Geo-blocking in the spotlight: European Commission launches evaluation of legal framework

On 11 February 2025, the European Commission announced the launch of its evaluation of Regulation (EU) 2018/30 on geo-blocking (the Regulation), starting with a call for evidence released on the same day. The Regulation, which prohibits traders selling to EU customers from carrying out unjustified geo-blocking and otherwise discriminating based on a customer’s nationality and place of residence or establishment within the EU, was initially introduced to ensure better access to goods and services across Member States.  

The evaluation will assess the Regulation’s effectiveness in the context of the EU’s wide-ranging Digital Single Market Strategy. At a time when accelerating single market integration in digital services is seen as crucial for the future of European competitiveness (see Mario Draghi’s report), what can we expect the Commission’s review to focus on? 

Background on the Regulation

Geo-blocking refers to the act of blocking or limiting a customer’s access to online interfaces (e.g. websites and apps) based on their location. The Regulation, which came into force on 22 March 2018, with businesses being required to comply with it from 3 December that year, sought to limit this practice and prevent traders providing different general conditions of access to their goods or services based on a customer’s nationality, residence or establishment within the EU in order to boost cross-border e-commerce. Prior to its implementation, the Commission considered the discriminatory practices enabled by geo-blocking to be one of the key factors contributing to limited levels of cross-borders transactions within the EU.

The Regulation enforces a “shop like a local” principle and identifies specific situations where there is no justification to apply different conditions of access to goods or services across the EU for reasons of customer nationality or place of residence. However, there are several carve outs including in respect of transport services, retail financial services and audio-visual services to which the Regulation does not apply. Additionally, the Regulation’s non-discrimination rules do not apply to electronically supplied services whose main feature is to provide access to copyright-protected works, such as online streaming services, e-books, videogames, music and software. For more information on the Regulation and its scope, see our previous client briefing and blog post.

What can we expect from the evaluation? 

Article 9 of the Regulation mandates the Commission to periodically assess the Regulation, initially in March 2020 and then every 5 years afterwards. This latest evaluation will be a comprehensive review of the Regulation to assess whether it has met its objectives against five evaluation criteria: relevance, effectiveness, coherence, efficiency and EU added value. It will cover the period when the Regulation first became applicable until 31 December 2024. 

Of particular interest will be the Commission’s consideration of whether to expand the scope of the Regulation. In its first review the Commission noted that, although there were potential benefits to EU consumers in extending the restrictions to cover audio-visual content, there was a risk that an expansion of the Regulation could result in price rises in certain Member States and also challenges for investment in content production and the overall sector ecosystem. Overall, the Commission took the view at the time that it was “too soon to assess all the direct and indirect effects of the current [Regulation]” and the full effects would “only become apparent with time.” It is therefore anticipated that this latest review may result in more detailed findings and potential proposals for amendment, which relevant industry players should watch closely. 

The Commission has also signalled that it will reflect on the areas for improvement highlighted in a recent report issued by European Court of Auditors (ECA). The report, issued on 20 January 2025, found that whilst the Regulation has “made [progress] in addressing the needs of consumers and traders … challenges concerning the proper and uniform implementation of the Regulation remain.”

At the time, the Regulation enabled each Member State to set its own enforcement regime, provided it was sufficiently effective, proportionate and dissuasive. Currently, enforcement tools and measures differ largely between EU jurisdictions – with the ECA report finding that penalties for infringements could range from €26 to €5 million across Member States. In line with recent efforts towards more coordinated enforcement of EU consumer laws more generally, we can expect the Commission to explore ideas to harmonise and strengthen enforcement of the Regulation as part of this latest evaluation. 

In recent years, geo-blocking has also been on the Commission’s radar from an antitrust enforcement perspective, which may provide some clues of likely areas of interest for the Commission’s evaluation. While the Regulation focuses on unilateral conduct, geo-blocking practices that are implemented through agreements between suppliers and distributors can fall foul of the prohibition against anti-competitive agreements in Article 101 of the Treaty on the Functioning of the EU (TFEU). Importantly, this is the case even where the goods or services concerned are currently outside the scope of the Regulation.[1]

In 2021, the Commission fined Valve, owner of the online PC gaming platform ‘Steam’, along with five video game publishers a total of €7.8 million for bilaterally agreeing to geo-block video games within certain EEA states in breach of Article 101 TFEU. The Commission concluded that geo-blocking prevented customers in the EEA from taking advantage of lower prices in other Member States and artificially partitioned the single market in violation of EU antitrust rules. 

• On appeal to the European General Court, Valve had argued that it could not be held liable for video game publishers seeking to enforce their valid copyright. In particular, Valve had claimed that whilst it had provided publishers with the technical function to limit geographic access to certain games, it did not demonstrate any concurrence of wills, and thus collusion, to engage in specific conduct on the market.
   
• In September 2023, however, the General Court rejected the appeal. It found that the Commission established to the requisite legal standard the existence of an agreement or concerted practice between Valve and each of the five publishers having as its object the restriction of parallel imports. It also found that geo-blocking sought to prevent the video games, distributed in certain countries at low prices, from being purchased by distributors or users located in other countries where prices are much higher. Therefore, the geo-blocking arrangements did not aim to protect the copyright of publishers of the PC video games, but were used to eliminate parallel imports of video games and ultimately safeguard “the margins earned” by Valve. The General Court further observed that the copyright system does not allow rights holders to “demand the highest possible remuneration” or engage in conduct which results in “artificial price differences between the partitioned national markets”.

It will be interesting to see whether these developments in the competition law space will influence the Commission’s thinking when reviewing the Regulation on geo-blocking and any potential extension of its scope. 

Next steps and implications

Stakeholders are invited to respond to the call for evidence by 11 March 2025. The Commission has stated that it will launch a public consultation later this year in Q2, with a target completion date of Q4 2025 for its evaluation.

Though UK customers no longer benefit from the Regulation following Brexit, UK traders must remain aware of EU geo-blocking restrictions as they continue to apply to those selling relevant goods or services into the EU, in addition to potential antitrust risks. Traders selling to EU residents should therefore keep a close eye on the outcome of the Commission’s review, especially if the findings indicate that the Commission will seek to expand the Regulation’s coverage. 

[1] Unilateral conduct by dominant companies that leads to EU market partitioning may also breach the EU rules on abuses of dominance, even where the conduct does not fall within the current scope of the Regulation on geo-blocking.