The purpose of this article is to provide the reader with ideas for structuring an online sales strategy aimed at foreign markets, taking into account the EU regulations on geoblockingregulations of the countries to which one intends to export and, last but not least, antitrust law.

1. Geoblocking: what is it and when does it apply?

Firstly, one must analyse the recent European discipline, introduced with Reg. 28 February 2018, No 302/2018in force since 3 September 2018, containing measures to prevent unjustified geographical blocks (also known as "geoblocking").

The geoblocking was introduced by the EU with the purpose of ensuring that one of the founding principles of the one of the founding principles of the European Union: the free movement of goods.

The new regulation, therefore therefore aims to prevent unjustified geographical blocks or other forms of discrimination based, directly or indirectly, on the nationality, place of of residence or establishment of customers.

Article 3 of that regulation states in fact that:

"A professional [i.e. an entrepreneur/company]. cannot block or restrict through the use of technological tools or in other ways, a customer's access to its online interface for reasons related to the nationality, place of residence or place of establishment of the customer."

This article continues:

"A professional cannot for nationality reasonsto the place of residence, or to the place of establishment of a customer, redirect that customer to a version of its online interface other than the one the customer wished to initially accessbecause of its structure of the language used or other characteristics that make it specifically intended for customers with a particular nationality, place of residence or place of establishment, a unless the customer has explicitly consented thereto. "

From a concrete point of view, the Regulation prohibits the practice whereby a user, say a French user, is prevented from example a French user, from buying a product on an Italian site, because he is automatically redirected automatically to another site designated to handle French customers.

Warning, this does not intended that the professional may not use different versions of its interface onlinein order to address customers from different Member States[1] (e.g. the German language version for the German market, the French for France, etc.), but requires that the different versions designed for the different markets, can be accessible from all EU countries (a French, can see the Italian site and the sales conditions contained therein).

On this point, Art. 3(2), point 2 of the Regulation clarifies that:

"in the event of redirection with the explicit consent of the client, the version of the trader's online interface which the client initially wished to access must remain easily accessible to the client in question."

As a result, the professional will not only be free to use different versions of their interface online to address customers from different Member States, but also to automatically redirect the customer to a certain version of the interface if the user has given his or her explicit consent[2] and provided that the user is still free to access all other versions of the same interface.

2. Does geoblocking mean that I have to sell everywhere?

One point must be clarified: the new Regulation deletes the blockade, but does not oblige you to sell outside your country.

The geoblocking does not limit the possibility of deciding to market its products online in certain countries, but rather prohibits that if the site only provides for delivery to certain countries (to simplify, in Italy), the customer from another EU country (Germany) is prevented from purchasing online that product if you accept delivery in Italy.[3]

Furthermore, if marketing is envisaged in several countries, price differentiation is permitted, to take into account, for example the different costs to be incurred for the delivery of the goods, as long as the choice is not made in a discriminatory manner.

In fact, Article 4(1) of the Regulation provides that the geoblocking:

"does not prevent traders from offering general terms and conditions, including net selling prices, that differ between or within Member States and that are offered to customers in a specific territory or to specific groups of customers on non-discriminatory basis. "

3. Who do I sell to?

Given that the proposed sale inserted online on its site implies that it is visible by all network users, in the absence of clarification, the the general rule would apply that if the trader directs his sales activity in a particular foreign country, implicitly makes assume that the sale is also addressed to customers domiciled in that particular country.

It follows that if the site is translated into German, it is implicit that the sale is made to Germany, Austria, Lichtenstein and Luxembourg, just as if it is translated into English, that the same is promoted against (almost) the whole world.

Although the choice of 'maximum openness' may seem commercially very convenient, one is advised to assess it prudently, as it has considerable legal repercussions (mainly related to the law applicable to individual sales contracts and the violation of any foreign rules), tax (in particular with reference to the reference to the subjection of the transaction to the VAT of the buyer's country of domicile) and customs (in the case of non-EU sales).

Therefore, for the avoidance of doubt, once you have assessed which countries you actually intend to sell to, it is advisable to state this directly on the site and in the general terms and conditions of sale.

4. By what law is the sale regulated?

If sales are directed only to one market (e.g., for simplification, Italy), with delivery of the goods in the territory of that country and the buyer is a consumer domiciled in a different country (e.g. Germany), who requires delivery of the goods to take place in Italy, such sale shall be governed by Italian law, without there being any need to to provide in the general terms and conditions of sale for compliance with any mandatory rules provided for by Germany. [4]

A different matter, however, if the order originates in Germany and the delivery of the goods takes place on German territory, in which case the law applicable to the contract of sale will be German law and, if the end user is a consumer, this may not be derogated from, even with the written consent of the parties.[5]

5. Violation of information obligations and foreign regulations.

If the site provides for sale in countries other than Italy, it will be necessary to organise it by ensuring that:

  • the general terms and conditions of sale comply with the obligations of information to the consumer, as referred to in Art. 6, para. 1 of Directive 2011/83/EU;[6]
  • the general sales conditions comply with any mandatory regulations of the countries to which it is intended to export, different and/or additional to those provided for by Italian law;
  • the commercial information required by the country to which one is exporting.

With reference to the above disclosure obligations, it should be noted that:

  • the limitation of the delivery of the goods must be clearly stated on the site, from the beginning of theprocedure leading to the conclusion of the contract, formerly Article 8(3) of Directive 2011/83/EU;[7]
  • must be in the language of the consumer (Art. 8 para. 1 of the Directive provides for the obligation to "inform the consumer in plain and intelligible language").[8]

The sanction in case of breach of consumer information obligations consists of the extension of the right of withdrawal from fourteen days to twelve months and fourteen days.[9]

In addition to the risk of such a sanction, in some European countries there is also the risk of being subject to a warning and, in the most serious cases, an injunction action before the competent court: German law, for example, provides that in the case of ineffective clauses in the general terms and conditions of sale and violation of consumer protection rules, the warning and/or injunction action may be brought not only by the consumer, but even by a competitor, i.e. a consumer protection association.[10]

6. Can distributors and retailers sell online?

In the event that the manufacturer also makes use of third-party distributors and resellers to market its products, it is worth briefly recalling what are the powers of control over these entities, referring, for further details, to the section antitrust of this blog.

The Vertical Sales Regulation 330/2010 and recent judgments of the European Court of Justice[11] provided that a manufacturer may not prohibit its distributor/reseller from sell purchased products through their own websitenor market through the digital platforms of third parties.

The only way to limit this possibility by third parties is (for high-end, luxury and technically developed products) to create a selective distribution networkin which the distributors and resellers undertake to sell the contract goods only to distributors selected on the basis of objective criteria of a qualitative nature established indiscriminately and non-discriminatorily for all persons belonging to the network.

In that case, according to the most recent case law of the Court of Justice,[12]a manufacturer is authorised to impose a clause on its distributor allowing it to sell products via internet, but on condition that such sales activity online is realised through an 'electronic shop window' of the authorised shop and that the aura of luxury and exclusivity of these products is thereby preserved (on this point, see the Amazon Case e The mixed system: when the manufacturer chooses to adopt both exclusive and selective distribution).

[1] Compare recital 20 of the Regulation on geoblocking.

[2] Consent, once given, may be considered valid also for subsequent visits by the same customer to the same interface online interface, provided that the customer is given the opportunity to revoke it when he or she deems it appropriate appropriate. On this point, see recital 20 of the Geoblocking Regulation.

[3] On this point see Stefano Dindo, E-Wine, Legal-economic aspects of wine communication and distribution online, G. Giappichelli Editore, p. 41, 2018.

[4] According to Art. 6, para, (a) and (b) of Regulation 593/2008.

[5] See previous footnote.

[6] Directive 2011/83/EU of the european parliament and of the council of 25 october 2011 on consumer rights consumers. Importantly, since this is a Directive (and not a Regulation), it must be transposed into national law, leaving member states free to choose the member states free to choose the most appropriate regulatory path to achieve the objectives set out therein; it follows that each country is free to include additional information obligations in addition to those set out in the directive itself.

[7] Art. 3 Directive 2011/83/EU: "E-commerce sites shall indicate clearly and legibly, at the latest at the at the latest at the beginning of the ordering process, whether restrictions apply related to delivery and which means of payment are accepted."

[8] Attention! These parameters language must also be observed for the application of the of the GDPR. On this point, see Recital 20 of that Regulation.

[9] Art. 10 para. 1 of Directive 2011/83.

[10] Cf. Robert Budde, E-Wine, Legal-economic aspects of online wine communication and distribution, G. Giappichelli Editore, p. 51 ff., 2018.

[11] See judgment of the Court of Justice in the Pierre Fabre case C-439/09.

[12] Judgment of 6 December 2017, C-230/16 Coty Germany GmbH.