option of organizing their own delivery (by picking goods up themselves or setting up independent delivery).
4️⃣ Are There Any Exceptions to the New Geoblocking Regulation? If So, What Are They?
The Geoblocking Regulation does not apply to all areas equally. The following service types count as exceptions:
- Copyrighted online material
- Health and financial services
- Passenger transport (bus tickets or airfare)
- Small businesses (a business that makes less than € 17,500 in annual revenue)
Because media streaming overlaps with issues of copyright, all streaming services such as Netflix, Spotify and BBC iPlayer have escaped regulation, for now. This exemption will be assessed again in 2020.
Many journalists have been critical of this aspect of the regulation. Some have gone so far as to call this exclusion an unwillingness to enact meaningful reform of digital copyright.
Note that the Geoblocking Regulation does not mean all channels are now created equal.
You can continue to carry out a special campaign on your Italian webshop that is not offered on your German one. And different pricing strategies for different channels is still permissible. For example, the same retailer can offer an item cheaper on ebay than on Amazon.
5️⃣ How Will the New Geoblocking Regulation Affect Email Marketing?
Let’s look at some concrete examples of what this could mean for email marketing.
Let’s assume that the website ShoeParade has a total of five top-level domains for different countries: one each for Germany, France, the USA, Singapore and the Netherlands. Previously, prospective customers visiting the online shop from France were automatically redirected to the French website.
To comply with the new Geoblocking Regulation, ShoeParade has lifted the forced redirects and replaced them with a pop-up asking website visitors if they would like to visit the localized page for their country. But does ShoeParade also have to change anything in their email marketing?
➡ 1st scenario
The German e-commerce shop sends a separate newsletter in the language of each target country. French customers, for example, receive an email offer that links to a French page (.fr).
The shop can continue to do this in the same way. The only thing the shop has to ensure is that it gives its contacts the chance to access the German side of the shop should they chose to do so.
➡ 2nd scenario
The German online shop sends a newsletter in English to all its international customers (e.g., customers from France, the USA and the Netherlands). The products and links in this mailing forward recipients to the shop’s international page (.com).
Recipients from countries outside the EU can be redirected to a page in their own country. A recipient can either go to the international shop or, if, for example, there is a dedicated webshop for Singapore, the visitor can be automatically forwarded to this page (because Singapore lies outside the EU).
However, the situation is different for EU residents. For example, a French customer shouldn’t be automatically redirected from the international site (.com) to the French site of the shop (.fr). That customer has to decide for themselves whether they’d prefer to visit the local website or not.
It may come as no surprise that the future of the Geoblocking Regulation in the U.K. is currently still up in the air.
In March 2018, the European Commission issued a statement on the topic. It implies that unless otherwise specified, if there is a “no-deal” withdrawal, then the Geoblocking Regulation would no longer apply to the U.K. as of the withdrawal date (29 March 2019). The U.K. must, it argues, continue to abide by the Geoblocking Regulation in cases where retailers are selling to the EU. So a U.K. company could not offer one pricing option to residents of France and a different option to residents of Italy.
The British government issued a similar statement. It explicitly said that if there was a “no-deal scenario” then the law would no longer be valid in the U.K. It would, however, still apply for U.K. companies doing business within the EU.
Specialists in international media and communications have noted these statements may be an oversimplification. Furthermore, the “draft Withdrawal Bill states that all EU regulations in force before the exit date will be transposed into U.K. law.” Although the status of this Withdrawal Bill remains unclear as of 10 December 2019.
The answer is – we shall have to wait and see.
In Sum …
The Geoblocking Regulation will have an impact on the European e-commerce sector, but it will not directly affect email marketing. It more so applies to the backend of your e-commerce platform. Forms, redirects and payment options are all areas you should be checking.
When it comes to email: Make sure any localized redirects on landing pages that your email campaigns link to are neither forced nor automatic for EU residents. If you follow this rule of thumb, you’ll be in good shape. And don’t forget to check links in older templates!