September 24, 2015 / 4:43 PM / 2 years ago

EU launches inquiry into web companies' online behavior

BRUSSELS (Reuters) - The European Commission on Thursday launched an inquiry into the behavior of online companies such as Google, Facebook and Amazon to try to gauge whether there is a need to regulate the web.

The public consultation seeks answers on a broad range of issues, from the contractual restrictions online groups may impose on other businesses, for example, companies seeking to display ads, to how proactive they should be in removing illegal content online.

It is not clear whether the inquiry will lead to any regulation of the Internet in the European Union, but it provides more evidence that mainly U.S. tech companies are coming under increasing scrutiny in Europe for issues ranging from their privacy practices to taxation.

"Platforms are part of a thriving digital economy but questions are also raised about their transparency and use of content," said European Commission Vice President Andrus Ansip, who is in charge of digital issues.

France and Germany have been among those pushing strongly for regulation to allow smaller European start-ups to compete with American tech giants. This prompted U.S. President Barack Obama earlier this year to accuse Europe of taking a protectionist stance.

In the 46-page questionnaire the Commission asks both individuals and companies whether they think platforms are transparent enough in the way they collect and use data.

It also asks app developers, businesses or rights holders if platforms include certain clauses such as "parity clauses" in their contracts with them. Parity clauses require the platform to be offered terms at least as good as those of its competitors.

In June, the Commission opened an antitrust investigation into Amazon's e-book business over allegedly anticompetitive clauses in its contracts with publishers.

But the inquiry launched on Wednesday is not an antitrust probe, meaning it will not result in fines.

As part of the consultation, the Commission is also looking at services such as Google's YouTube by asking holders of the rights to copyrighted works if "an online platform such as a video sharing website or a content aggregator refuses to enter into or negotiate licensing agreements with me."

The industry itself is wary of moves toward regulating the web.

"If there are problems someone will need to be more precise about what exactly they are and why they can’t be dealt with under existing law such as competition, consumer and privacy law,” said James Waterworth, Europe Vice President of the Computer and Communications Industry Association, which represents companies such as Google, Amazon and Microsoft.

Separately, the Commission on Wednesday launched an inquiry into so-called "geo-blocking", the practice whereby businesses restrict access to websites based on location or re-route customers to their local website, which may have different prices.

It aims to come out with a law ending unjustified geo-blocking by mid-2016.

Reporting by Julia Fioretti. Editing by Jane Merriman

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