Cross Border Commerce

EU Regulators May Launch X-Border eCommerce Investigation

There appears to be some dirty pool taking place over eCommerce between countries in the European Union, and antitrust regulators might be taking action to sort it out.

The New York Times reports that the European Commission, following a year-long inquiry of cross-border eCommerce related to electronics, clothing, shoes and digital content in the 28 countries that make up the European Union, has determined that two out of three online content providers within that bloc prevent consumers from other EU countries from buying their products or services.

When this practice — also known as geoblocking — is a unilateral decision made by retailers, explains NYT, it does not constitute an antitrust violation. However, what the EU competition authority is considering opening an investigation on relates to the 12 percent of retailers in the EU that report to be contractually prevented from engaging in cross-border eCommerce (in at least one product category).

“Where a nondominant company decides unilaterally not to sell abroad, that is not an issue for competition law,” stated European Competition Commissioner Margrethe Vestager, who, NYT notes, plans to publish a preliminary report on geoblocking and other hindrances on eCommerce in the EU later this year, with the final report to come in Q1 of 2017.”But where geoblocking occurs due to agreements, we need to take a close look whether there is anticompetitive behavior, which can be addressed by EU competition tools.”

The NYT story adds, however, that some experts believe it will not be easy for the European Commission in its investigation to provide hard evidence of anticompetitive practices, with Bernd Meyring, a partner at law firm Linklaters, telling the outlet: “Where digital content is geoblocked, this can often be a result of national intellectual property rights. Assessing whether this is a genuine concern or a pretext to separate the internal market is a delicate exercise in each of these cases.”

“Given all the limitations of existing tools, legislation would be a far more appropriate tool to deal with the issue than trying to use an imperfect tool box,” added Meyring.

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