Geoblocking Ordinance: Attention Warning Trap

Complex Themam but relevant for game developers and many more

The topic of geoblocking can be very complex in detail and may affect operators such as esports teams, game providers, streamers, influencers, hosting providers, app operators and many more, in addition to online shops. There is also an interface with issues of right of withdrawal, payment services and numerous other legal issues.

I would be happy to answer any questions or for a consultation. But now to the subject!

Geoblocking Regulation

Attention. Since yesterday, another potential warning trap has opened up for operators of online shops and similar media. The EU Geoblocking Regulation.

Regulation (EU) 2018/302 aims to end unjustified discrimination in online purchases based on nationality, place of residence or place of establishment within the internal market. The ban on geo-blocking is an important part of the Digital Single Market strategy.

Although the regulation entered into force in all EU Member States on 23 March 2018, it has only been in force since yesterday.

It amends Regulations (EC) 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC.

Within two years of the entry into force of the new rules, the Commission will assess for the first time how they affect the internal market, in particular certain electronic services that contain copyrighted content such as music, e-books, software and online games, as well as services in the fields of transport and audio-visual.

The behavior prohibited by the regulation is almost certainly to be regarded as noticeable within the meaning of the UWG and as a rule of market conduct and can therefore be warned by competitors.

It is forbidden?…

What is now forbidden

• Blocking or restricting the access of customers of another Member State to their own on grounds of nationality, residence or place of establishment of the potential customer
• The transfer of a customer from another Member State to a specific country version on grounds of nationality, residence or place of establishment of the customer, unless the transfer has been expressly agreed.
• The benefits of different sales conditions from the EU
• The benefits of different payment terms.

Except for?

The Regulation does not apply to health services, other social services, financial services and the sale of passenger transport services such as airline tickets, bus tickets, train tickets, etc., but to car rental companies and the like!

The regulation also applies to electronically provided services, unless it concerns the sale of copyrighted items as downloads, such as music, films, e-books or even computer games.

The latter may be questionable, what exactly is with browser games and mobile games, which are offered in advance free of charge, which are protected by copyright, but which do not have to be downloaded afterwards.

There is an exception – still – for video, music and audiobook streaming, but here things are also downloaded.

In the case of pure services, and editorial content, and the like, the exception is unlikely to apply, especially as it is already a very controversial exception and is under special review.

The Regulation also applies without conditions to all other electronic services such as cloud services, hosting, SaaS services of all kinds, domains, search services, referral services, hotel bookings, travel agencies, tickets and what you can think of.

Who does the regulation apply to?

The regulation also applies to companies and platforms outside the EU, otherwise doing business with EU citizens. In this respect, retailers should also pay attention, for example, when using Alibaba and the like, as well as the drop-shipping business.

Private individuals on eBay etc., irrespective of the fact that they are not addressees of the UWG, do not have to worry here either, because the regulation only applies to persons acting commercially. But beware: sometimes you can find yourself acting commercially sooner than you think. This can also apply to the sale of merchandising for your own esports team or the offering of competitions and other goodies as an influencer . This is particularly true because there is an exception for small entrepreneurs, i.e. those who make less than 17,500 euros in turnover per year. However, this exception only applies if you do NOT sell goods, but only offer digital services.

Apps?

As a lawyer for IT law, I represent numerous clients in the field of computer games and apps, and therefore the answer for them is that yes, the regulation also applies to apps. These must, in principle, be made available for use by everyone in Europe. But before the big scare begins: The apps do NOT have to be adapted or even translated for every country.

And otherwise?

European regulations would not make sense if it had not included many other exceptions and exceptions to exceptions and the like. For example, no one has to break national laws when they offer services or goods to all people in Europe. This may be relevant, for example, in the case of questions relating to the protection of minors in the case of computer games.

National law also continues to apply, e.g. for questions of product safety, standard and the like. The aim is to unify the internal market, but not to force suppliers to offer goods in all countries. Therefore, no one is forced to offer their website in all languages or even to adapt terms and conditions for all countries (at least not due to the geo-blocking regulation…). On the contrary, different TERMS and conditions may even be used per country if this is not even necessary for other legal reasons. But that is another legal issue. Likewise, mail order companies can breathe a sigh of relief with regard to shipping costs. While in the future (as in the case of national law) it will be forbidden to charge payment methods, deliveries to other EU countries may have different fees than in the home country. For example, if you offer free shipping in Germany, the dealer does not have to offer this for Spain. However, the fees must again be the same for all EU countries. Exceptions probably apply only to means of payment which do not fall under Section 270a of the German Civil Code (BGB), but this includes, for example, PayPal, due to the reference from sentence 2.

Even smaller retailers can breathe a sigh of relief. Unless they want to, they are now not obliged to suddenly offer Europe-wide shipping if they did not do so before. The prohibition of discrimination applies only in its own supply area, but in accordance with all the above conditions. But beware: Once a delivery area – if only theoretically – expanded, it should also apply to future customers. So here we come to a check of the shop, as mentioned in the next section.

What needs to be checked?

Providers of online shops and other operators of digital services who have not been able to obtain exceptions should check not only operational procedures, in particular the software that is used. Quickly to obvious warnings could lead to redirects based on the IP address, which is often integrated into online shop software by default. The same applies, for example, to national interfaces of scripts or login masks. For example, a registration mask that allows only German telephone numbers, only German Federal Ländlers to choose from and the like, should be quickly noticed and foreboding by a competitor. The exact function of the software would also have to be controlled. Thus, the regulation applies only to the same shop. It is not forbidden to operate several shops in several countries and to offer different prices and conditions there. However, these individual shops must not be blocked for other EU citizens (e.g. because they appear as comparisons in price search engines, etc.) and in the event that, for example, the shop offers a product in Austria at a lower price, this must also apply if a user from Austria Germany there.

Any questions?

Any more questions? Although much remains unclear and it remains to be seen whether a wave of warnings will really roll out after the GDPR amendment, the chances here are very great. In addition, there are many other variations and questions to be clarified if you want to be on the safe side as an operator. A review or consultation is strongly recommended. Just contact me for further questions!

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.