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Wednesday, June 12, 2024 | Back issues
Courthouse News Service Courthouse News Service

EU Regulators to|Tackle E-Commerce

(CN) - A day after announcing plans to create a single digital experience for all EU citizens, the European Commission said Thursday it would open an antitrust investigation into the continent's e-commerce sector.

On Wednesday, the regulatory and administrative body pointed to the EU's patchwork of 28 different member-state rules governing the technology sector as proof of the need for a single digital market.

One commissioner expressed frustration that while citizens can cross physical borders into any other EU member state freely, they are often blocked from spending their euros on an e-commerce website outside of their home state - a practice known as geo-blocking.

As a result, while half of EU consumers shop online only 15 percent bought something from a seller in another member state.

Competition commissioner Margrethe Vestager - speaking at a competition conference in Berlin on Thursday - said that while language barriers, consumer preferences and legislative differences are partly to blame, e-retailers may also be throwing their own anti-competitive wrenches into the mix.

"I for one cannot understand why I can watch my favorite Danish channels on my tablet in Copenhagen - a service I paid for - but I can't when I'm in Brussels," Vestager said. "It's very difficult to explain this to the people and, at the same time, make the point that we are all residents of the EU and consumers in the same internal market."

Vestager said the commission's investigation will focus on one likely reason for geo-blocking and rerouting potential customers to the local edition of an e-commerce site: contractual arrangements between manufacturers, content owners and distributors.

"These arrangements fall under EU competition law," Vestager said. "The commission updated the rules in 2010 and made clear that in principle, every distributor must be allowed to use the Internet to sell its products.

"Conversely, consumers must be allowed to look for the best deals online wherever they want," she continued. "Contractual bans of so-called passive online sales are therefore considered hardcore restrictions of competition."

Vestager estimates that improving e-commerce competition and creating a single digital market in the EU would add 340 billion euros to the gross domestic product of Europe - the entire economic output of her native Denmark, she said.

While the specifics of the investigation have not been determined, Vestager said she expects to have the inquiry on the commission table in May.

"If everything goes to plan, you can expect to read our preliminary findings in mid-2016," she said.

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