EU probes e-commerce in bid to wipe out competition barriers

March 26, 2015 10:27 AM

(Bloomberg)—Four years after probing Google Inc.’s tight grip on the Internet search market, European Union antitrust competition regulators set their sights on online barriers that thwart EU shoppers using websites outside their country.

An industrywide probe into online retail may trigger more competition cases, the European Commission said Thursday. The EU watchdog said “some companies may be taking measures to restrict cross-border e-commerce” such as contracts or technical measures.

“I can go to Italy and buy a pair of shoes but I am unable to do that from my home,” EU Competition Commissioner Margrethe Vestager told reporters at a press conference in Berlin. “If I try to buy on the website I may be redirected” because online traders often discriminate on the basis of customers’ residence or web address, she said.

Rebooting Europe’s digital economy is a focus for regulators concerned that Europeans are failing to seize opportunities to buy, sell or view content across the 28-nation bloc. Vestager says she’ll seek information from broadcasters, manufacturers, online retailers and online platforms about possible legal and technical barriers to wider EU trade.

Google probe

The EU’s e-commerce probe adds to its drawn-out investigation of Google’s search engine, which included complaints from shopping-comparison websites, and raids on Samsung Electronics Co., Royal Philips NV and Metro AG’s Media- Saturn in 2013 and a Metro unit earlier this month over the online sale of consumer electronics.

Andrus Ansip, the EU’s vice president for digital issues, said Wednesday that he wanted to abolish so-called geo-blocking of website content across Europe.

Broadcasters sometimes prevent viewers outside their home nation from watching sports or films. 21st Century Fox Inc., Time Warner Inc.’s Warner Brothers unit and other studios are being probed by the EU over licensing deals with pay-TV broadcasters that limit viewers’ access to content.

Online content services, such as Apple Inc.’s iTunes store or Netflix Inc.’s video streaming, must usually seek national licenses for music or film which can prevent them offering the same catalog across Europe.

Vestager said today that competition officials are examining geo-blocking in the video game industry.

The EU is drafting a digital strategy to be published on May 6 which seeks to create a single market for digital goods and services, tackling issues as different as copyright, tax and delivery charges.


Hotel reservations

Only 15% of Europeans use the Internet to buy from a store based in another country and only one in seven retailers sell online across borders, according to the commission.

The antitrust inquiry adds muscle to these initiatives and national probes into pricing for online hotel reservations and sporting goods that may restrict consumer choice. The EU previously struck a deal with Apple to cut UK prices for iTunes downloads and German and UK authorities got Inc. to lift restrictions on sales via its online platform.

Apple and Amazon are separately facing EU state aid probes into tax arrangements with Ireland and Luxembourg that Vestager has promised to wrap up in the coming months. The EU also wants to examine whether it needs to draft legislation or other measures to tackle problems with online platforms, it said Wednesday.

While the EU says low numbers of Europeans shopping from sites based in another country may be problematic, “retailers need to make choices about where they make investments” as serving customers in several nations can add costs, said Jamie Merriman, an analyst at Sanford C Bernstein & Co.

Preliminary results from the inquiry are due by mid-2016, Vestager said. EU commissioners will be asked to approve the start of the antitrust inquiry in the coming weeks.




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