Cross-border online purchases: what exactly is geo-blocking?

At Christmas time, the Federal Network Agency is asking the German population to report so-called geo-blocking. But what does the term actually mean? The backgrounds.

In order to give their loved ones some Christmas cheer, most people are again looking for gifts on the Internet this year. According to forecasts, online trade will account for around 17.6 percent of Christmas sales in Germany in 2022.

But most users know that not every online shop can be reached from anywhere. The reason for this is called geoblocking. And that’s not always right.

The Federal Network Agency therefore recently asked consumers to report so-called geo-blocking violations when making online purchases.

What is geo blocking?

However, some people are probably asking themselves the question: What is geoblocking anyway? Put simply, this is a country lock. According to Techopedia This restricts users’ internet access based on their location.

This means that companies and website operators store the physical locations of user IP addresses in databases. Depending on where consumers are located, they can then only access certain content to a limited extent due to their location.

Why is there geoblocking?

There are two main reasons for geo-blocking: On the one hand, copyright plays an important role. Streaming services in particular often offer completely different national libraries.

Behind this are the respective license agreements between the website operators and the owners of the content. For example, Netflix offers a different catalog in the USA than in Germany.

In some countries, people can also not access certain content due to censorship reasons. This mostly comes from the government. For example, people in Iran cannot use AirBnB due to US sanctions laws.

Geoblocking: the legal situation

Geo-blocking is basically legal. This is especially true when it comes to streaming offers. In other areas, however, things are different. For example, the Council of the European Union describes geo-blocking as a discriminatory practice when it prevents member states from buying goods from each other.

A 2018 EU regulation aims to end unjustified discrimination in online purchases based on nationality, place of residence or place of establishment within the single market.

This means that consumers should have the same access to offers as locals, regardless of their location. This applies equally online and in stationary retail.

Of course, there are also exceptions to this regulation: streaming services or services in the financial, health or transport sectors are not covered by the regulation.

This is how the geo-blocking regulation is implemented in Germany

In Germany, the Federal Network Agency is responsible for enforcing the regulation. As soon as consumers complain, the authority contacts the relevant providers and asks them to take proper action.

Fine of up to 300,000 euros

If a German company violates the European geo-blocking rules, the Federal Network Agency can issue orders and impose fines of up to 300,000 euros.

In the event of violations by providers from other European countries, the Federal Network Agency calls on the national authority of the EU country concerned to take measures.

The complaints received by the Federal Network Agency in 2022 mainly concerned cross-border purchases of goods, but also obstacles to accessing certain apps that can only be used nationally. So far, the companies have stopped their violations of the geo-blocking regulation in all cases.

Here’s how to bypass geo-blocking

There are already various methods to circumvent geoblocking. Here we present the four most common options.

Option 1: VPN

The best known and most effective option is to use a VPN. Using the private network connection, you mask your real IP address and replace it with that of another country. This will change your online location and bypass geo-blocking.

Option 2: Proxy server

With a proxy server you can put a middleman between you and the desired website, so to speak. A proxy server also has an IP address. So when you connect to the internet this way, your IP will change before you are redirected to the actual content.

Option 3: Tor Browser

You can also bypass geo-restrictions with the Tor browser. Just like Chrome and Safari, you can open websites normally. However, a Tor browser also allows you to access special “.onion” pages.

Option 4: Smart DNS or DNS changer

The so-called Domain Name System (DNS) makes domain names such as Facebook readable. With Smart DNS or DNS changer you can change DNS servers on your device from local to DNS servers in another country.

While all of these methods are common and legal, that doesn’t mean they’re morally right. In addition, bypassing the country blocks of many streaming services violates the terms and conditions.

If you try anyway, the relevant providers can, in the worst case, permanently exclude you from using the offer.

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