Online retailers may be in breach of EU laws

The European Commission has warned online retailers they could be in breach of EU anti-competition legislation by refusing to sell goods and digital content to consumers living abroad.

It follows the preliminary findings of a major new study which revealed the problem of geo-blocking is widespread across the EU.

The report found most companies who engage in the practice make a unilateral decision not to sell to consumers abroad. However, some firms cite contractual obligations for preventing consumers from shopping online across EU borders.

Research conducted among more than 1,400 retailers and digital content providers from all 28 EU member states established that 38% of companies selling consumer goods and 68% of digital content providers geo-block consumers located in other countries.

They related to the sale of goods such as clothing, electronics, computer games, books, CDs and DVDs, and sports equipment, and digital content including TV box sets, films, music, and news.

One in 10 firms said they had contractual obligations which prevented them from engaging in cross-border sales.

In Ireland, 56% of online retailers said they did not sell cross-border for at least one of their product categories.

The study was conducted as part of an ongoing antitrust sector inquiry in the e-commerce sector.

Although more and more goods and services are traded over the internet, cross-border online sales within the EU are only growing slowly. While more than 50% of adults in the EU shop online, only 18% bought goods or content from a seller based in another EU member state. Some 30% of Irish consumers said they had bought online from a foreign supplier.

Many Irish consumers are unable to purchase goods from distributors in the UK because they refuse to ship products to the Republic.

A European Commission spokesman said the report did not prejudge the finding of any anti-competitive concerns or the opening of any anti-trust cases.

Clothing and shoes, consumer electronics and sports and outdoor equipment were the products most likely to be geo-blocked due to contractual restrictions, according to the EU report.

In terms of digital content, the majority of providers of television, films, and sports content reported they were contractually obliged by suppliers to restrict sales to consumers in other countries.

Most retailers relied on the IP address of users to verify their location.


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