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Behind the Scenes

EU Reg Would Ban Retail Companies From Using Geo-Tracking In Online Shopping

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EU Reg Would Ban Retail Companies From Using Geo-Tracking In Online Shopping

Under a proposed EU regulation, online retail companies in Europe may no longer be able to use geo-tracking in online shopping. The European Commission released a draft regulation on May 25, 2016 that proposes the removal of geo-blocking for online shopping, stating that it wants to ensure that consumers seeking to buy products and services in an EU country, be it online or in person, are not discriminated against in terms of access to prices, sales, or payment conditions.
 
The proposed regulation would ban online retailers from declining online orders based on the shopper’s country of origin. Currently, online shoppers can be blocked from accessing offers in other countries and are often rerouted to their country-specific website, or asked to pay with a debit or credit card from a certain country. Companies would be banned from redirecting online shoppers to their local websites without their consent, under the proposed regulation. The Commission contrasts the current online shopping practice against the traditional in-person shopping experience, noting that consumers physically entering EU stores today are not asked by store owners for their IDs for the purpose of accepting a purchase or adjusting prices or sale conditions.
 
The proposed regulation is intended to address unjustified geo-blocking and shopping discrimination on the grounds of nationality, residence, or establishment. The principle of non-discrimination is weaved throughout EU law and this proposed regulation would serve as the regulators’ “stick” to prompt retailers to work towards uniform sales practices both online and offline. If passed, it could upset the sales and marketing practices of online retailers in Europe that use geo-tracking to determine the location of its consumers, set pricing, and tailor deals.
 
Arent Fox’s E-Commerce and Advertising group monitors regulatory trends and developments in this space. For more information, please do not hesitate to contact Anthony V. Lupo, Sarah L. Bruno, and Lourdes M. Turrecha.

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