EU plans competition inquiry into ecommerce sector

Margrethe Vestager announced an inquiry into Europe’s ecommerce marketplace, subject to approval by the European commission in May 2015, theguardian.com reports. 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. The newly appointed competition regulator said she wanted to create a single online market for goods in Europe and her inquiry will also examine geo-blocking, a software that erects artificial digital barriers between countries.

A single ecommerce 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 GBP 30 cheaper than the identical model on the UK Apple store. Amazon sells Beats headphones for GBP 113 in Germany, but the same item costs GBP 169 on Amazon.co.uk.

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. 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.

In 2014, 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.

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 websites like YouTube to stop a viewer in Poland seeing a video that is accessible to a viewer in France.