Geo-blocking refers to practices used by online sellers that deny access to websites from other member states.
A planned update of EU audio visual rules also means that Netflix and Amazon's European operations will have to guarantee that at least 20 per cent of video content in their catalogue is from Europe.
The far-reaching proposals were outlined on Wednesday but immediately triggered criticism from both industry and MEPs.
Netflix disagreed with the Commission's ruling, arguing that a quota system, as well as forced investment in European productions, will not necessarily lead to quality shows being made.
Greens/EFA group digital agenda spokesperson Julia Reda said, "The proposed 'anti-geo-blocking' regulation doesn't do what it says on the tin."
In its raft of proposals, the Commission says it wants to ensure consumers seeking to buy products and services in another EU country, be it online or in person, are not discriminated against in terms of access to prices, sales or payment conditions, unless this is objectively justified for reasons such as VAT or certain public interest legal provisions.
Geo-blocking can result in online shoppers being rerouted to a country-specific platform when they try to buy abroad.
Under the plans, automatically rerouting customers to a local version of the online service will be forbidden. Online retailers will also be required to sell goods to customers throughout the EU without making them responsible for the cost of delivering them.
The geo-blocking proposal is necessary, says the Commission, because eCommerce is "not functioning as smoothly as it could."
Greater access is considered vital as a commission study in March showed an increasing number of goods and services are traded over the Internet but cross-border online sales within the EU are growing only slowly.
Currently, only 15 per cent of consumers buy online from another EU country and eight per cent of companies sell cross-border.
Overall, the plan is the latest step towards the digital single market under which the EU's 500 million people will no longer be blocked from buying goods and services more cheaply abroad online.
Speaking at a news conference in Brussels to announce the package, Andrus Ansip, the Commissioner responsible for the digital single market, said the so-called digital single market strategy seeks to "unlock the potential" of eCommerce.
He said: "All too often people are blocked from accessing the best offers when shopping online or decide not to buy cross-border because the delivery prices are too high or they are worried about how to claim their rights if something goes wrong."
He added, "We want to solve the problems that are preventing consumers and businesses from fully enjoying the opportunities of buying and selling products and services online.
"We also want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy, not weigh them down with unnecessary rules. They need the certainty of a modern and fair legal environment: that is what we are providing today."
Günther Oettinger, responsible for the digital economy, agreed, saying the geo-blocking initiative "strikes the right balance" between consumers' rights and business and will boost cross-border eCommerce.
The plans were mostly welcomed by Europe's main consumer organisation, although BEUC said they could go much further.
"It flies against the logic of a single market when consumers are prevented from buying a tablet, a sweater or a video game because they live in another EU country or because they are paying with a foreign credit card," said BEUC director general Monique Goyens.
But she said it is "regrettable that consumers can still be blocked from buying digital products such as eBooks and music from sellers based in other countries. TV series, films and sport events will also stay off-limits. It is time the EU puts the final nail in the coffin of geo-blocking."