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Brussels opens probe into geo-blocking in online sales

Brussels opens probe into geo-blocking in online sales

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(BRUSSELS) - The EU Commission launched three separate investigations Thursday to assess if certain online sales practices prevent consumers from enjoying cross-border choice, in breach of EU antitrust rules.

"E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders", said Competition Commissioner Margrethe Vestager: "The three investigations we have opened today focus on practices where we suspect companies are trying to deny these benefits for consumers."

The cases concern the consumer electronics, video games and hotel accommodation sectors. Specifically, the EU executive is investigating whether these companies are breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location.

Indications are that businesses are themselves establishing barriers to cross-border online trade, with a view to "fragmenting the EU's Single Market along national borders and preventing competition".

The three investigations aim to tackle the specific issues of retail price restrictions, discrimination on the basis of location and geo-blocking. The preliminary results of the Commission's competition sector inquiry on e-commerce show that the use of these restrictions is widespread throughout the EU.

The first case concerns consumer electronics manufacturers. The Commission is investigating whether Asus, Denon & Marantz, Philips and Pioneer have breached EU competition rules by restricting the ability of online retailers to set their own prices for widely used consumer electronics products such as household appliances, notebooks and hi-fi products.

The second focusses on the Video games sector. Here the Commission is investigating bilateral agreements concluded between Valve Corporation, owner of the Steam game distribution platform, and five PC video game publishers, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax. The investigation again concerns geo-blocking practices, where companies prevent consumers from purchasing digital content, in this case PC video games, because of the consumer's location or country of residence.

Finally, on hotel price discrimination, following complaints from customers, the Commission is investigating agreements regarding hotel accommodation concluded between the largest European tour operators on the one hand (Kuoni, REWE, Thomas Cook, TUI) and hotels on the other hand (Meliá Hotels). The Commission stresses that it welcomes hotels developing and introducing innovative pricing mechanisms to maximise room usage, but hotels and tour operators cannot discriminate customers on the basis of their location. The agreements in question may contain clauses that discriminate between customers, based on their nationality or country of residence – as a result customers would not be able to see the full hotel availability or book hotel rooms at the best prices.

More information on the investigations will be available on the Commission's competition website, in the public case register: for the video games investigation under the case numbers AT.40413 (Focus Home), AT.40414 (Koch Media), AT.40420 (ZeniMax), AT.40422 (Bandai Namco), AT.40424 (Capcom); for the hotel pricing investigation under the case number AT.40308 and for the retail price agreements investigation under the case numbers AT.40465 (Asus), AT.40469 (Denon & Marantz), AT.40181 (Philips), AT.40182 (Pioneer).


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Mariachis Bogota

Posted by Marichis Bogota at 06 February 2017, 09:31 CET
Commissioner Margrethe Vestager, in charge of competition policy said: "E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders. The three investigations we have opened today focus on practices where we suspect companies are trying to deny these benefits for consumers. The cases concern the consumer electronics, video games and hotel accommodation sectors. More specifically, we are looking into whether these companies are breaking EU competition rules by unfairly restricting retail prices or by excluding customers from certain offers because of their nationality or location."
Although more and more goods and services are traded over the internet worldwide, cross-border online sales within the EU are only growing slowly. The Commission's Digital Single Market Strategy identifies a number of regulatory barriers that hinder cross-border e-commerce and proposes different initiatives to address these.
However, there are also indications that businesses may themselves establish barriers to cross-border online trade, with a view to fragmenting the EU's Single Market along national borders and preventing competition. The Commission has therefore launched an inquiry to gather market information in order to better understand the nature, prevalence and effects of these barriers and to assess them in light of EU antitrust rules.
The three investigations opened today by the Commission aim to tackle the specific issues of retail price restrictions, discrimination on the basis of location and geo-blocking. The preliminary results of the Commission's competition sector inquiry on e-commerce show that the use of these restrictions is widespread throughout the EU.
Under certain circumstances, these practices may make cross-border shopping or online shopping in general more difficult and ultimately harm consumers by preventing them from benefiting from greater choice and lower prices in e-commerce. Such behaviour may breach EU competition rules that prohibit anti-competitive agreements between companies (Article 101 of the Treaty on the Functioning of the European Union - TFEU).