“Apologies, not available in your country!” is a frequent experience for Maltese consumers. An E-commerce Europe barometer shows that two in three cross-border shopping attempts in the EU fail due to restrictions or re-routing of customers based on discrimination on grounds of nationality or residence. On the business side, European Commission findings reveal that while 65 per cent of consumers buy online, only 16 per cent of SMEs sell online and only 7.5 per cent of SMEs sell online across borders.
This phenomenon of geo-blocking was discussed recently in a stakeholders’ dialogue with MEP Therese Comodini Cachia organised by the Malta Business Bureau and the European Parliament Information Office.
The discussion included the participation of Erwan Bertrand from Eurochambres, Greta Agius, presently leading negotiations on the issue on behalf of the Maltese EU presidency, and representatives from business and consumer organisations.
MBB CEO Joe Tanti introduced the debate by highlighting the need to include Maltese stakeholders in discussions with decision-makers with a view to shaping European Union law, which needs to reflect the particular situations in the different Member States including Malta.
The discussion takes place while the European Parliament and the Council are negotiating new legislation to address geo-blocking and prohibit restrictions by traders and re-routing practices online. However, the Commission proposal, while meant to lead to a wider consumer choice, is not without problems to businesses.
Mr Bertrand in fact expressed the concern of European businesses as to the effectiveness of the proposed Commission measures in widening cross-border trade. Mr Bertrand points out that while Union legislation may try to prohibit certain commercial practices, a series of other limitations remain, including different technical requirements, language barriers and transport costs.
These point to the very shortcomings of the Single Market today, according to Mr Bertrand. “We would have preferred not to need any proposal on geo-blocking, as this is a symptom of a still highly incomplete Single Market,” he said.
Dr Comodini Cachia, rapporteur on the copyright directive, presented her role in the European Parliament in relation to the e-commerce package and the ongoing negotiations in the European Parliament. The MEP stressed that any legislative intervention should remain proportionate, in particular for SMEs, which should not be subject to an obligation to sell in other Member States.
The MEP also pointed out that while we need to unblock the internet’s potential in Europe, in Malta we need to take a closer look at the inherent inhibitions of companies to go online especially the prohibitive transport costs for these to offer their goods and service abroad. “Within the Maltese scenario I see a number of local traders trying to take the digital plunge but they face steep barriers among which postal costs. We need to help them address these barriers which are limiting their power to compete online,” she said.
The session included a round table with stakeholders representing Maltese businesses, which pointed out the need to keep in mind the burden of new rules on small business. Chamber of Commerce representative Andre Fenech pointed out that disproportionate regulation might have the counter effect of pushing companies to go offline to avoid claims from consumers abroad.
Phyllis Bezzina from the European Consumer Centre pointed out that consumers in Malta encounter a lot of discrimination including the blocking of access to websites and re-routing to other websites. Ms Bezzina said that often the justification provided by suppliers is very unconvincing and calls for clearer rules in this regard.
Representatives of the Malta Competition and Consumer Affairs Authority pointed out the need of a fair balance between trader and consumer, as well as to the critical role of enforcement of existing rules.
The discussion also saw interventions by representatives by the GRTU, Malta IT Law Association, GVZH Advocates, MEUSAC and the Malta Communications Authority.