EU says widespread use of geoblocking may breach antitrust rules

[September 15, 2016]  BRUSSELS (Reuters) - EU antitrust regulators said on Thursday they may take action against online and electronic retailers restricting cross-border sales within the bloc but only on a case-by-case basis.

Following a year-long investigation into the sector, the European Commission preliminary report showed that geoblocking, where retailers prevent online shoppers in some countries buying cheaper products or services abroad, is widespread, due in part to agreements between retailers and content providers.

The so-called e-commerce sector inquiry is part of the European Commission's campaign to overhaul the 28-country bloc's digital market in a bid to boost growth and catch up with the United States and Asia.

The EU executive also found manufacturers increasingly use selective distribution and contractual sales restrictions, such as price restrictions and curbs on online sales, to better control their products.

"These practices can prevent European consumers from reaping the full benefits of e-commerce in terms of greater choice and lower prices," Competition Commissioner Margrethe Vestager said in a statement.

The initial findings by the EU antitrust enforcer could lay the groundwork for cases against some retailers. A final report is due in the first quarter of 2017.

EU antitrust scrutiny of the pharmaceutical, energy and financial services industries over the past decade prompted investigations into companies in all three sectors.

European Commissioner for Violation of EU Treaties Margrethe Vestager addresses the European Parliament in Strasbourg, France, during a debate on Ireland's tax dealings with Apple Inc, September 14, 2016. REUTERS/Vincent Kessler

While about half of EU consumers shopped online in 2014, only 15 percent of them bought a product from another EU country because of language barriers, different laws as well as anti-competitive behavior, according to Commission data.

(Reporting by Alissa de Carbonnel and Foo Yun Chee in Brussels; Editing by Jan Strupczewski)

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