The Economic Impact of Removing GEO-Blocking Restrictions in the EU Digital Single Market

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.

Keywords: cross-border e-commerce, geo-blocking, digital single market

JEL Classification: D12