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EU plans competition inquiry into e-commerce sector EU plans competition inquiry into e-commerce sector
(about 1 hour later)
Europe’s top competition watchdog has said that companies charging online shoppers higher prices for the same goods depending on where they live could be breaking the law.Europe’s top competition watchdog has said that companies charging online shoppers higher prices for the same goods depending on where they live could be breaking the law.
The EU’s competition commissioner, Margrethe Vestager, sounded the alarm as she announced a sweeping inquiry into Europe’s e-commerce marketplace, subject to approval by the European commission in May.The EU’s competition commissioner, Margrethe Vestager, sounded the alarm as she announced a sweeping inquiry into Europe’s e-commerce marketplace, subject to approval by the European commission in May.
Her investigation will examine why prices can vary so dramatically between the country-specific websites of retailers such as Amazon and Apple. It will cover digital content such as films, TV series, music and games, and physical goods such as computers and designer clothes.Her investigation will examine why prices can vary so dramatically between the country-specific websites of retailers such as Amazon and Apple. It will cover digital content such as films, TV series, music and games, and physical goods such as computers and designer clothes.
“It has become normal to travel from Germany to Poland, say, and take back home the goods you have bought during your trip,” Vestager said on Thursday. “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.“It has become normal to travel from Germany to Poland, say, and take back home the goods you have bought during your trip,” Vestager said on Thursday. “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.”“European consumers should be able to access goods, content and other services no matter where they live and travel in Europe.”
The newly appointed competition boss said she wanted to create a truly single online market for goods in Europe. Her inquiry will also examine geo-blocking – software which erects artificial digital barriers between countries. The newly appointed competition boss said she wanted to create a truly single online market for goods in Europe. Her inquiry will also examine geo-blocking – software that erects artificial digital barriers between countries.
Vestager cited the example of a Netflix subscriber in Brussels, paying the same price as a British subscriber, but given access to a much smaller library of content than is available on the Netflix UK site.Vestager cited the example of a Netflix subscriber in Brussels, paying the same price as a British subscriber, but given access to a much smaller library of content than is available on the Netflix UK site.
A truly single e-commerce market could be good news for UK shoppers, who are typically charged some of the highest prices in Europe. An iPhone 6 on Apple’s Spanish website, for example, is £30 cheaper than the identical model on the UK Apple store.A truly single e-commerce market could be good news for UK shoppers, who are typically charged some of the highest prices in Europe. An iPhone 6 on Apple’s Spanish website, for example, is £30 cheaper than the identical model on the UK Apple store.
Amazon sells Beats headphones for £113 in Germany, but the same item costs £169 on Amazon.co.uk. A Spotify premium subscription in the UK costs £9.99, but in Germany it costs €9.99 - £2.70 less. Amazon sells Beats headphones for £113 in Germany, but the same item costs £169 on Amazon.co.uk. A Spotify premium subscription in the UK costs £9.99, but in Germany it costs €9.99 – £2.70 less.
“Think of a French tourist who buys a pair of Italian shoes in Rome,” said Vestager. “Why is she re-routed to a French website when she tries to buy them online from home? 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.”“Think of a French tourist who buys a pair of Italian shoes in Rome,” said Vestager. “Why is she re-routed to a French website when she tries to buy them online from home? 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.”
She said the arrangements fall under EU competition law, and were covered by legislation called the vertical guidelines. The guidelines were updated in 2010 to ensure a level playing field for distributors, allowing them to sell online in any of the 28 member states, and to protect consmers. She said the arrangements fall under EU competition law, and were covered by legislation called vertical guidelines. The guidelines were updated in 2010 to ensure a level playing field for distributors, allowing them to sell online in any of the 28 member states, and to protect consumers.
Vestager said: “Consumers must be allowed to look for the best deals online wherever they want. Contractual bans of so-called passive online sales are therefore considered hardcore restrictions of competition.”Vestager said: “Consumers must be allowed to look for the best deals online wherever they want. Contractual bans of so-called passive online sales are therefore considered hardcore restrictions of competition.”
Questionnaires will be sent to content rights holders, broadcasters, manufacturers, online merchants and marketplace operators. The inquiry is intended to produce data on how the market works, and highlight any anti-competitive practices. The commission would then have to launch inquiries into specific breaches of the law.Questionnaires will be sent to content rights holders, broadcasters, manufacturers, online merchants and marketplace operators. The inquiry is intended to produce data on how the market works, and highlight any anti-competitive practices. The commission would then have to launch inquiries into specific breaches of the law.
Last year, Brussels opened a formal investigation involving major US film studios and large European broadcasters and their licensing contracts. It is also investigating pricing and cross-border trade restrictions for consumer electronics and the geo-blocking of video games sold online for playing on personal computers.Last year, Brussels opened a formal investigation involving major US film studios and large European broadcasters and their licensing contracts. It is also investigating pricing and cross-border trade restrictions for consumer electronics and the geo-blocking of video games sold online for playing on personal computers.
Addressing the same subject on Wednesday, the commission’s vice-president, Andrus Ansip, who is leading the charge to create a digital single market, said: “I detest geoblocking from the bottom of my heart.” Addressing the same subject on Wednesday, the commission’s vice-president, Andrus Ansip, who is leading the charge to create a digital single market, said: “I detest geo-blocking from the bottom of my heart.”
Geoblocking can be used to divert shoppers back to a website in their own country, denying them access to better prices. It can also be used by sites like YouTube to stop a viewer in Poland seeing a video that is accessible to a viewer in France. Geo-blocking can be used to divert shoppers back to a website in their own country, denying them access to better prices. It can also be used by sites like YouTube to stop a viewer in Poland seeing a video that is accessible to a viewer in France.
Ansip said: “We need to stop people being blocked from a website based on their nationality, residence or location. We agreed that the logic of geo-blocking cannot override that of the single market. They cannot coexist.”Ansip said: “We need to stop people being blocked from a website based on their nationality, residence or location. We agreed that the logic of geo-blocking cannot override that of the single market. They cannot coexist.”
How prices varyHow prices vary
Apple StoreApple Store
iPhone 6 16GB:iPhone 6 16GB:
in the UK £539in the UK £539
in Spain £509 (€699)in Spain £509 (€699)
Macbook Air 13 inch Macbook Air 13in
in the UK £849in the UK £849
in Spain £802 (€1099)in Spain £802 (€1099)
AmazonAmazon
Dr Dre Beats Solo2 headphonesDr Dre Beats Solo2 headphones
in the UK £169in the UK £169
in Germany £113 (€155)in Germany £113 (€155)
On Ferragamo.com Ferragamo.com
Varina ballerinasVarina ballerinas
in the UK £355in the UK £355
in Italy £274 (€375)in Italy £274 (€375)
Microsoft storeMicrosoft store
XBox OneXBox One
in the UK £329.99in the UK £329.99
in Spain £292.00 (€399.99)in Spain £292.00 (€399.99)