June 24, 2015 / 8:56 PM / in 2 years

EU quizzes e-retailers on sanctions against cross-border online sales

BRUSSELS (Reuters) - EU antitrust regulators have asked e-commerce retailers to spell out the kind of sanctions imposed on them for going against digital content companies’ orders to restrict cross-border online sales, as part of a broad probe to root out anti-competitive online practices.

The European Commission, which launched the investigation last month, is looking to overhaul the 28-country bloc’s digital market to boost growth and innovation and catch up with the United States and Asia.

The e-commerce probe came after data showed only 15 percent of EU consumers bought a product online in another EU country due to the language, different laws and anti-competitive practices.

U.S. online retailers Amazon, e-Bay, video-streaming service Netflix, booking.com and traditional retailers are expected to be covered by the sector-wide investigation.

Questionnaires sent out to some companies last week asked about the types of sanctions levied by producers and distributors of news, music, films and TV shows for not complying with their territorial clauses.

“Please identify in the table below whether your current agreements with those suppliers contain any provisions as regards the supplier’s right to suspend distribution of its service and/or demand compensation in the event of non-compliance,” said a questionnaire seen by Reuters.

Regulators also wanted to know whether technical restrictions such as IP address blocking based on the customer’s location and blocking based on the credit card billing address were set out in agreements with the producers and distributors.

Respondents have been told to reply by the end of July to the more than 150 questions. The Commission aims to issue a preliminary report in mid-2016 and a final report in the first quarter of 2017.

Antitrust experts say this could lead to regulators opening cases against specific companies in line with other sector enquiries in the pharmaceutical, energy and financial services industries in the last decade.

Reporting by Foo Yun Chee

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