The European Commission has published the preliminary results of its online commerce sector inquiry. Conclusion: agreements between distributors and suppliers by which the online sales of the distributors are geographically restricted raise competition law concerns. A similar investigation is currently ongoing in Romania.
Geo-blocking limits the rights of distributors to sell abroad and / or outside the geographical territory set by the supplier.
The European Commission identified the fact that geo-blocking is agreed contractually or verbally / informally and entails technical barriers which restrict consumers from buying online from outside the state / geographic territory allocated by the supplier.
Replies from more than 1,400 sellers from across all 28 European Union Member States show that they frequently use geo-blocking for consumer goods or digital content.
Examples of geo-blocking are refusal to accept foreign payment methods, re-routing and website access blocks.
If geo-blocking is the result of an agreement between distributors and suppliers, such agreements can restrict competition and must be analysed in detail from the perspective of the effects they produce.
The European Commission’s preliminary results may be considered an alarm bell regarding the sensitive competition aspects identified. In Romania, the Competition Council is expected to communicate a similar conclusion, as the authority is currently running its own online commerce sector inquiry.
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