Geoblocking is referred to when customers are prevented from accessing the website of a provider from another EU country or from purchasing his goods under the same general terms and conditions as national customers. For example, if the website collects the IP address, the current location of the customer can be determined. The online merchant now knows from which country the customer wants to access the site and can redirect him to a country-specific shop. This makes it possible to display a completely different assortment or to mark an article as not available.
The Geoblocking Regulation (EU) 2018/302, which came into force on 3 December 2018, put an end to these practices for EU countries as well as Iceland, Norway and Liechtenstein. Its aim is to give EU citizens better access to goods and services offered online and to provide legal certainty for entrepreneurs. The geoblocking regulation is part of the EU strategy to strengthen the digital single market.
In Germany, the Federal Network Agency is monitoring the implementation of the regulation and in February 2020, it drew an interim conclusion after the first months of the new legislation. Around 100 complaints were received, half of which concerned sales of goods such as electrical appliances, clothing and e-books. Two thirds of the justified complaints were resolved in cooperation with the suppliers and a solution was found without further action. Otherwise the Federal Network Agency can impose fines of up to 300,000 euros.
However, online retailers in the EU can still define for themselves to which countries they deliver their products. Many consumers see this as a disadvantage, because although they can purchase the goods under the same general terms and conditions as national customers, the retailer may still not offer delivery to the desired country. For many retailers, VAT is a major hurdle in cross-border e-commerce: The applicable tax rates must be known and the gross sales price must be correctly calculated and displayed in the shop. In addition, the VAT registration in the country of destination and the payment of the tax to the national authorities are also necessary. The EU plans to further simplify taxation in Europe. A proposal from the Commission is to be presented by 2022.
ClearVAT helps online traders to sell their goods in all EU countries in a legally compliant manner. ClearVAT assumes the assignment of national tax rates and exemptions to the articles purchased online, as well as tax collection and reporting to the local tax authorities, without the trader having to register in the country of delivery. This provides fast access to the European Single Market.