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THE COMMISSION PUBLISHES ITS PRELIMINARY FINDINGS CONCERNING GEO-BLOCKING PRACTICES IN THE EU

geo-blockingOn 18 March, the Commission has published its preliminary findings regarding geo-blocking in the EU. They demonstrate that practices whereby consumers are prevented from purchasing goods and accessing digital content online are widespread in the EU and may trigger competition concerns. This analysis forms part of the competition e-commerce sector inquiry launched in May 2015.

In line with the Commission’s initial findings, geo-blocking practices are implemented by 38% of the retailers selling consumer goods (e.g. clothing, shoes and accessories, consumer electronics, computer games and software, books) and by 68% of the online digital content providers that participated in the inquiry.

Regarding retailers, they submitted that geo-blocking is facilitated through location related information that they collect from users, such as IP addresses or credit/debit card information. Geo-blocking occurs through refusing to deliver abroad (27%), refusing to accept payment (22%), re-routing customers to other EU MS (10%), or preventing access to a website (5%). It was also reported that geo-blocking is primarily the result of retailers’ unilateral business decisions, and, to a lesser extent, of contractual restrictions to sell cross-border.

The second group of respondents, online digital content providers, claimed that geo-blocking is implemented based on the IP addresses of the users. According to the majority of the respondents, such practices are contractually required by suppliers.

As indicated in the press release, geo-blocking linked to agreements between suppliers and distributors may restrict competition in breach of EU rules. At the same time, ‘if geo-blocking is based on unilateral business decisions by a dominant company not to sell abroad, such behaviour by a non-dominant company falls clearly outside the scope of EU competition law’. The findings outlined above do not imply, however, that specific competition concerns have been identified. The Commission will present a more comprehensive analysis of e-commerce markets in its Preliminary Report scheduled for mid-2016, and in the Final Report at the beginning of 2017.

Source: European Commission

(Klaudia Majcher)

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