PREMIUM FREE TRIAL

EU launches anti-trust e-commerce probe aimed at internal market

If you’re fan of  Yuppiechef or Spree, you’re bound to view e-commerce as a good thing. After all, it’s great to have something you desire delivered to you door! But increasingly, there are concerns amoung SA e-commerce operators of the high cost attached to offering free delivery to customers. And e-commerce is not necessarily all good for the consumer as this fascinating piece from The Conversation earlier this year shows: How price-comparison websites may do customers a disservice. That’s the interesting thing about the digital economy. We are only really beginning to discover how it is changing the way we consume and the way we do business. This AFP piece tells us about the EU’s recently launched digital strategy. The big problem in Europe is seems, is “geo-blocking”, explained so by the EU Competition Commissioner Margarethe Vestager: that she cannot watch her favourite Danish channels on her tablet in Brussels. – Gill Moodie

 

European Union Commissioner for Competition, Margrethe Vestager, photographs the media at the conclusion of a news conference at the EU Delegation in Washington April 16, 2015. The EU accused Google Inc. on Wednesday of cheating consumers and competitors by distorting web search results and also launched an antitrust probe into the internet search giant's Android system.     REUTERS/Gary Cameron
European Union Commissioner for Competition, Margrethe Vestager, photographs the media at the end of a news conference at the EU Delegation in Washington in April. REUTERS/Gary Cameron

Brussels formally opened an anti-trust inquiry into Europe’s online shopping marketplace on Wednesday amid concerns about how websites such as Amazon and Google use their influence.

The competition probe is the aggressive centrepiece of a new digital market strategy unveiled by the European Commission vice president Andrus Ansip aimed at dragging the 28-state bloc into the 21st century.

It will focus on areas such as electronics, clothing, shoes and digital content for which so-called e-commerce is most used for, said the Commission, the powerful executive branch of the European Union.

Ansip said the strategy would “prepare Europe to reap the benefits of a digital future” and “give people and companies the online freedoms to profit fully from Europe’s huge internal market”.

The inquiry, originally trailed by EU Competition Commissioner Margarethe Vestager in March, is expected to deliver a preliminary report by mid-2016 and a final report by the end of March 2017.

Internet giants Amazon, Apple and Google have been hit by previous EU investigations targeting individual companies, which have exposed deep divisions between Washington and Brussels on trade regulation.

Unlike those, Wednesday’s probe deals with the entire e-commerce sector in Europe and whether “competition may be distorted within the internal market”.

It will not be able to impose fines except where firms or industry groups provide incorrect or misleading information asked for by the EU.

But it could lead to later cases against specific firms, the Commission said.

Former Danish minister Vestager has taken on a series of anti-trust initiatives since starting the job in November.

She cited the fact that she could not watch her favourite Danish channels on her tablet in Brussels and gave the example of a French tourist who can buy Italian shoes in Rome but has to go through a French website to buy them from home.

More broadly, the EU’s digital strategy unveiled Wednesday aims to break down cross-border barriers such as “geoblocking”.

Geoblocking prevents online consumers seeking cheaper prices abroad for services such as car hire or travel, or stops them using streaming services such as Netflix and BBC iPlayer when they travel.

The EU recognised that some websites employ geoblocking for the legitimate reasons of protecting copyright and ensuring that access to information is restricted only to those who have paid for it.

But it said the tactic also blocks access for some legitimate users, such as people who are blocked simply because they are travelling in another geographic location.

The strategy also deals with issues such as copyright, internet piracy and illegal content, and the use of personal data.

The EU has talked up the economic benefits of a proper digital single market across all 28 countries, especially at a time when the eurozone is still struggling for major growth.

It says it could contribute 415-billion euros ($466-billion) a year and create hundreds of thousands of jobs.

At the moment, only 15% of consumers shop from another EU country and only seven percent of small businesses sell across borders.

For a deeper understanding of the world of money and greater financial control, upgrade to BizNews Premium.