Heads up webshops, new EU regulation coming up!

GDPR was included in most IT news from 2016 until the end of H1 2018. But just like for Y2K back in the days, there was very little written about it after the deadline, which was on May 25th 2018 for GDPR. (It is ok if you don’t know the deadline for Y2K.) Data processing agreements for GDPR are still being made as far from all got them concluded before May 25th, but these will be completed in time and all will be well again. Or will it? Perhaps there is some new EU directive coming up that will again raise a lot of questions and uncertainty. There are naturally several EU regulations and directives coming up every year, but nothing as dramatic as GDPR (2016/679) has been detected so far. This should be good news to all still recovering from a very busy H1 due to GDPR.

Improving consumer rights in online shops

The only new regulation that has come up in my discussions with our clients is 2018/302, a regulation improving consumers’ rights in online shops. The regulation will be enforced starting December 3rd 2018. This is central for us at Wunder too, as we are the provider of several open-source webshops with customers in multiple countries.

Some companies have not reached compliance with the previous directive on consumer rights in eCommerce: 2011/83, even though that one has been enforced since 2014. Or when did you last see article 8-2 fully respected, and a label on the checkout button in an online store saying “order with obligation to pay”? That is a direct quote from an example in the legislation. If the obligation to pay is not expressed clearly enough exactly where the order is approved, the customer is not bound by the contract and basically does not have to pay the trader.

Regulation 2018/302 in a nutshell

The objective of this the new regulation is to remove possible different treatments of customers from different countries. The legislation uses the words “Discrimination Based on Customers’ Nationality” which means that we could name this regulation DBCN, just like that other one was GDPR for General Data Protection Regulation. The high-level goal for this regulation is that an online webshop in the EU has to offer the same services to customers in all targeted countries.

The hottest articles of DBCN

GDPR was all about which article stated what and DBCN is the same. Then again, GDPR is 99 articles while DBCN only has 11. Here are the most central ones for Wunder and its clients with internet shops.

Article 3. states that ‘a trader shall not block access to an online interface based on nationality’. This means that everybody should be able to access the same pages in an online shop, especially the same pages as what is available to people in the webshop’s native country. The traders must request consent from the customers if they wish to automatically redirect them to another country’s webshop, or alternatively communicate a valid and legal reason for it.

Article 4. states that ‘a trader shall not apply access to different goods or services based on nationality’. Online shops thereby have to offer the same products to all of its customers no matter which country they live in. One would assume that this regulation would additionally require the same pricing for all EU citizens, but this is not the case as discussed further below.

Article 5. states that the payment options need to be the same for all EU nationalities. This may seem obvious, but by remembering the lack of credit card payment options in German and Austrian physical shops back when I travelled there more frequently, I guess this would make a difference in some parts of the EU.

The pricing issue

Let us get back to the somewhat unclear topic about pricing as promised above. One would think that equal pricing for customers from all countries would be a cornerstone of this regulation, but surprisingly this is not the case. Then how is it possible to set a different price for different countries considering all that above? If I got this correctly, it seems like the solution goes as follows:

• A trader can have different pricing for the same goods or services in online stores for different countries.
• But as article 3. states, you cannot deny access to the website of another country, nor automatically redirect visitors from other countries.

An example of this could be that the Finnish Ikea online shop (ikea.fi) would have higher pricing than the native Swedish one (I assume the pricing is about the same in reality). I would then have the right to go to the Swedish webshop (ikea.se) and buy my furniture for the more affordable Swedish price. Still, the Swedish webshop would not have to offer shipping to Finland. If I wanted my furniture at Swedish prices, I would have to transport it home from Sweden myself. For digital products and services transportation is not an issue and more equal pricing is to be expected.

Limitations of DBCN – the disclaimers

Being an EU regulation, this applies only to EU countries and people living in them. Also, online shops can still choose only to operate only in certain countries but not all. And if the shop only operates inside its native country, this whole regulation does not apply at all.

Taxation is completely left out. Knowing how strict EU member states are regarding their domestic taxation, I can imagine that reaching a multinational agreement regarding taxation would be next to impossible. And finally, copyrighted materials are not included. For example, music and video streaming services can thereby still freely limit their offering between EU countries and pricing too. I can imagine that the discussions regarding IP is at least as difficult as taxation.