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EU competition authority opens three e-commerce investigations

Some consumer electronics manufacturers, hotels, tour operators and video game platforms and publishers are being investigated by the European Commission over "suspected anti-competitive practices".06 Feb 2017

The Commission has opened three separate investigations into companies operating in the consumer electronics, video games and hotel markets on Thursday.

The Commission, main EU competition regulator, said it wants to "gather market information in order to better understand the nature, prevalence and effects of [barriers to cross-border online trade] … and to assess them in light of EU antitrust rules".

The probe into consumer electronics manufacturers will involve an assessment of agreements put in place by Asus, Denon & Marantz, Philips and Pioneer. The Commission said it has concerns that the companies have been "restricting the ability of online retailers to set their own prices for widely used consumer electronics products such as household appliances, notebooks and hi-fi products".

The Commission is also looking into agreements reached between five PC video game publishers, Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax, and Valve Corporation, which owns the 'Steam' platform through which many games are distributed. It said it has concerns about 'geo-blocking' practices. Geo-blocking refers to restrictions placed on access to online services and content on a geographic basis.

"After the purchase of certain PC video games users need to confirm that their copy of the game is not pirated to be able to play it," the Commission said. "This is done with an 'activation key' on Valve's game distribution platform, Steam. This system is applied for a wide range of games, including sports, simulation and action games."

"The investigation focuses on whether the agreements in question require or have required the use of activation keys for the purpose of geo-blocking. In particular, an 'activation key' can grant access to a purchased game only to consumers in a particular EU member state (for example the Czech Republic or Poland). This may amount to a breach of EU competition rules by reducing cross-border competition as a result of restricting so-called 'parallel trade' within the Single Market and preventing consumers from buying cheaper games that may be available in other member states," it said.

With its third investigation, the Commission is looking into alleged price discrimination based on the location of consumers. It is investigating deals reached between four tour operators, Kuoni, REWE, Thomas Cook, TUI, and hotel group Meliá Hotels.

"The Commission welcomes hotels developing and introducing innovative pricing mechanisms to maximise room usage but hotels and tour operators cannot discriminate customers on the basis of their location," it said. "The agreements in question may contain clauses that discriminate between customers, based on their nationality or country of residence – as a result customers would not be able to see the full hotel availability or book hotel rooms at the best prices."

"This may breach EU competition rules by preventing consumers from booking hotel accommodation at better conditions offered by tour operators in other member states simply because of the consumer's nationality or place of residence. This would lead to the partitioning of the Single Market," it said.