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4 Steps to Fully Understand Geoblocking

The EU is trying to address and prevent unjustified discrimination regarding online sales occurring from the enforcement of geoblocking. This means that your business may lose revenue if you don't have a microsite.

Kevin Faulkner - Marketing Executive Written by Kevin Faulkner - Marketing Executive 3 Sep 2019 in B2B eCommerce

If you’re an online shopper, the chances are that you have been geo-blocked on more than one occasion. 

 

Perhaps you didn’t know why you couldn’t purchase the desired product and you left the site in frustration? 

 

Geoblocking is very likely to have happened to most of us and it is something that every online shopper needs to know about.

 

 

1. What is geoblocking?

Geoblocking is a process that limits a users access to website content based on their physical location. 

 

Simply put, it means that if someone located in Ireland is trying to access a US-based eCommerce site in order to purchase a product or service, they may be blocked from seeing the sites’ content if geoblocking applies. It follows a crackdown on cross border online shopping.

 

This process is usually implemented by multinational tech giants, telecommunications companies, eCommerce websites, and other web content providers. Such companies often use databases that map a user’s IP address, and consequently their physical location, and enforce geo-blocks.

 

What geoblocking does:

  1. Prevents users (in different countries) from purchasing products, services, or digital content offered on a website or app;
  2. Limits access to online stores or webshops;
  3. Re-directs users to country-specific website domains that possibly contains different pricing;
  4. Can refuse to accept delivery or payment from certain locations.

 

2. What is Geoblocking regulation?

The geoblocking regulation is a European regulation that came into effect on March 22nd, 2018. However, it was applied on December 3rd, 2018 in order to give small traders adequate time to prepare and adapt to this new regulation.

This regulation has one main objective in mind. It aims to address all forms of discrimination regarding online sales. 

This discrimination is often found in any of the following 3 cases based on a consumer’s:

  1. Nationality
  2. Place of residence
  3. Place of establishment within the internal market

 

As with every rule and regulation, there are 3 specific cases when there can be no justified reasons for geoblocking or other discrimination reasons as listed below:

  1. The sale of goods without physical delivery. For instance, a French customer wishes to buy a car and finds a great deal on a German website. The client is entitled to order the car and collect it himself or arrange a delivery himself to his home.
  2. The sale of electronically supplied services. For instance, a UK consumer wishes to buy eCommerce solution services for his company from an Irish company such as Aphix Software, who provide integrated eCommerce solutions. Unlike an Irish consumer, he will have access to the service and be able to buy it without having to pay additional fees.  
  3. The sale of a service which is provided in a specific physical location. For instance, an Irish couple visits a UK movie theatre and wishes to avail of a discount on the price of the entry tickets. This discounted price will be available for the Irish couple.

 

 

3. Why is Geoblocking used?

Geoblocking is used to restrict access to the content of a website based on your location in the world. Basically, geoblocking is a strategy that was devised and far too often used by (and to the benefit of) multinational companies and more often tech giants. 

 

Such companies use geoblocking to set different prices for their products in different countries around the world, using copyright and licensing restrictions. 

 

As frustrating as it may be, geoblocking is found everywhere and people who fall under this regulation may have to pay higher prices for desired products based on their IP address. 

 

As if that is not enough, some online media streaming services also segment the world, giving access to their content to only those with a certain IP address such as BBC iPlayer content being restricted to UK residents only.

 

4. Is Geoblocking legal?

There are always ways in which one can either bypass or go around certain rules or regulations. Likewise, people can bypass geoblocking. However, by doing so, it puts them somewhere in a grey area. 

 

Copyright experts and companies who may benefit from the enforcement of geoblocking will most definitely claim that bypassing geoblocking means breaking the law. Others believe that consumers who bypass blocked content based on their geographical location should be exempt because they are only accessing products or services that the copyright holder is providing knowingly and willingly.

 

 

Conclusion

In any case, geoblocking is a topic that every online shopper and every eCommerce company that sells either products or services should know about. 

In order to stop unjustified geoblocking, the EU's goal is to prevent website owners from applying geoblocking and location-based pricing and redirecting consumers to the relevant site for their country. 

This means that if you don’t have a microsite with the desired pricing for each country you wish to do business in, will result in loss of revenue, which you undoubtedly don’t want.

 

That leads us to one conclusion, having an eCommerce site is not easy and that’s the way it is. However, losing customers just because they are in a different geographical location shouldn’t and must not result in loss of revenue. That is why we can help you win more customers cross-border online sales with our Microsites. 

 

To find out more about microsites, check out the Aphix WebShop and other ERP integrated eCommerce solutions or get in touch and let us help you reach new markets and scale your business in multiple locations online.
 
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