Geo-Blocking Regulation (Revocation) (EU Exit) Regulations 2019
Debate between Baroness Vere of Norbiton and Lord McNally
Baroness Vere of Norbiton (Con)
My Lords, this statutory instrument will revoke EU regulation 2018/302, commonly known as the geo-blocking regulation, and the Geo-Blocking (Enforcement) Regulations 2018 in the event of the UK exiting the EU without a withdrawal agreement. This recognises that, in the event of a no-deal exit from the EU, there would be no way to effectively enforce the geo-blocking regulations on behalf of UK customers.
“Geo-blocking” is the term used to describe traders discriminating against customers on the basis of the nationality or location of the customer. The EU’s geo-blocking regulation prohibits certain forms of geo-blocking. This includes through mandating access to all versions of a website in the EU; preventing discrimination between EU customers when distance shopping, online or otherwise; and preventing discrimination in payment terms accepted.
In practice, the geo-blocking regulation means that a UK consumer who wants to buy a toy train from a German retailer can do so in the same way as a German customer. For example, a German toy retailer cannot redirect a UK customer to the English version of the website without their explicit consent and needs to grant the customer access to all other versions of the website. Moreover, the toy retailer cannot apply different prices for the same product—excluding VAT—or refuse payments with a certain brand of credit card from a UK customer if that brand of credit card is accepted from German customers. The German retailer is not under any obligation to deliver the goods anywhere beyond their existing delivery area. If delivery is not offered to the UK, the UK customer will have to either collect the product from the retailer’s premises or make their own arrangements for onward delivery.
This regulation came into effect on 3 December 2018. The geo-blocking regulation does not apply to copyrighted online content, such as movies, e-books and video games. This would include services such as Netflix and Spotify.
The Geo-Blocking (Enforcement) Regulations 2018 are complementary, and enable the domestic enforcement of the geo-blocking regulation, giving powers to certain regulators and acknowledging the right of consumers to bring claims directly against infringing traders. These regulations came into force on 3 December 2018, the same day that the other geo-blocking regulation came into effect. In the event of a no-deal exit from the EU, the geo-blocking regulation will be transposed directly into UK law under the European Union (Withdrawal) Act 2018 as retained EU law. The Geo-Blocking (Enforcement) Regulations 2018 will also continue to have effect, unless revoked.
It is necessary to revoke both these pieces of legislation, as it will not be possible to effectively enforce the geo-blocking regulation on behalf of UK customers after a no-deal exit from the EU. This is because EU regulators would no longer be obliged to bring actions against businesses through EU mechanisms for cross border co-operation, UK civil and commercial judgments would no longer be automatically enforced in EU member state courts, and the UK Government cannot unilaterally enforce the geo-blocking regulations across the EU.
It is not possible to replicate the benefits of the geo-blocking regulation for UK customers in domestic law. The provisions of the regulation do not apply to transactions occurring solely within one country. Therefore, there is no benefit to UK customers in retaining a version of the geo-blocking regulation which applies only to the UK. Furthermore, if we do not revoke the geo-blocking regulation, it would result in a competitive disadvantage for UK traders. They would have to continue giving EU customers preferential treatment, while EU traders would not need to do the same for UK customers. For example, without revoking the regulation, in a no-deal scenario a UK theme park would continue to be obliged to offer the same prices and conditions to both a French family and a British family. However, even if we retain the regulation, a French theme park would be able to apply discriminatory practices—in terms of pricing, for example—between a French family and a British family. To avoid this asymmetry in the EU’s favour, we propose revoking the geo-blocking regulation in the UK.
The effect of this statutory instrument is simple—the retained EU law version of the geo-blocking regulation and the Geo-Blocking (Enforcement) Regulations 2018 will be revoked in the event of a no-deal exit from the EU. The substantive rules contained within the regulation will no longer have effect in the UK after that regulation is revoked.
It is important to note that this legislation will continue to operate in the EU. As such, UK businesses operating in EU markets will still have to comply with the EU regulation when dealing with EU consumers. This means, for example, that a UK trader will have to offer the same conditions for customers in the Netherlands and Spain. However, the UK trader will be able to offer different conditions to UK customers.
The Geo-Blocking (Enforcement) Regulations 2018 made changes to the Enterprise Act 2002 to allow for the domestic enforcement of the Geo-Blocking Regulation. This SI does not undo the changes made to Schedule 13 to the Enterprise Act 2002 by the Geo-Blocking (Enforcement) Regulations 2018. These changes were already undone by a separate statutory instrument; namely, the Consumer Protection (Enforcement) (Amendment etc.) (EU Exit) Regulations 2019. These regulations were debated and approved by your Lordships’ House on 15 January 2019, and were made on 6 February 2019.
It is important to highlight that failure to revoke the geo-blocking regulation and the Geo-Blocking (Enforcement) Regulations 2018 would not preserve UK customers’ rights. Those rights will, in effect, be lost if the UK leaves the EU without a deal. The only effect would be to continue to impose obligations on UK traders, while providing no benefit to UK customers.
The subject matter of this statutory instrument is partially devolved in Scotland, Wales and Northern Ireland. It has been consented to by the Welsh and Scottish Administrations. The Northern Ireland Civil Service was notified in line with the protocol agreement in place during the absence of the Northern Ireland Executive. I take this opportunity to warmly thank the devolved Administrations and the Northern Ireland Civil Service for their ongoing co-operation.
I beg to move.
Lord McNally (LD)
My Lords, as this is the last item of business it would be very easy to nod it through. However, in the debate on the previous SI, the noble Lord, Lord Deben, made the point that this House is playing a very important part in what he described as the Alice in Wonderland situation of Parliament legislating on Monday to prevent a no-deal Brexit, and then on Tuesday legislating to avoid the worst consequences of a no-deal Brexit. It is important that these statutory instruments are probed. They may seem to be simply belt-and-braces exercises, and the Minister delivers her arguments with such an upbeat lilt that you think there cannot be any problems, but it is worth probing a little deeper and showing the absolute absurdity and danger of what is proposed.
Let us remember that this is part of a great creation of the European Union: the single market and its operation. That single-market concept was the great work of Lord Cockfield, actively supported by Mrs Thatcher, in the 1980s. It was one of the great pieces in the puzzle of creating the European Union. Yet, as the Minister explained in her positive manner, no benefits are forthcoming from this SI—or from any of them. We are doing an exercise in damage limitation.
The Minister clearly explained what geo-blocking means. It is,
“the term used to describe traders discriminating against customers on the basis of the nationality or location of the customer”.
That is the very heart of the single market. She was fair in frankly pointing out—as did the Minister in the other place, Kelly Tolhurst—that, so far as the consumer is concerned, by leaving the European Union we move out of the protections which this legislation provided, and that:
“UK businesses operating in EU markets will still have to comply with the EU regulation when dealing with EU consumers … A failure to revoke the geo-blocking regulation and the Geo-Blocking (Enforcement) Regulations 2018 would not preserve UK customers’ consumer rights. Those rights will in effect be lost if the UK leaves the EU without a deal. The only effect would be to continue to impose obligations on UK traders while providing no benefit to UK customers”.—[Official Report, Commons, 2/4/19; col. 977.]
It is lose, lose, lose. In short, EU traders would not have any obligations to treat UK customers in line with the geo-blocking regulation.
As the Minister also explained, this regulation does not require a company to deliver a physical product to all EU locations. It also exempts digital copyrighted content, including e-books, computer games and streaming services such as Netflix, and audio-visual content and transport services. However, the EU is obliged to assess whether to lift these exemptions in 2020. This is a perfect example of the lunacy of Brexit. We are moving into a data revolution—an age of e-commerce. Yet we are now stepping back; we will not be at the table when the EU sets the standards in these areas. We will again be left, as the noble Lord, Lord Deben, rightly put in another context, waiting, watching and listening for what others decide.