1. Agenda planning and Work Programme References The Agenda Planning Reference is 2016/CNECT+/002.
The initiative to ban unjustified geo-blocking forms part of the Digital Single Market Strategy, adopted in May 2015, as well as part of the Single Market Strategy, adopted in October 2015.
2. Inter-Service Steering Group
An Inter-Service Steering Group was set up in 2015. In total, six meetings were organised: on 17 July 2015, on 14 December 2015, on 11 February 2016, on 1 March 2016, on 1 April and on 14 April 2016. The following directorates and services were consulted: CNECT, COMP, GROW, JUST, TAXUD, MOVE, SJ, SG, JRC, ENV, REGIO, AGRI, EMPL, EAC, FISMA, NEAR, TRADE, HOME and DIGIT. The feedback received from these directorates and services has been taken into account in the report.
The ISSG approved the Inception Impact Assessment that was published on 18 December 2015.
The minutes of the meeting of 1 March 2016 were submitted to the Regulatory Scrutiny Board.
3. Consultation of the Regulatory Scrutiny Board
The Impact Assessment Report was examined by the Regulatory Scrutiny Board on 6 April 2016. The RSB issued its opinion on 8 April, requesting a set of revisions. The revised impact assessment was submitted on 15 April 2016. On 21 April 2016, the Board gave an overall positive opinion and provided further suggestions for improvement, which were implemented. The present impact assessment includes these further improvements (see appendix).
4. Studies to support the Impact Assessment
Two studies were launched specifically for this impact assessment.
Firstly, a Mystery Shopping Survey on approximatively 10 500 websites assessed cross border within the EU was carried out between October and December 2015. For details, see annex 6.
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The full study can be found at: http://ec.europa.eu/justice/newsroom/consumer- marketing/news/160318_en.htm
Secondly, in February 2016 a Flash Eurobarometer was carried out to determine the extent of geo-blocking which business as end-users face. For details, see annex 10.
The full study can be found at forthcoming
In addition to these two specific studies, there exist a number of other recent studies relevant for the extent of geo-blocking and discrimination based on residence or nationality within the European Union. An overview of the evidence can be found in annex 5.
Finally, for the economic model described in annex 4, the European Commission acquired a data set with nearly 2 million observations of monthly online and offline sales volumes and prices for more than 100 000 models of 4 types of electronic goods in 10 EU Member States 2012-2015 from a data provider.
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Appendix - RSB requests for improvements and revisions introduced by services
Subject area RSB comments Revisions introduced
(1) Further clarify the scope of the initiative.
The rationale for the extension of the scope to the transport sector should be further elaborated in the report, clarifying what is the underlying problem and explaining why this cannot be addressed by the sectoral transport legislation currently in place that already prohibits discrimination (except for railways).
Sections 1, 2.6, 3.1, 5.0, 5.3, 6.4, 7.2
The extension to the transport sector has been abandoned
(2) Enhance the definition of the problem
The problems related to the ineffectiveness of Article 20(2) of the Services Directive should be further explained in the main report, rather than only in Annex 8.
Section 2.3.2.2
The text explaining the ineffectiveness of Article 20 of the Services Directive has been further developed under "Ineffective enforcement of the existing legal framework".
The studies used for illustrating the existence of the problem should be quoted with caution and the results should be qualified. For instance, the apparent high demand for arranging cross-border part of the delivery of products by the online buyers (with 32% of consumers ready to do so) is misleading as only 12% of the surveyed online buyers in these countries used freight forwarding due to the reason that the seller did not ship to their country (which may have been true for non-EU countries as well).
Sections 2.2.1 and 6.4
The references to the studies have been adjusted to better express inherent uncertainties. For the example, multiple motivations have been acknowledged.
(3) Better define the options and analyse their impacts
The report should clarify whether or not microenterprises are excluded from the initiative
Sections 5.3, 6.4 and 7.1
The square brackets have been removed. Micro-companies are included in the initiative, but transparency requirements have been significantly reduced.
The executive summary and conclusions from the impact analysis should be more nuanced and qualified in order to reflect the uncertainties surrounding: the estimations of the magnitude of unjustified geo-blocking; the fact that the baseline will be affected by the effectiveness of
Sections 6.4, 7.1, 7.2 and executive summary
The relation between unjustified geoblocking and total geoblocking has been reinforced, and the importance of other policy initiatives has been strengthened.
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related regulatory initiatives that would reduce the main incentives for geo-blocking; and the possibility for the identified negative impacts to be larger than expected. For example, VAT arbitrage is explicitly referred to, but not seen as opening the door to VAT circumvention practices (p. 44).
Section 6.4
The possibility of increased VAT arbitrage has been expressed more clearly. The possible negative impacts in some Member States
(such as employment effects related to the reduction in off-line shopping in the option of "shopping like a local") should be mentioned
Section 6.4
The possible negative impact has been acknowledged.
(4) Legal certainty and coherence with EU policy instruments
Interactions with other EU regulatory instruments and initiatives will need to be specified. For instance, passive sales restrictions in vertical agreements are mentioned as possible cases of unjustified geo-blocking, but are not clearly part of the scope of the impact assessment (p. 23). It should be clarified whether the envisaged Regulation will include or not such restrictions in its scope.
Sections 1 and 5.3
The interaction with EU competition law, especially regarding to vertical restraints, has been clarified.
Option 3 on "shopping like a local" but might raise compliance issues and the applicability of Rome I is made clear for services but not for tangible goods (p. 39).
Sections 5.3 and 6.4
The causation between a trader directing its activities to a Member State and the applicable law has been clarified.
(5) Monitoring and evaluation.
The indicators chosen refer to geo-blocking in general without trying to better measure the scope and the trends in “unjustified” geo-blocking.
Section 8
The indicators have been refined to better capture unjustified geoblocking. The report should consistently describe the inclusion of
Article 20(2) of the Services Directive in the revised Annex of the Consumer Protection Cooperation Regulation as part of the package of the DSM proposals and, thus, part of the baseline scenario.
Section 2.3.2.2.
A description of the inclusion of Article 20 in the Annex of the CPC Regulation has been added. It is already explained in the baseline scenario under section 5.0.
Annex 1 should briefly explain how the Board's
recommendations have led to changes compared to the earlier draft
Annex 1 - section 3
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(6) Procedure and presentation
Annex 3 should be updated in line with the changes in the main report, in particular regarding the practical
implications of the preferred option on businesses
Annex 3 – all sections
The implications of selling locally to a resident in another Member states have been clarified.
The report (including the executive summary) should be proofread for the use of correct terminology, spelling mistakes, redundant words and inconsistencies.
on-going
The operational objective should rather measure the decrease and not the increase of "the share of websites blocking access to users from other EU Member States"
Section 8
The mistake has been corrected. options that are not the preferred option are not being
"discarded", but are simply less effective or efficient
Section 5.6
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