Next on Commission target list: Amazon, Netflix

The American firms will soon face questions as part of an extensive antitrust probe into the e-commerce sector.

Signalling its priorities, the European Commission has said investigators will begin questioning Amazon and Netflix next month as part of an extensive antitrust probe into the e-commerce sector.

“Obviously the big video-on-demand providers will be targeted,” said Thomas Kramler, an Austrian lawyer who was appointed to lead the inquiry. He also played a key role in antitrust cases against Google and Intel.

“[We will] ask them about the restrictions, if any, that are in place, but also data about catalogues and pricing data as far as we can get them,” he added.

Amazon declined to comment. Netflix did not respond to a request for comment.

Speaking at the Global Competition Law Centre in Brussels on Friday, Kramler emphasized that the inquiry into a long list of companies was a “fact-finding exercise” although it could trigger antitrust cases.

He suggested that about a third of the task force’s time would be spent investigating the online market for content, and just under half of the effort would be focused on the online distribution of clothing, shoes, accessories and electronics.

The Commission will also scrutinize the licensing deals of Europe’s sports sector and music industry, probing how they stop content from being sold or broadcast from one member state to another.

The inquiry into the e-commerce sector, announced in March, is part of the Commission’s wider efforts to galvanize Europe’s digital market, which is often fragmented along national borders. The Commission expects to publish a final report in early 2017. Antitrust cases, which tend to take several years to complete, may follow.

The primary goal of the probe is to sniff out contracts and company practices that have restricted cross-border sales online. Territorial licensing and international price spreads will be under the magnifying glass, as well as overly restrictive distribution agreements.

The task force will report to Guillaume Loriot, a director responsible for competition in the information, communication and media sectors. He was the deputy head of cabinet for Joaquín Almunia, the predecessor of the current commissioner for competition Margrethe Vestager.

E-commerce in the European Union accounts for around €200 billion in sales, representing just seven percent of all around retail sales in the EU.

James Webber, a partner at Shearman & Sterling, warned that the inquiry would entail “material costs” for the companies quizzed by the Commission.

Lawyers have made clear their frustration at the length of time required to deal with previous antitrust inquiries into the energy, financial services and pharmaceutical sectors. The Commission’s probe into the energy sector, for example, quizzed over 2,000 companies, while the more limited probe into the pharmaceutical sector requested significant amounts of data from about 100 companies.

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