European Commission clears path for cross-border online purchases

The European Commission has proposed several new measures to grant consumers easier access to foreign web shops. One measure is that these web shops cannot refuse a customer based on his residence.

Foreign online purchases still unusual

The unified European market does not actually exist in the digital economy. In 2014, 44 % of consumers bought something online, but only 15 % did that on a foreign website.

Those who do attempt to buy something abroad, often hit obstacles they cannot circumvent. Many online retailers refuse to ship abroad, with a study from the European Commission revealing only 37 % of web shops actually doing so. Although, even if they do provide this service, the shipping costs may still be extremely high.

A visit to a physical store abroad does not result in all these issues, because then a consumer is treated a regular, local consumer. The European Commission feels this should also be the way online services and goods should be handled.

Tackle geoblocking

That is why the European Commission wants to tackle geoblocking, which is designed to block foreign consumers from ever reaching the sale modules on a website.

Geoblocking will mostly outlawed if the European Commission gets its way: retailers will no longer be allowed to block their website from other European consumers and they will also no longer be allowed to divert these consumers to a local web shop. Payment terms will also have to be similar for local buyers and consumers from the European Union.

Nevertheless, the ban on geoblocking will not be absolute: it can be allowed if local regulation deems it necessary, like with the sale of alcoholic beverages. There will also be more leniency towards smaller companies.

Geoblocking does not mean every web shop will be required to ship abroad. It merely suffices that a European citizen has the same options a local consumer has. For example: Belgians will still need to organize transport or provide a local German address if they wish to buy something on a German web shop that does not ship abroad.

Inspect shipping costs

The European Commission also wants to tackle shipping costs related to cross-border shipments. Currently, these can be 5 times more expensive than for local shipping, without an actual clear correlation to the actual costs.

The Commission hopes the industry will self-regulate this issue, but to increase competition and transparency, the Commission will publish listed prices of universal service providers. It will also require transparent and non-discriminatory third-party access to cross-border parcel delivery services and infrastructure. 

If this approach is deemed unsuccessful, the Commission aims to enforce new measures in 2019.

Customer assurance

The European Commission also wants to improve consumer rights in case something goes wrong. Many European still hesitate when it comes to cross-border purchases, because their own rights are not clear or because they feel these cannot be easily enforced.

National enforcement authorities will receive additional tools to shut down website hosting scams, request information from website registrars to detect the identity of the responsible trader and to see if the website’s sales conditions are in accordance with EU law.

The European Commission’s proposal still needs to be ratified by the European Parliament and the Council of Ministers. The Commission has asked for a speedy process.