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The economic impact of removing geo-blocking restrictions in the EU Digital Single Market

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Abstract

This study investigates the welfare impact of lifting geo-blocking restrictions to cross-border e-commerce in the EU, using a dataset for consumer electronics products in ten European countries for the period 2012-2105. We simulated two counterfactual scenarios where geo-blocking is either fully or only indirectly removed. This would allow consumers to arbitrage, taking advantage of price differences, and to expand product variety through imports. We computed the welfare effects, as changes in both consumer and producer surpluses. Finally, we extrapolated these partial results to all online sales in the EU28. The results indicate that both consumers and producers would gain from removing geo-blocking restrictions. Smaller countries would benefit comparatively more than larger countries.

Suggested Citation

  • Nestor Duch-Brown & Bertin Martens, 2016. "The economic impact of removing geo-blocking restrictions in the EU Digital Single Market," JRC Working Papers on Digital Economy 2016-02, Joint Research Centre.
    • Handle: RePEc:ipt:decwpa:2016-02
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC101100
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    Cited by:

    1. BROOCKS Annette & DUCH BROWN Nestor & GOMEZ HERRERA Maria Estrella & MARTENS Bertin, 2020. "Geo-blocking: A literature review and new evidence in online audio-visual services," JRC Working Papers on Digital Economy 2020-01, Joint Research Centre.
    2. Bourreau, Marc & Manenti, Fabio M., 2023. "Selling cross-border in online markets: The impact of the ban on geoblocking strategies," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    3. Ovidiu Ioan Dumitru & Andreea Stoican, 2020. "The Impact of Geo-blocking Ban on the Development of the European Digital Single Market," Technium Social Sciences Journal, Technium Science, vol. 10(1), pages 258-266, August.
    4. ALAVERAS Georgios & DUCH BROWN Nestor & MARTENS Bertin, 2020. "Geo-blocking: Geo-blocking regulation: an assessment of its impact on the EU Digital Single Market," JRC Working Papers on Digital Economy 2020-02, Joint Research Centre.
    5. Latoszek Ewa, 2021. "Fostering sustainable development through the European Digital Single Market," Economics and Business Review, Sciendo, vol. 7(1), pages 68-89, March.
    6. Hamelmann, Lisa & Klein, Gordon J., 2017. "Removing geo-blocking: What are the effects on innovation for vertically differentiated goods?," CAWM Discussion Papers 100, University of Münster, Münster Center for Economic Policy (MEP).

    More about this item

    Keywords

    digital single market; geo-blocking; economic impact; consumer welfare; cross-border e-commerce; trade restrictions; consumer electronics;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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