Documents considered by the Committee on 5 September 2018 Contents

21Geo-blocking

Committee’s assessment

Legally and politically important

Committee’s decision

Cleared from scrutiny

Document details

Proposal for a Regulation on addressing geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market

Legal base

Article 114 TFEU; ordinary legislative procedure; QMV

Department

Business, Energy and Industrial Strategy

Document Number

(37818), 9611/16 + ADDs 1–2, COM(16) 289

Summary and Committee’s conclusions

21.1The Geo-Blocking Regulation (2018/302) was adopted by the General Affairs Council on 27 February 2018 and entered into the Official Journal of the European Union on 2 March 2018.156 The Committee had previously granted the Government a scrutiny waiver to support the proposal at Council.157

21.2Although the legislative procedure for this proposal has now concluded, the Committee has retained this proposal under scrutiny pending answers to a number of questions about the implications of EU exit with respect to geo-blocking. In its last report,158 the Committee specifically sought further information from the Government about:

21.3In a letter to the Committee, the Parliamentary Under Secretary of State at the Department of Business, Energy and Industrial Strategy (Lord Henley)159 has responded to the Committee’s questions in detail. The European Commission has also produced a notice to stakeholders which covers the impacts on UK consumers more explicitly than the Government has been willing to, in its responses to the Committee.160 The key points of both the Minister’s response and the Commission’s notice are highlighted in our conclusions below.

21.4We have taken note of the Minister’s response to our questions.

Geo-blocking implications of EU exit for UK businesses selling to the EU

21.5In terms of the implications of EU exit for UK businesses targeting consumers in the EU, we note the Minister’s assessment that, in the absence of any UK-EU agreement on geo-blocking, when the UK ceases to participate in the regulation as an EU Member State, although “the Geo-blocking Regulation’s core provisions would continue to apply to UK-based businesses trading with EU consumers in the EU in the same manner as they will continue to apply to EU Member States”, this would only be on an intra-EU basis, meaning that “UK businesses trading with EU consumers in the EU will not be obliged to offer the same terms of access as they do to UK customers [but] will be required to provide all EU customers with the same terms of access, so that UK firms are not practising geo-blocking within the EU”. To illustrate the practical effects of this, the Minister states that “UK businesses will not be prohibited from rerouting EU customers to a single EU-facing website/interface”.

21.6In effect, the extent to which UK businesses will be constrained to comply with the regulation will be limited to the intra-EU aspect of their operations: i.e., they will no longer be permitted to use geo-blocking to discriminate between consumers from different EU member states where this is prohibited by the regulation, but will be permitted to use geo-blocking to differentiate between UK and EU consumers in ways prohibited by the regulation.

Geo-blocking implications of EU exit for UK businesses and consumers making purchases from the EU

21.7However, this also means that EU businesses will no longer be bound by the regulation’s provisions with respect to UK consumers, which will effectively negate the benefits of the Directive for this group. These effects are clarified in the European Commission’s notice to stakeholders on geo-blocking161 which states that natural persons residing in the UK (unless they are EU nationals) will not benefit from any of the three principal measures in the regulation which protect consumers:

Converting the regulation into UK law

21.8We also sought clarification as to whether, given that the EU regulation has extra-territorial effect (applying to businesses established in third countries), the UK could impose equivalent requirements on the EU, thus retaining its benefits. We note the Minister’s response that “The UK could in principle take steps to impose requirements equivalent to those of the Geo-Blocking Regulation on traders based in third countries (including those from EU countries) operating within the UK”. However, based on the Minister’s previous clarification (above) that the EU regulation merely constrains businesses in third countries targeting EU consumers from practicing the prohibited activities on an intra-EU basis, we conclude that the effect of the UK imposing equivalent geo-blocking restrictions through UK law would be limited to prohibiting businesses in other countries from using geo-blocking to internally segment the UK market. Our initial assessment is that such an approach would be significantly less effective than participating in an EU-wide regulation as the effects would be confined to the UK market, which is at once more integrated and less diverse (in terms of products, prices and contractual arrangements) than the larger, less integrated EU market. In summary, converting the geo-blocking regulation into UK law will not make it possible for UK businesses and consumers to retain its principal benefits.

21.9As to whether the Government intends to seek the inclusion of provisions on geo-blocking in the future partnership, we infer from the 12 July 2018 White PaperThe future relationship between the United Kingdom and the European Union”, in which the Government reiterates its intention “not to be a part of the EU’s Digital Single Market”, and from the short section on Digital trade and e-commerce, that the Government does not seek new arrangements UK-EU on geo-blocking. As such, we anticipate that the return of practices prohibited by the geo-blocking regulation will be one of the forms that reduced reciprocal UK-EU market access takes in the digital sector.

21.10As this legislative procedure has concluded, and we have now concluded our scrutiny of the implications of EU exit for geo-blocking, we now clear this document from scrutiny.

Full details of the documents

Proposal for a Regulation on addressing geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market: (37818), 9611/16 + ADDs 1–2, COM(16) 289.

Previous Committee Reports

Ninth Report HC 301–ix (2017—19) chapter 2 (10 January 2018); Second Report HC 301–ii (2017–19), chapter 6 (22 November 2017); Twenty-eighth Report HC 71–xxvi (2016–17), chapter 1 (25 January 2017); Nineteenth Report HC 71–xvii (2016–17), chapter 2 https://publications.parliament.uk/pa/cm201617/cmselect/cmeuleg/71–xvii/7105.htm(23 November 2016); Seventh Report HC 71–v (2016–17), chapter 3 (6 July 2016).


156 OJ L 60I , 2.3.2018 Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market.

157 A scrutiny waiver was granted in the Committee’s report of 22 November 2017 and renewed in its report of 10 January 2018.

158 Ninth Report HC 301–ix (2017–19) chapter 2 (10 January 2018).

159 Letter from the Minister (BEIS) to the Chair of the European Scrutiny Committee (14 February 2018).

160 European Commission, Notice to Stakeholders: Withdrawal of the United Kingdom and EU Legislation in the field of Geo-Blocking (21 March 2018).

161 European Commission, Notice to Stakeholders: Withdrawal of the United Kingdom and EU Legislation in the field of Geo-Blocking (21 March 2018).




Published: 11 September 2018