EU plans antitrust probe into Amazon, Netflix, and other digital commerce players

The European Commission announced today the start of a year-long probe into whether e-commerce giants such as Amazon and Netflix have policies that restrict the ability of merchants and consumers to buy and sell goods and services across Europe’s borders.

“It is high time to remove remaining barriers to e-commerce, which is a vital part of a true Digital Single Market in Europe,” said EU competition commissioner Margrethe Vestager in a statement. “The envisaged sector inquiry will help the Commission to understand and tackle barriers to e-commerce to the benefit of European citizens and business.”

Confirmation of the probe comes one day after a broader announcement about the EC’s plans for a Digital Single Market.

The EC is taking a two-step approach toward trying to make European companies more competitive with U.S. tech companies.

The first step is to create a common set of rules around areas such as viewing digital content, privacy, cellular communications to reduce roaming costs, and shipping goods across borders. Not only are these a headache for consumers, but EC officials argue that they slow growth of European startups who have to figure out different sets of rules and regulations as they expand across the continent.

“Let us do away with all those fences and walls that block us online,” said EC vice president for the Digital Single Market Andrus Ansip in a statement yesterday. “People must be able to freely go across borders online just as they do offline. Innovative businesses must be helped to grow across the EU, not remain locked into their home market.”

The second part of this strategy, however is even greater regulatory scrutiny of incumbent tech giants, which in most cases means U.S.-based companies like Google, Facebook, Uber, Amazon, and Apple. To some degree, each of these players finds themselves facing probes involving taxes, anti-trust allegations, privacy issues, or the basic legality of their services.

In the new e-commerce probe, EC is looking at how companies themselves may be creating roadblocks to letting consumers buy goods online across the region.

The official statement announcing the probe highlighted the fact that while half of all EU consumers bought something online last year, only 15 percent of those purchases came from a seller located in a different European Union member state. The EC is concerned that companies may be preventing consumers in one country from seeing websites in other countries using “geo-blocking” technologies.

In a speech in Berlin, the commissioner seemed to point the finger at companies such as Amazon and Netflix, which may limit which deals, movies, and content users can view depending on where they are located.

“Geo-blocking prevents consumers from accessing certain websites on the basis of their nationality, residence, or credit-card details,” she said. “I, for one, cannot understand why I can watch my favorite Danish channels on my tablet in Copenhagen – a service I paid for – but I can’t when I am in Brussels. Or why I can buy a film on DVD back home and watch it abroad, but I cannot do the same online.”