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EU plans inquiry into e-commerce sector

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31/03/2015
The EU Directorate General for Competition has announced it will launch an inquiry into whether e-commerce firms charging consumers different prices depending on their country of residence are acting unlawfully.

EU competition commissioner Margrethe Vestager said the investigation will seek to establish why prices vary so notably between the country-specific websites of online retailers such as Amazon, and consider both physical goods and downloadable content.

“In continental Europe, it has become normal to travel from Germany to Poland, say, and buy goods you then take back home,” Vestager remarked. “Unfortunately, buying goods online is a lot more difficult. It sounds like a paradox, but we still have a number of digital borders. It is high time we removed these barriers, which keep Europe’s digital markets fragmented. European consumers should be able to access goods, content and other services no matter where they live and travel in Europe.”

Vestager cited a number of examples of this phenomenon, among them Belgian Netflix subscribers paying the same prices as British subscribers for a far smaller content range, and an iPhone 6 on Apple’s Spanish website costing £30 less than on Apple’s UK website. “Restrictions like these are often the result of arrangements that are included in contracts between manufacturers and content owners on one side and their distributors on the other,” said Vestager.

Another key target will be ‘geo-blocking’ – a web restriction that can be used to prevent consumers using overseas site imprints (e.g. British shoppers using Amazon Spain), which directs buyers back to their own country’s version of website and prevents them from capitalising on better prices.

“Consumers must be allowed to look for the best deals online wherever they want,” Vestager continued. “Such bans on sale must be considered hard-core restrictions on competition.”

The Directorate General’s vice-president, Andrus Ansip, who is leading the charge to create a digital single market, has said that “I detest geo-blocking from the bottom of my heart.”

“We need to stop people being blocked from a website based on their nationality, residence or location,” Ansip commented following Vestager’s announcement. “We agreed that the logic of geo-blocking cannot override that of the single market. They cannot coexist.”

Vestager also pledged to create a wholly unified e-commerce market in Europe, with consumers paying the same prices no matter where they are. A genuinely singular e-commerce market could have positive implications for UK consumers, who are often charged some of the highest prices in Europe.

 

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