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End in sight? Geoblocking restricts online shoppers in Switzerland

Online shopping with Visa or Mastercard, pictured in Zurich

The European Commission calculates European consumers would gain €500 million if geoblocking practices in e-commerce were lifted.

(Keystone)

Swiss consumers face a major obstacle in the form of geoblocking, often resulting in limited choice and higher prices than if they lived elsewhere in Europe. But an end to the practice could be a long way off. 

Online shopping is a fast-growing business with orders placed abroad by Swiss residents surging by 20% last year. Geoblocking is a common practice where retailers prevent online shoppers from buying cheaper products or services from sites outside their own country.

Readers (see infobox) said cosmetics, perfumes, jewelry, TV shows, music downloads, radio shows, and online TV and film subscription services like Netflix were frequently geo-restricted.

 Swissinfo.ch readers react

‘Unfair’, ‘unacceptable’ and ‘a never-ending nightmare’. These were just a few of the comments made by Swiss-based readers when asked about the geoblocking phenomenon. 

“As soon as your Swiss IP is detected, the price goes right up. It’s because your point of sale is Switzerland,” wrote Gerome Mortelecque. 

“We don't have an issue with paying more for our Swiss Netflix account but there are fewer titles available in Switzerland. Copyright laws of each country prevent a real global solution for streaming providers which is a shame and really something we need to get rid of,” said Thomas Schneider. 

The online giant Amazon was also singled out as one of the biggest culprits. 

“I've given up trying to order anything from Amazon to Switzerland. Generally, 19 out of 20 or more products I look at don't ship to Switzerland, except books and DVDs,” wrote Lilian Hausmann. 

Mary Miller-Sägesser concurred: “You can only download books on Kindle from amazon.de while there are hundreds of free books over at amazon.com. And you get the forever frustrating, ‘this article cannot be shipped to Switzerland’ or ‘we'll ship it, but it will cost your first-born child’ message. As to Swiss Netflix, pathetic.” 

Italian speakers in Switzerland face similar restrictions when trying to buy Italian language books and other items online.

end of infobox

Robin Eymann, head of economic policy at the Federation of French-speaking Consumers (FRC)external link, believes geoblocking is ‘getting worse every day’ owing to the fast-moving nature of e-commerce. 

He felt the main problem for Swiss residents was online price differences for clothing, shoes, books, magazines and films from sites like Netflix. 

“For the same item, if you buy it on Zalando.fr it may cost CHF100 ($103) but on Zalando.ch it's CHF300,” he said. 

The issue of geoblocking is part of a popular initiative aimed at combating unfair pricing practices for imported products, which was launched last September by Swiss consumer groups, parliamentarians and activists. They have until March 2018 to collect enough signatures to force a nationwide vote. 

Lonely battle

But apart from the initiative, geoblocking is seldom discussed. One of the few politicians following the issue is centre-right Radical parliamentarian, Philippe Nantermod. 

“I think it's a generational problem which will increase in size as consumer habits change,” he told swissinfo.ch. 

Nantermod believes the Swiss are particularly at a disadvantage when it comes to buying online entertainment, music and multimedia, and claims major lobby groups want to maintain geoblocking to ensure advertising revenue. 

Last year, he raised the question in parliamentexternal link, urging the government to limit geoblocking or to allow parallel imports of digital products and services. 

The government, however, maintains a ‘wait-and-see’ position. In its written reply, it said it was monitoring the situation as part of a national digital strategy but believes it is ‘premature and inappropriate’ to introduce measures addressing issues such as access to online content and cross-border portability which are not coordinated with the European Union. 

It is the responsibility of the Competition Commission (COMCO)external link to monitor companies’ distribution agreements and activities to see whether they violate Swiss laws. COMCO President Vincent Martenet told Le Temps newspaper that he would welcome more discussion on the issue of geoblocking. 

“Economically, Switzerland is integrated into the European market. It is in its interest that the rules of the game are similar,” he declared.

Single digital market

Global cross-border e-commerce is estimated to grow to $900 billion by 2020, according to DHL. Ending geoblocking is a priority for Brussels as it tries to create a single market for digital services across the 28-nation bloc. The European Commission calculates European consumers would gain €500 million if geo-blocking practices in e-commerce were lifted.  It is currently being addressed at different levels and in different sectors. 

The European Parliament and Council of Ministers member states have agreed on positions and are starting to form a common approach with a view to finalising a law on geo-blocking in e-commerce in the next 4-6 months. Their proposal would forbid online retailers from automatically re-routing customers to their domestic website without their consent. 

A Commission investigation recently found that manufacturers often restrict the distribution of their products in certain online channels and limit their listing on comparison websites. The report showed that 60% of digital content providers – across video games, TV shows and music - have agreed with the copyright holder to geoblock customers. More EU antitrust investigations into e-commerce firms are now expected. 

Advances have been made on the issue of portability of online subscriptions – paid subscriptions to computer games, iTunes and music streaming services – and will be covered by a new EU law in 2018. 

But there has been less progress in the EU on a proposal on geoblocking of audiovisual media. 

“There are issues over the clearance of rights for broadcasters to allow foreign customers to access content. There is more opposition,” explained Johannes Kleis, communications director at the European Consumer Organisation (BEUC)external link. “The European Broadcasting Union (EBU) supports the proposal but private broadcasters and film studios are providing the biggest opposition. It’s quite controversial.” 

“Too passive”

Whereas Brussels appears to be forging ahead, Switzerland, which is not an EU member, prefers to wait. 

“The result of the EU legislative process still remains uncertain and the deployment of measures won’t happen for several years,” the government wrote last year in answer to Nantermod. 

Eymann accuses the government of being far too passive: “It doesn't seem to interest them. It'll take the Swiss ten years after the EU bans geoblocking as they are advancing quickly.” 

Campaigners fear a re-run of the roaming case – a move to end mobile phone roaming charges in the 28-nation EU bloc came into effect last month but not in Switzerland, which is not party to the Europe-wide deal. 

“We should be partners with the EU Single Digital Market so that the problems such as those encountered with roaming don't happen for geoblocking,” said Nantermod.

Tell us about your experiences with geoblocking? You can comment below or on swissinfo's facebook page.

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