European Commission launches multiple price discrimination probes

The European Commission launched three separate investigations on Thursday, to assess if certain online sales practices breached EU antitrust rules, and prevented consumers from enjoying cross-border choice.

It said it was looking into the practices of certain businesses in the consumer electronics, video games and hotel reservations fields.

In consumer electronics, the EC confirmed it was investigating whether Asus, Denon & Marantz, Philips and Pioneer breached EU competition rules by restricting the ability of online retailers to set their own prices for products such as household appliances, notebooks and hi-fi products.

The effect of these suspected price restrictions may have been aggravated, it said, due to many online retailers using pricing software that automatically adapted retail prices to those of leading competitors.

As a result, the alleged behaviour may have had a broader impact on overall online prices for the respective consumer electronics products.

For video games, the EC said it was investigating bilateral agreements concluded between Valve Corporation - owner of the Steam game distribution platform - and five PC video game publishers - Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.

The investigation concerned geo-blocking practices, where companies prevent consumers from purchasing digital content because of the consumer's location or country of residence.

After the purchase of certain PC video games, users needed to confirm that their copy of the game was not pirated to be able to play it, using an ‘activation key’.

The investigation was focusing on whether the agreements required the use of activation keys for the purpose of geo-blocking, with an ‘activation key’ only granting access to a purchased game to consumers in a particular EU member state.

The commission said that may amount to a breach of EU competition rules by reducing cross-border competition as a result of restricting parallel trade within the single market, and preventing consumers from buying cheaper games that may be available in other member states.

In its statement, the commission confirmed it was carrying out the first two investigations on its own initiative.

Finally, the third investigation concerning hotel price discrimination was launched following complaints from customers.

The EC said it was investigating agreements regarding hotel accommodation concluded between the largest European tour operators on the one hand - namely Kuoni, REWE, Thomas Cook and TUI - and Meliá Hotels on the other hand.

It said it welcomed hotels developing innovative pricing mechanisms to maximise room usage, but warned that hotels and tour operators could not discriminate customers on the basis of their location.

The agreements in question may have contained clauses that discriminate between customers based on their nationality or country of residence, the EC alleged, with the result being customers would not be able to see the full hotel availability or book hotel rooms at the best prices.

That could be a breach of EU competition rules, as it would prevent consumers from booking accommodation at better conditions offered by tour operators in other member states, leading to the partitioning of the single market.

“E-commerce should give consumers a wider choice of goods and services, as well as the opportunity to make purchases across borders,” said commissioner in charge of competition policy Margrethe Vestager.

“The three investigations we have opened today focus on practices where we suspect companies are trying to deny these benefits for consumers.”

Vestager said although more goods and services were being traded over the internet worldwide, cross-border online sales within the EU were only growing slowly.

“The Commission's Digital Single Market Strategy identifies a number of regulatory barriers that hinder cross-border e-commerce and proposes different initiatives to address these.

“However, there are also indications that businesses may themselves establish barriers to cross-border online trade, with a view to fragmenting the EU's Single Market along national borders and preventing competition.”