Why is the EU pushing for restrictions on Netflix and Amazon?

The European Commission introduced proposals Wednesday requiring streaming sites to fund European films and TV shows and ensuring users get equal access to online shopping.

Claude Paris/AP/File
The cast of the series 'Marseille,' the first TV series produced by Netflix in France, poses in Marseille, France. Under proposals introduced Wednesday by the European Commission, the streaming video service would have to contribute a portion of its revenue to fund French film and TV productions.

Online retailers would be required to treat customers across the European Union equally, regardless of where they live, under a sweeping set of changes proposed by the EU's executive body on Wednesday.

Streaming services such as Netflix would also be required to help fund the production of European-made films and TV shows under another proposal introduced by the European Commission.

The proposals, including the effort barring retailers such as Amazon and eBay from "geoblocking," or limiting services to a particular region, are part of an effort by the Commission to create a "digital single market" that improves the online shopping experience for consumers across the bloc.

"All too often people are blocked from accessing the best offers when shopping online or decide not to buy cross-border because the delivery prices are too high or they are worried about how to claim their rights if something goes wrong," said Andrus Ansip, vice president for the commission's digital single market strategy, in a statement.

The online shopping proposal would stop e-commerce sites from automatically re-routing customers to the home version from their country without their consent or blocking their access completely, Reuters reports. For streaming video sites, 20 percent of their content would also be required to be European.

But the companies argue that many of these plans are already in place. Amazon makes its online marketplace available to customers across Europe, while the company says 98 percent of its own items are available to shoppers from across the region.

On Netflix and iTunes, the amount of European films available is currently 21 percent, above the EU's proposed threshold, according to the regulator. Netflix has repeatedly objected to the new rules.

"The focus of European audiovisual media policy should be on incentivizing the production of European content and not imposing quotas on broadcasters," the company wrote in a public response last year to the EU's proposal.

While French regulators had pushed to get companies like Netflix to contribute to the country's efforts to promote domestic films and TV shows, Netflix has instead focused on making its own original programs independent of the government, the Wall Street Journal reports.

It recently introduced "Marseille," an originally produced political drama starting Gérard Depardieu.

"We appreciate the Commission's objective to have European production flourish, however the proposed measures won't actually achieve that," Netflix said in a statement Wednesday.

Under the EU's plan, Netflix could have to contribute between 15 and 26 percent of its French revenue to the government-backed effort to support film and TV production. Other countries have similar schemes, but France's would carry the largest financial penalty for the streaming video site, the Journal reports.

The European Commission has sought to stake out a middle path between the companies' concerns and those of countries such as France, which has pushed for stricter regulations on Web companies in a number of areas.

The Commission's proposal for online shopping currently includes an exemption for some products, such as music, games, and e-books, because they are protected by copyright. But the commission says it may review that proposal in the future.

Separately, the EU also introduced an effort to improve transparency on shipping prices for online items shipped from one country to another.

The proposals, which must be approved by the European Parliament and national governments before they become law, are intended to extend more consumer protections to the world of e-commerce.

"When a consumer enters a shop in another EU country, the owner does not ask for the consumer's ID in order to accept a purchase or to adjust the price or conditions. But in the online world, all too often consumers are blocked from accessing offers in other countries, the commission said in a statement. "Such discrimination has no place in the Single Market."

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