/ Money, Shopping, Travel & Leisure

Should the country where you live affect the price you pay?

Car hire sign

Should it cost you more to hire a car online depending on the country you live in? Or how about booking tickets to a visitor attraction such as Disneyland – should your home nation be a factor in the price you pay?

Last summer, the European Commission (EC) wrote to several car hire firms to demand they stop what it called discriminatory pricing practices.

It acted after regularly getting complaints from people who couldn’t get the cheapest price when booking online within the European Union because of where they lived.

The EC found that prices varied for some drivers even when picking up the same car, from the same place, at the same time, from the same car hire firm.

This appears to go against EU laws that say that ‘service recipients may not be discriminated against on the basis of nationality or residence unless there are objectively justified reasons to apply different conditions of access to their services.’

Things seem to have gotten better in the car rental business. But the same issues seem to be cropping up with other products and services sold online.

The EC is considering introducing legislation against restrictions on so-called geoblocking practices – restrictions on price and what you can buy online based on where you live.

British families charged more

Back in 2012, we reported on how British families were charged 62% more than French families to go to Disneyland Paris. It seems such variations may still be happening.

Marc Tarabella, a Belgian Member of the European Parliament (MEP), has looked at the price of a two-night stay at Disneyland Paris for more than a year. Prices varied from €865 for a Belgian or French family, to €1,114 for a Spanish family, €1,272 for a German family and €1,339 for an Italian family.

Disneyland explains that discounts can vary from country to country, according to school holiday periods, national holidays and people’s’ willingness to book longer stays.

But Tarabella said that such variations still exist over Christmas and summer, when many European consumers are on holiday at the same time.

Would we lose out under changes?

Our research into geoblocking showed that UK consumers are sometimes paying less than other European consumers – so we could lose out if territorial pricing is ended. Other studies have shown that this type of price flexibility can contribute to competition between firms and keep prices low.

It’s understandable that prices vary from country to country depending on tax, demand, etc. But if you’re buying a product or service that is provided in one place, should you pay a price that varies because of where you live?

Do you think these pricing practices are fair? Have you seen examples? What would you think if more uniform prices across Europe mean British consumers pay more for some products and services?

Comments
Profile photo of Patrick Taylor
Member

An interesting question, and if we vote to leave the EU in 2017, irrelevant !

However making the assumption we stay I am conflicted as it is right and proper for vendors to sell at the price the market will bear or that it is mandated that there can only ever be one price for all buyers.

My instinctive reaction is there should only be one price – swiftly followed by the thought that legislation like this will simply lead to discount vouchers in certain areas and not in others. It will be a nightmare to police such a system. On balance I think let vendors sell at the price they think fit and consumers be more aware of what is happening and use consumer power to effect changes.

People get very lazy and careless if they think nanny state will make everything fair.

Incidentally the article should have included examples where the UK may benefit as the readers is left perplexed and also unable to evaluate the wins and losses..

Profile photo of rarrar
Member

Just been looking at ebook pricing, Kindle ebook prices vary across the EU significantly ;some seem much cheaper on the Amazon German site but Amazon.de will not let UK customers buy Kindle books due to copyright issues.
Have a feeling this may also apply to ebooks on the Google.cpm site as well.

Profile photo of NFH
Member

The price should vary only if the place of supply varies. If the place of supply is the same for consumers resident in various countries, then the price should be the same. The latest EU rules require VAT on services to be the VAT rate in the country that is the place of supply of the service. This means that digital services (e.g. buying apps) are taxed in the country of residence, but car hire is taxed in the country where the car is hired.

The European Commission needs to increase the level of fines for such discriminatory pricing, as it seems the deterrents are not currently sufficient.

Profile photo of Patrick Taylor
Member

I suggest that it is a bit more nuanced. If I supply everything from Germany but I wish to set up a network of physical vendors and repair shops in the UK, and one in Greece because the costs of doing business are greater in the UK surely I should be able to tailor my selling price on-line to achieving profitable chains in both countries?

Profile photo of NFH
Member

I would like to see a complete ban on geo-pricing and geo-blocking, both inside and outside the EU. It serves only to distort competition and has no place in the internet age. Prices of goods and services should be based only on a single price plus delivery costs (where applicable) and the applicable tax, never on consumers’ geographically-varying ability to pay.

Profile photo of NFH
Member

I’ve just learnt that Airbnb charges VAT according to the country of residence (for EU residents), not according to the place of supply. Therefore a resident of Denmark (where VAT is a whopping 25%) pays 25% VAT for renting a flat in Delaware (a US state with no sales taxes). This is absurd. Why should EU residents be charged VAT based on where they live rather than where they use the service? I’m sure that Airbnb has got this wrong.

https://www.airbnb.co.uk/help/article/436