A European Consumer’s Centres report launched on December 14 in Ireland shows that despite EU legislation prohibiting discrimination based on nationality and place of residence, business practices such as geo-blocking are still preventing consumers from accessing services when shopping online.

The European Consumer Centre Network’s (ECC-Net) report, entitled ‘Do invisible borders Still Restrict Consumer Access to Services in the EU?, is an analysis of cases featuring different treatment of customers across Europe, potentially relevant pursuant to Article 20.2 of the Services Directive, which outlines the principle of non-discrimination on the basis of nationality and place of residence.

Consumers continue to face restrictions and are confronted with refusal to deliver

The report found that consumers continue to face restrictions and are regularly confronted with refusal to deliver or higher prices based on their nationality or place of residence. The complaints show that some traders have created artificial barriers, with the reasons given for the restrictions applied often unjustified. The report is the result of a joint project to investigate the work of ECC-Net under the Services Directive and the main problems encountered by consumers.

It has been acknowledged at EU level that further action is necessary to give effect to the principle of non-discrimination and develop rules against discrimination based on nationality or place of residence of consumers. One can mention the Digital Single Market and the Single Market Strategy initiatives, as well as the Commission’s adoption of the eCommerce package, which is a major step forward in tackling geo-blocking, making cross-border parcel delivery more affordable and efficient and promoting consumer trust through better protection and enforcement.

The report found that:

• Between January 2013 and December 2015, ECC-Net received 532 Article 20.2 related complaints. This represents an increase of 140 per cent in respect of the 222 complaints of this nature reported to ECC-Net between 2010 and 2012.

• The largest number of Article 20.2 related complaints originated from consumers based in Austria (138), Italy (68) and Ireland (66).

• More than 82 per cent of cases reported related to consumers’ residence rather than nationality and took place mostly in relation to online transactions.

Nearly 68 per cent of complaints concerned consumers who faced price or service differentiation – mostly with the purchase of goods such as electronic, household appliances, vehicles, clothes, books, music or data downloads.

Almost a quarter of cases were in relation to the provision of services in the fields of tourism and leisure, including those provided by travel agencies, accommodation pro­viders or amusement parks.

More than five per cent of cases were in the rental and leasing services sector.

Traders that carried out service and price restrictions/differentiation based on consumers’ nationality or place of residence did so by: blocking access to websites, automatic re-routing to another website, refusing delivery or payment or applying different prices or sales conditions.

A case study involving a consumer resident in Malta was about the consumer placing an order online for a laptop with a UK-based trader. The consumer provided a UK address for delivery. After the payment was based using his credit card, the consumer received a message stating that the transaction could not be completed “either due to us being unable to verify all of your information or that there was an error in processing your order”. The consumer attempted to pay for the order by bank transfer but did not succeed. The company stated that in order to avoid cases of fraud they only accept credit cards issued by banks within the UK.

This case study shows one of the reasons invoked by traders which pertain to the additional risks involved when doing business in another Member State other than the Member State of establishment of the business, such as securing payment from consumers resident in other Member States or verifying consumer’s solvency before concluding a contract.

Other case studies:

• An Italian consumer attempted to book a holiday in Italy via a website operated by a trader based in Germany. The consumer was required to provide an address in Germany and hence was unable to complete the online booking.

• An Irish consumer participated in a half marathon organised by a trader based in the UK. The consumer was charged more as an overseas participant, as opposed to the price available for residents from the UK.

Further information about this report can be found on the ECC Malta website at www.eccnetmalta.gov.mt.

This informtion has been provided by the European Consumer Centre Malta. ECC Malta is part of the European Consumer Centres Network. The network is financed by the European Commission and the EU Member States and consitis of 30 centres in the 28 Member States, Norway and Iceland.

The aim of the network is to increase consumer confidence in the internal market by providing information on cross-border transactions and assisting consumers who have experienced problems with such purchases.

ECC Malta is hosted by the Malta Competition and Consumer Affairs Authority.

Odette Vella is director, Information, Education and Research Directorate, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.

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