×

US tech giants are in the EU’s crosshairs…again

Online companies such as Facebook and Google will face a wide-ranging review of how they use their dominant market positions in Europe while tech firms could soon be forced to harmonize their products across the 28-country European Union, officials said on Wednesday.

The European Union's (EU) "comprehensive" analysis is not a formal antitrust investigation but will cover topics such as the transparency of search results and pricing policies, how they use the data they acquire, and promotion of their own services to the disadvantage of others, the European Commission, the EU's executive arm said.

If issues arise during the review then further action can be taken.



Dursun Aydemir | Anadolu Agency | Getty Images

European regulators have recently been locked in battle with U.S. tech companies and in particular Google, which it accused of abusing its dominant market position and filed antitrust charges against.

The decision was announced as the EU unveiled its plan for a so-called "Digital Single Market" strategy – an attempt to harmonize rules on the internet across the 28 EU member states. The raft of measures is extensive and covers topics from telecoms to copyright law.

Netflix everywhere?

Currently there are different rules across the EU from e-commerce to TV righ ts. If there were a common set of rules, it could add around 415 billion euros ($465.8 billion) per year to the bloc's economy, according to Commission.

One of the most significant proposals is an end to a practice known as "geo-blocking" – where companies deny access to their website based on a user's location. A company like Netflix for example might not let a viewer in Italy see a program it is running in Germany. This however, could raise issues around licensing deals in place in different EU countries.

"Mandating pan-EU access would interfere with the business interests that have led to territorial licensing and geo-blocking, so the impact such a reform would have should be properly considered," Adam Rendle, senior associate in the Media and Entertainment industry group at law firm Taylor Wessing, said in an email.

"It would be counter-productive to introduce a reform which would make it more difficult to finance creativity in future."

E-commerce probe

In a move that could give a boost to small and medium-sized companies shipping goods across Europe, another proposal includes tightening rules on e-commerce and ensuring the price of parcel deliveries is not "excessive" across different countries.

The EU also wants to improve legislation in the area of copyright so that people buying an online service in their home country, can use it in other EU member states.

An "ambitious overhaul" of the bloc's telecoms rules were also outlined and included co-ordination on managing the radio spectrum and a continued push to end roaming surcharges across the continent.

The Commission proposed a so-called "European free flow of data initiative" to remove the barriers stopping member states sharing data with each other. The EU claims the data is a "goldmine for research, innovation and new business opportunities" but is often stuck in "expensive" national data centers.

"The scale provided by a completed Digital Single Market will help companies to grow beyond the EU internal market and make the EU an even more attractive location for global companies," the Commission said in a statement.

And finally, the Commission also launched an anti-trust inquiry into the e-commerce sector on Wednesday to investigate the barriers to cross-border online retailing after originally announcing its intention in March. No specific companies were named in the probe.