18/03/2016 BBC Business Live

This is Business Live from BBC News,

with Alice Baxter and Victoria Fritz.

The digital divide, why the European Commission thinks consumers get a

raw deal when they shop online. That is our top

Why it costs you more to buy a download depending on where you

live, we investigate geoblocking. Also, fasten your seat belts because

the trial of two former Portia bosses, -- Porsche bosses.

Here in Europe, shares opening slightly higher on Friday

following gains in Asia and Wall Street overnight.

And we'll be getting the inside track on the $30 billon

tie-up between Deutsche Boerse and the London Stock Exchange.

This mammoth deal - where bankers' fees alone

could total $85 million - will create a European trading

powerhouse to take on the US and Asia.

Our business editor will enlighten us later.

We are also taking a look at dancing yourself happy and the rise of the

sober rave. But without alcohol sales they are having trouble making

money. Let us know what you think, tweet us.

Why should it cost you more to buy an iTunes download

Australian consumers pay almost 40% more for PC games and 52% more

for iTunes downloads than those in the US.

It's down to geo-blocking - a practise used by many big firms

and being investigated by the European Commission.

Preliminary findings of the investigation will be

Geo-blocking actually means geographically-blocking.

It uses the location of your computer -

your IP address - to stop you buying products and services

It's used by many multinational tech giants.

Apple, Microsoft and Amazon all geo-block.

While online streaming services like Netflix have stepped up

geo-blocking, under pressure from the film and TV studios

with whom they strike deals, more

than 50% of online retailers do not sell in other countries.

But Consumers can get round this by using Virtual Private Network

operators to disguise the location of their computers,

operators to disguise the location of their computers.

Simon Neill is the head of UK competition practice at the legal

Good morning. Thank you very much for joining the programme. Why

should it cost you more to buy eggs back Lee the same product elsewhere,

just because of where you are? Even if it doesn't go against the letter

of the law, surely it's against the spirit? I quite agree and the

commission agrees with that as well. What the condition is intending to

do is to look at the reason why products are not going across

countries, why the prices are different, why consumers are getting

a raw deal. That's very much what this is about. This statement coming

out later this morning is very much aimed at showing the commission's

emerging thinking. This is the first time the commission is issuing its

thinking on the commerce inquiry. This will give an indication of the

issues it is uncovering and also what it intends to do about it. Not

only does this potentially lead to price discrimination, it is against

the single market principles of the EU, but it is also restricting

consumer choice, so this is a big story. Correct, it is a big story

that I think we need to temper expectations as to what the

commission will be able to achieve today. I think this is very much a

signpost of where we're going. This is enormously important. It's not

just big companies who do this, small companies too. There are some

real barriers to small companies why they do not easily sell their

products across borders. The result of that is that consumers pay high

prices when we shouldn't do. The whole point of the common market is

that it is a free market across the EU. If someone in Poland is offering

a product for sale, I should be able to go online and I should be able to

buy that product if it is cheaper in Poland than it is over here. I

should have the same rights. There should be no reason why the Polish

operation should not be able to post it to me here in the UK. Why do the

big companies care so much about geoblocking? There was recently a

tie up between PayPal and Netflix. Currently it is very easy to

circumnavigate these geoblocking tactics. If you are relatively

Internet savvy, yes. For most of us, it's not that easy. You are touching

on issues around copyright and licensing. It is a genuinely complex

area and I think today's announcement is not going to touch

the copyright side of geoblocking. It is a very large issue. The

problem with copyright, where you have content which has rights

attached to it, those rights are generally set on a country by

country basis because copyright laws have not been harmonised across the

EU. That is a real problem because without harmonisation of copyright

laws, that allows companies to do geo-blocking. These companies are

not necessarily breaking the law by stopping you being able to go on and

download on iTunes song in France for example rather than the UK. So

to what extent is geo-blocking currently susceptible to challenge

in the court of justice? At the moment lawful geo-blocking based on

copyright is difficult to challenge. At the moment there is a grey area

where pay-TV services and streaming services, it is being investigated.

Sky and a number of Hollywood studios are locked in a big battle

with the European Commission around content and content rights. That is

whether the contractual restrictions on the likes of the broadcasters go

too far and artificially direct absolute barriers to stop

broadcasters from selling content lets say to a different country.

There I think the commission will make progress and that is the

exciting area coming up later on this year. Really good to talk to

you, thank you. Simon Neil, head of the UK competition practice at the

legal firm Osmond Clarke. Russia's Central bank is expected to

leave interest rates on hold at 11%. It is being forced to crank up rates

to try Douzable the ruble, which has plunged amid slumping oil prices and

sanctions over Ukraine. Analysts say that the recent recovery in crude

prices to around $40 a barrel could mean a return to stability for

Russia's crisis hit economy. The latest data out of China shows that

house prices rose 36% compared to a year ago, despite slowing economic

growth and the value of property is rising at its fastest rate in nearly

two years. Shares are up in Toshiba? It's a

very interesting story here and it has been pretty bumpy ride for

Toshiba in the last few days. They have closed up more than 4% today.

Yesterday they were down as much as 10%. A couple of key events

affecting this company. On the positive side they have sold their

medical device unit for close to $6 billion and that is good news

because Toshiba has been hit by a massive accounting scandal. That has

led to big job cuts and big losses, so bringing in some cash is welcome.

At the same time, this company has just confirmed that its North

American units are being looked at by US authorities over accounting

issues. That has to be a concern especially when you look at the

impact of accounting scandals have already had on the company in Japan.

Well, let's stay in Asia where stocks advanced on Friday

as higher prices for commodities, including crude oil,

pushed Wall Street stocks higher overnight.

But shares in Tokyo fell as the Yen's strength worried

Japanese government bonds rallied on Friday with 10-year

and 20-year yields hitting fresh record lows after strong results

at the Central Bank's bond-buying operations.

It's the first time since 1980 that the 10-year yield's fallen

below the bank's policy rate, currently at minus 0.10%.

Meanwhile here in Europe, shares opening slightly higher

on Friday following those gains in Asia and Wall Street overnight.

And Michelle Fleury has the details about what's ahead

2016 got off to a rocky start for the markets. After the US Federal

reserve signalled fewer rate hikes this year. With oil closing above

$40 a barrel on Thursday, stocks have turned positive for the year.

For many investors, the question is, how long will this last? Given the

enduring uncertainty about the state of global growth. Meanwhile the US

dollar 's slide this week couldn't come soon enough for one company,

for Tiffany and Coke, the luxury jeweller which relies on tourism for

a chunk of its sales. They report fourth-quarter earnings this Friday.

The rising dollar has made shopping trips to its flagship Manhattan

store that bit more expensive for those using other currencies. A drop

in tourism coupled with a tough retail environment is expected to

have cut into its sales. Joining us now is Richard Fletcher, the

business editor at the time newspaper group. Good morning and

welcome to the programme. Thank you. Let's talk about oil. Limes for the

fifth straight week. We are seeing above the $40 a barrel mark. -- it

climbs. Russia are trying to work out their interest rate decision

today. Not necessarily great news for everyone. A rise in oil used to

be bad news particular for equity markets because it was seen as

pushing up costs and that would hit company profits, but actually we

have seen oil fall to these near historic lows. It has started to

rise and markets have taken this as good news. Markets have moved up in

lockstep with oil, which is very different to what we used to see.

Oil has risen, it is now above $40. It hit $27 in January, a massive

load. It's seen as good news, it's seen as slightly more stable, it

makes the world more stable. Bizarrely, with oil rising we

actually seek equity prices move up, which is against the historic trend,

basically. It is good news, it does suggest we are moving towards more

stable times even though it does mean that you probably pay a bit

more at the petrol pumps for our petrol. Fascinating to see how it

plays out in Russia because the central bank keep playing down the

cost of oil that is required to balance the books over there. Over

the past couple of weeks there has been a flurry of activity in central

banks. We have had ten days of major announcements from all corners of

the globe. I suppose the best way to describe it is that we have emerged

unscathed! We've had the ECB paying their larval by delivering which we

thought they would. That has given emerging markets a

huge boost because obviously the fear was that as the federal bank

pushed up rates, money would move act from emerging markets into the

US. But it has been a great week in Asia. Markets. Chinese markets up

about 6% over the week. It's been a good week and the central banks have

done their bit, if you like. It could have been a lot more volatile

for the last ten days. Just before you go, very quickly. You said

doves... It's a terrible term but it basically means they're not going to

raise rates quickly. There goes been more peaceful, if you like. There we

go, peaceful doves! Still to come, the 30 billion tie-up

to create a multi-million dollar trading powerhouse to rival the US

and Asia. Here in the UK, the cost of fraud

appears to be rising. A report out today from financial forward action

UK says financial fraud is on the up. -- financial fraud action.

Morning, guys. A big rise over the last year despite all those attempts

to reduce fraud. That is partly because more and more of us are now

doing our banking and financial transactions online and not in

person at the banks, so that has contributed to a big rise in fraud.

It's up about 25% over the last year, to ?755 million. A staggering

amount of money if you also think that the banks have been trying to

tackle this tampering that number down. A large proportion of that is

coming from card fraud, up itself by about 18% to about half ?1 billion.

A staggering number and one that seems like it might grow and grow.

One expert that I talked to said one of the simplest and easiest ways,

when you login to your bank account to create a new payee, there should

be a delay of 24 hours. One login gives you access to many of the

accounts that you hold with one bank and that opened us up to much more

fraught than perhaps it would do if we were just carrying one card or

cheque-book around. A big rise but one that the banks say they are

taking seriously but these figures suggest they are struggling to keep

a lid on it. I have another set of figures, the

Government says that home-buyers are losing out on failed property

transactions, can you tell us more? You find a house you want to buy,

you do the survey sample legal fees, everything to get to the point where

you are ready to buy, then the purchase falls through. We are told

that that cost ?270 million in England and Wales Lestienne, money

that gets you nowhere and you don't even buy the house, and that is on

top of record sale prices up and down the country. Then, thank you

very much. This story has just appeared from

our personal financial porter Brian Milligan, writing about rail

passengers saying they should get help with compensation. 20 more on

the website. This affects millions of people up and down the country,

using the train to get to work. Our top story - why it costs

you more to buy an iTunes download The European Commission publishes

findings of its investigation into e-commerce and the

practise of geo-blocking. A staggering 11 banks and 30 bankers

slaved away to seal the $30 billon tie-up between Deutsche Boerse

and the London Stock Exchange Group. The deal creates a European

trading powerhouse. Simon Jack, our business editor,

joins us in the studio. Simon, really good to see you. And

congratulations on the new role, I am not sure we have had US business

editor? This is my first time. Congratulations. And I correct you

immediately? I am only joking! To seal the deal, the interesting

thing... The deal is not sealed. The big question is whether simply else

will come into by the London stock exchange, because this Deutsche

Boerse LSE merger is a merger of equals. They came together, it would

be the world peers biggest trading group and the question is whether

somebody else will come in. The other interesting thing, it is a

Frankfurt -based company buying one in London. We have a referendum

about whether the UK remains part of the EU around the corner. Some of

those who want us to leave are making a bit of hay out of this,

they are saying, come what may, we will do this deal and it shows there

is life on the other side. The shareholders have to vote before the

referendum? Correct. The parties say, we don't care what the outcome

is, there is probably an asterisk somewhere which says we will have to

reconsider if the UK decides to leave. So was Deutsche Boerse

devolving some sort of financial power to London or is it, in fact, a

strategic move to make sure that London has a foothold in Frankfurt

should... I see! So the politics are interesting. It is the third time

they have tried to merge. Is this about cost savings or attracting

business from other potential rivals? It is about scale, it is to

defend against people in the US and compete against Asia. You would have

much more listing, many more customers. The argument for

customers is that if you clear trades through Frankfurt or London

you had to put up a margin in case anything goes wrong. If you combine

them, it would be a bit smaller, you would save money. Picking up on that

thought, the chief executive of the LSE was saying that the deal would

provide an alternative to bank lending for millions of small and

medium-sized businesses across Europe, it is economies of scale and

the fact that trades can be cleared through? The question would be... It

is being billed as a merger of equals but it is not quite. If it

was a takeover there would be a huge premium on the London stock

exchange, we have a bit of a premium but not massive, it will be 54%

owned by Deutsche Boerse but headquartered in London. The current

boss of Deutsche Boerse would be the new chief. See you can argue whether

it is equals or not. And a question on Porsche, one of your top stories,

market manipulation, it's former bosses are being accused of, over

failed attempted over Volkswagen. This is worthy of a German opera!

The team are good people in the dock today, if you like, they have built

up a position in Volkswagen shares with options to buy many more, they

then announced the fact that they would do this Volkswagen -- they

would do this, then Volkswagen shares shot up a lot, they were

worth more than Exxon at one point. Then it was announced that the

funding that background the funding dried up. In the end, Volkswagen

ends up buying Porsche, but the Porsche ruling family owned 51% of

what gain, worthy of a soap opera. 88% of VW shares today are held by

three entities, 51% owned by the Porsche family. Do you think a

situation like that could have contributed to the other big German

diesel scandal going on, and the fact there are not enough critical

voices on board? The way that VW is run has come under scrutiny, they

have a weird, shudder we'd supervisory board. It is not a

normal company. That has all come to light to the diesel situation, you

saw the US boss standing down, they appointed another insider, nobody

was very satisfied, it is a big mess. What will the final act be?!

Simon, really good to talk to you. More on this saga.

Germany awaits the court's verdict in a scandal that's engulfed one

of the biggest names in the country's vast car industry.

Damien McGuinness explains Porsche's complicated

Porsche, the company, is the majority shareholder of VW. As you

mentioned, diesel gate has already had them hard, so the last thing

needed is another scandal, which is why VW and the Porsche family hope

for an innocent verdict. It has to be remembered that charges like this

of market manipulation are incredibly difficult to prove, in

most cases there is no prosecution after such an investigation because

it is difficult to prove market manipulation like this.

Damien McGrane is. Let's look to some of the reaction on social

media. We have had tweets in about the geoblocking story covered at the

top of the hour. Gaby has said that geoblocking pushes consumers to

finding illegal ways to find content, there is an illegal market,

fact, no denying it. Phil Brisas says geoblocking is

fuelling hacking and illegal activities. The measure should be

set to benefit all. Interesting debate.

Richard Fletcher is back to look at other stories. Intercontinental

exchange wants to shake up the libel situation. Libor is an important

measure which sets the rate for 350 trillion derivatives or some

enormous number. It is basically the interest rate that people use for

these contracts. It was at the heart of the fixing scandal around the

time of the financial crisis. There were huge fines on the bank and

traders for fixing Libor. There were suggestions that some of the central

banks had tried to nudge the Libor rates down. It used to be set by

somebody literally picking up the phone and asking somebody else what

the rate was. That is when the British bankers Association in

London was responsible for setting the rate. The responsibility has

passed over to ICT, they are looking at a different way. It was an

algorithm, is the best way to describe it. In 2012 a regulatory

review found that that devious raid was not fit for purpose. And before

we go, we have to ask you about dancing yourself happy, the rise of

the sober rave. Would you go in for this? I am not sure if I would love

it or hate it, you arrive and are greeted by Huget angels who hug you,

it is 9:30am, there is a super food bar, yoga and massages. Increasingly

big business. The difficulty to make it profitable is that they are not

making money from selling alcohol. Reportedly, teenagers these days are

not drinking alcohol or wanting to go to nightclubs. Today's teenagers

are very responsible, lots of them don't drink, or take drugs and

unwanted pregnancy rates are down. They are much more responsible than

we are. -- we were. There will be more business news

throughout the day on the BBC Live web page and on World Business

Report. After the sunshine across much of

the country yesterday, today brings a more cloudy and cool picture. We

start the day