EC probe into murky cross border e-commerce kicks off

Why can't I get that lower price on the Amazon site in the country next door? Eh?

The EU’s executive arm has officially launched its probe into the e-commerce sector to find out why Europeans aren’t buying across national borders much.

The eCommerce investigation, which was announced in March, aims to identify and stamp out regulatory barriers to crossborder e-commerce. Over the next few weeks, the Commission will send “polite requests” for information to “a range of stakeholders”. But if it wanted to it could strong-arm anyone it likes, forcing online retailers (such as, say, Amazon or eBay) to hand over detailed documents or statements.

As part of a sector inquiry, the Commish can also carry out inspections and “fines may be imposed on businesses and industry associations that supply incorrect or misleading information” it warns.

Questionnaires will be sent to companies ranging from content rights holders, broadcasters, and manufacturers to merchants of goods sold online and the companies that run online platforms such as price-comparison and marketplace websites.

According to the Commission figures, despite half of all EU consumers shopping online, only 15 per cent of them bought from a seller based in another EU country. Competition Commissioner Margrethe Vestager said:

“European citizens face too many barriers to accessing goods and services online across borders. Some of these barriers are put in place by companies themselves. With this sector inquiry my aim is to determine how widespread these barriers are and what effects they have on competition and consumers. If they are anti-competitive we will not hesitate to take enforcement action under EU antitrust rules."

But the trade sector was quick to point out that it often faces other, sometimes regulatory barriers such as VAT and contract law. Christian Verschueren, Director-General of EuroCommerce said:

“We support putting an end to unjustified geoblocking, but rerouting consumers often happens for legitimate reasons and for the benefit of consumers. European retailers need simple and clear rules, providing legal certainty and encouraging them to offer goods cross-border.”

A competition probe cannot take these issues to task and will look purely at barriers “set up by companies”. However, the Commish did also promise to take a look at the VAT regime among the many other things it will investigate as part of the Digital Single Market proposal.

Preliminary findings in the e-commerce probe are expected in mid-2016. ®