EU Attacks Online Content Curbs Thwarting Cross-Border Sales

  • Report shows so-called geo-blocking is widespread in EU
  • Findings bolster case for antitrust action, EU watchdog says

Cross-border sales of movies, TV shows and other online content are routinely blocked by contractual restrictions, European Union antitrust regulators warned in a report bolstering their moves to knock down barriers consumers face to buying on the Internet.

Geo-blocking, when websites refuse to serve customers outside a selected country, is widespread, the European Commission said Friday, based on responses from 1,400 retailers and digital content providers. While retailers often choose not to sell abroad, some 59 percent of content providers said suppliers’ contracts force them not to.

"Where geo-blocking occurs due to agreements, we need to take a close look whether there is anticompetitive behavior, which can be addressed by EU competition tools," EU Competition Commissioner Margrethe Vestager said in an e-mailed statement.

Geo-blocking is seen by regulators and lawmakers as an anachronism in the EU, which has long championed the free movement of workers and capital across its internal borders. Antitrust regulators are currently examining whether Hollywood studios’ contracts with pay-TV broadcasters unfairly prevent sales to customers outside one country. Companies cite licensing rules as requiring them to sell content differently to each country.

The EU saw fewer problems with retailers of physical goods where only 12 percent say contracts prevent them from selling abroad for at least one type of product. Most choose not to deliver abroad, refuse foreign payment methods or re-route website access to deter consumers outside their home country. Some 38 percent of retailers and 68 percent of digital content providers use some type of geo-blocking to wave away foreign sales, the EU said.

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