:00:00. > :00:00.This is Business Live from BBC News,
:00:07. > :00:16.with Alice Baxter and Victoria Fritz.
:00:17. > :00:22.The digital divide, why the European Commission thinks consumers get a
:00:23. > :00:23.raw deal when they shop online. That is our top
:00:24. > :00:50.Why it costs you more to buy a download depending on where you
:00:51. > :01:05.live, we investigate geoblocking. Also, fasten your seat belts because
:01:06. > :01:12.the trial of two former Portia bosses, -- Porsche bosses.
:01:13. > :01:14.Here in Europe, shares opening slightly higher on Friday
:01:15. > :01:16.following gains in Asia and Wall Street overnight.
:01:17. > :01:19.And we'll be getting the inside track on the $30 billon
:01:20. > :01:21.tie-up between Deutsche Boerse and the London Stock Exchange.
:01:22. > :01:23.This mammoth deal - where bankers' fees alone
:01:24. > :01:26.could total $85 million - will create a European trading
:01:27. > :01:27.powerhouse to take on the US and Asia.
:01:28. > :01:35.Our business editor will enlighten us later.
:01:36. > :01:47.We are also taking a look at dancing yourself happy and the rise of the
:01:48. > :01:59.sober rave. But without alcohol sales they are having trouble making
:02:00. > :02:05.money. Let us know what you think, tweet us.
:02:06. > :02:09.Why should it cost you more to buy an iTunes download
:02:10. > :02:15.Australian consumers pay almost 40% more for PC games and 52% more
:02:16. > :02:18.for iTunes downloads than those in the US.
:02:19. > :02:21.It's down to geo-blocking - a practise used by many big firms
:02:22. > :02:24.and being investigated by the European Commission.
:02:25. > :02:27.Preliminary findings of the investigation will be
:02:28. > :02:34.Geo-blocking actually means geographically-blocking.
:02:35. > :02:38.It uses the location of your computer -
:02:39. > :02:41.your IP address - to stop you buying products and services
:02:42. > :02:49.It's used by many multinational tech giants.
:02:50. > :02:53.Apple, Microsoft and Amazon all geo-block.
:02:54. > :02:58.While online streaming services like Netflix have stepped up
:02:59. > :03:09.geo-blocking, under pressure from the film and TV studios
:03:10. > :03:11.with whom they strike deals, more
:03:12. > :03:14.than 50% of online retailers do not sell in other countries.
:03:15. > :03:16.But Consumers can get round this by using Virtual Private Network
:03:17. > :03:19.operators to disguise the location of their computers,
:03:20. > :03:21.operators to disguise the location of their computers.
:03:22. > :03:24.Simon Neill is the head of UK competition practice at the legal
:03:25. > :03:34.Good morning. Thank you very much for joining the programme. Why
:03:35. > :03:38.should it cost you more to buy eggs back Lee the same product elsewhere,
:03:39. > :03:43.just because of where you are? Even if it doesn't go against the letter
:03:44. > :03:48.of the law, surely it's against the spirit? I quite agree and the
:03:49. > :03:52.commission agrees with that as well. What the condition is intending to
:03:53. > :03:55.do is to look at the reason why products are not going across
:03:56. > :04:00.countries, why the prices are different, why consumers are getting
:04:01. > :04:04.a raw deal. That's very much what this is about. This statement coming
:04:05. > :04:08.out later this morning is very much aimed at showing the commission's
:04:09. > :04:14.emerging thinking. This is the first time the commission is issuing its
:04:15. > :04:18.thinking on the commerce inquiry. This will give an indication of the
:04:19. > :04:23.issues it is uncovering and also what it intends to do about it. Not
:04:24. > :04:28.only does this potentially lead to price discrimination, it is against
:04:29. > :04:33.the single market principles of the EU, but it is also restricting
:04:34. > :04:37.consumer choice, so this is a big story. Correct, it is a big story
:04:38. > :04:40.that I think we need to temper expectations as to what the
:04:41. > :04:46.commission will be able to achieve today. I think this is very much a
:04:47. > :04:51.signpost of where we're going. This is enormously important. It's not
:04:52. > :04:54.just big companies who do this, small companies too. There are some
:04:55. > :05:03.real barriers to small companies why they do not easily sell their
:05:04. > :05:07.products across borders. The result of that is that consumers pay high
:05:08. > :05:11.prices when we shouldn't do. The whole point of the common market is
:05:12. > :05:15.that it is a free market across the EU. If someone in Poland is offering
:05:16. > :05:20.a product for sale, I should be able to go online and I should be able to
:05:21. > :05:23.buy that product if it is cheaper in Poland than it is over here. I
:05:24. > :05:27.should have the same rights. There should be no reason why the Polish
:05:28. > :05:35.operation should not be able to post it to me here in the UK. Why do the
:05:36. > :05:44.big companies care so much about geoblocking? There was recently a
:05:45. > :05:48.tie up between PayPal and Netflix. Currently it is very easy to
:05:49. > :05:54.circumnavigate these geoblocking tactics. If you are relatively
:05:55. > :05:57.Internet savvy, yes. For most of us, it's not that easy. You are touching
:05:58. > :06:02.on issues around copyright and licensing. It is a genuinely complex
:06:03. > :06:06.area and I think today's announcement is not going to touch
:06:07. > :06:12.the copyright side of geoblocking. It is a very large issue. The
:06:13. > :06:16.problem with copyright, where you have content which has rights
:06:17. > :06:22.attached to it, those rights are generally set on a country by
:06:23. > :06:26.country basis because copyright laws have not been harmonised across the
:06:27. > :06:33.EU. That is a real problem because without harmonisation of copyright
:06:34. > :06:36.laws, that allows companies to do geo-blocking. These companies are
:06:37. > :06:40.not necessarily breaking the law by stopping you being able to go on and
:06:41. > :06:45.download on iTunes song in France for example rather than the UK. So
:06:46. > :06:50.to what extent is geo-blocking currently susceptible to challenge
:06:51. > :06:54.in the court of justice? At the moment lawful geo-blocking based on
:06:55. > :07:00.copyright is difficult to challenge. At the moment there is a grey area
:07:01. > :07:04.where pay-TV services and streaming services, it is being investigated.
:07:05. > :07:08.Sky and a number of Hollywood studios are locked in a big battle
:07:09. > :07:12.with the European Commission around content and content rights. That is
:07:13. > :07:17.whether the contractual restrictions on the likes of the broadcasters go
:07:18. > :07:21.too far and artificially direct absolute barriers to stop
:07:22. > :07:25.broadcasters from selling content lets say to a different country.
:07:26. > :07:28.There I think the commission will make progress and that is the
:07:29. > :07:35.exciting area coming up later on this year. Really good to talk to
:07:36. > :07:37.you, thank you. Simon Neil, head of the UK competition practice at the
:07:38. > :07:49.legal firm Osmond Clarke. Russia's Central bank is expected to
:07:50. > :07:54.leave interest rates on hold at 11%. It is being forced to crank up rates
:07:55. > :07:59.to try Douzable the ruble, which has plunged amid slumping oil prices and
:08:00. > :08:04.sanctions over Ukraine. Analysts say that the recent recovery in crude
:08:05. > :08:09.prices to around $40 a barrel could mean a return to stability for
:08:10. > :08:16.Russia's crisis hit economy. The latest data out of China shows that
:08:17. > :08:20.house prices rose 36% compared to a year ago, despite slowing economic
:08:21. > :08:22.growth and the value of property is rising at its fastest rate in nearly
:08:23. > :08:44.two years. Shares are up in Toshiba? It's a
:08:45. > :08:48.very interesting story here and it has been pretty bumpy ride for
:08:49. > :08:52.Toshiba in the last few days. They have closed up more than 4% today.
:08:53. > :08:56.Yesterday they were down as much as 10%. A couple of key events
:08:57. > :09:01.affecting this company. On the positive side they have sold their
:09:02. > :09:05.medical device unit for close to $6 billion and that is good news
:09:06. > :09:08.because Toshiba has been hit by a massive accounting scandal. That has
:09:09. > :09:11.led to big job cuts and big losses, so bringing in some cash is welcome.
:09:12. > :09:27.At the same time, this company has just confirmed that its North
:09:28. > :09:29.American units are being looked at by US authorities over accounting
:09:30. > :09:31.issues. That has to be a concern especially when you look at the
:09:32. > :09:33.impact of accounting scandals have already had on the company in Japan.
:09:34. > :09:35.Well, let's stay in Asia where stocks advanced on Friday
:09:36. > :09:37.as higher prices for commodities, including crude oil,
:09:38. > :09:40.pushed Wall Street stocks higher overnight.
:09:41. > :09:42.But shares in Tokyo fell as the Yen's strength worried
:09:43. > :09:46.Japanese government bonds rallied on Friday with 10-year
:09:47. > :09:49.and 20-year yields hitting fresh record lows after strong results
:09:50. > :09:50.at the Central Bank's bond-buying operations.
:09:51. > :09:53.It's the first time since 1980 that the 10-year yield's fallen
:09:54. > :09:55.below the bank's policy rate, currently at minus 0.10%.
:09:56. > :09:58.Meanwhile here in Europe, shares opening slightly higher
:09:59. > :10:01.on Friday following those gains in Asia and Wall Street overnight.
:10:02. > :10:03.And Michelle Fleury has the details about what's ahead
:10:04. > :10:17.2016 got off to a rocky start for the markets. After the US Federal
:10:18. > :10:22.reserve signalled fewer rate hikes this year. With oil closing above
:10:23. > :10:26.$40 a barrel on Thursday, stocks have turned positive for the year.
:10:27. > :10:30.For many investors, the question is, how long will this last? Given the
:10:31. > :10:34.enduring uncertainty about the state of global growth. Meanwhile the US
:10:35. > :10:39.dollar 's slide this week couldn't come soon enough for one company,
:10:40. > :10:45.for Tiffany and Coke, the luxury jeweller which relies on tourism for
:10:46. > :10:49.a chunk of its sales. They report fourth-quarter earnings this Friday.
:10:50. > :10:52.The rising dollar has made shopping trips to its flagship Manhattan
:10:53. > :10:59.store that bit more expensive for those using other currencies. A drop
:11:00. > :11:04.in tourism coupled with a tough retail environment is expected to
:11:05. > :11:06.have cut into its sales. Joining us now is Richard Fletcher, the
:11:07. > :11:12.business editor at the time newspaper group. Good morning and
:11:13. > :11:20.welcome to the programme. Thank you. Let's talk about oil. Limes for the
:11:21. > :11:25.fifth straight week. We are seeing above the $40 a barrel mark. -- it
:11:26. > :11:28.climbs. Russia are trying to work out their interest rate decision
:11:29. > :11:35.today. Not necessarily great news for everyone. A rise in oil used to
:11:36. > :11:39.be bad news particular for equity markets because it was seen as
:11:40. > :11:43.pushing up costs and that would hit company profits, but actually we
:11:44. > :11:48.have seen oil fall to these near historic lows. It has started to
:11:49. > :11:55.rise and markets have taken this as good news. Markets have moved up in
:11:56. > :12:00.lockstep with oil, which is very different to what we used to see.
:12:01. > :12:06.Oil has risen, it is now above $40. It hit $27 in January, a massive
:12:07. > :12:09.load. It's seen as good news, it's seen as slightly more stable, it
:12:10. > :12:14.makes the world more stable. Bizarrely, with oil rising we
:12:15. > :12:19.actually seek equity prices move up, which is against the historic trend,
:12:20. > :12:22.basically. It is good news, it does suggest we are moving towards more
:12:23. > :12:26.stable times even though it does mean that you probably pay a bit
:12:27. > :12:33.more at the petrol pumps for our petrol. Fascinating to see how it
:12:34. > :12:36.plays out in Russia because the central bank keep playing down the
:12:37. > :12:40.cost of oil that is required to balance the books over there. Over
:12:41. > :12:45.the past couple of weeks there has been a flurry of activity in central
:12:46. > :12:49.banks. We have had ten days of major announcements from all corners of
:12:50. > :12:57.the globe. I suppose the best way to describe it is that we have emerged
:12:58. > :13:00.unscathed! We've had the ECB paying their larval by delivering which we
:13:01. > :13:08.thought they would. That has given emerging markets a
:13:09. > :13:14.huge boost because obviously the fear was that as the federal bank
:13:15. > :13:20.pushed up rates, money would move act from emerging markets into the
:13:21. > :13:25.US. But it has been a great week in Asia. Markets. Chinese markets up
:13:26. > :13:30.about 6% over the week. It's been a good week and the central banks have
:13:31. > :13:35.done their bit, if you like. It could have been a lot more volatile
:13:36. > :13:43.for the last ten days. Just before you go, very quickly. You said
:13:44. > :13:48.doves... It's a terrible term but it basically means they're not going to
:13:49. > :13:50.raise rates quickly. There goes been more peaceful, if you like. There we
:13:51. > :14:06.go, peaceful doves! Still to come, the 30 billion tie-up
:14:07. > :14:07.to create a multi-million dollar trading powerhouse to rival the US
:14:08. > :14:16.and Asia. Here in the UK, the cost of fraud
:14:17. > :14:20.appears to be rising. A report out today from financial forward action
:14:21. > :14:28.UK says financial fraud is on the up. -- financial fraud action.
:14:29. > :14:31.Morning, guys. A big rise over the last year despite all those attempts
:14:32. > :14:36.to reduce fraud. That is partly because more and more of us are now
:14:37. > :14:39.doing our banking and financial transactions online and not in
:14:40. > :14:46.person at the banks, so that has contributed to a big rise in fraud.
:14:47. > :14:50.It's up about 25% over the last year, to ?755 million. A staggering
:14:51. > :14:53.amount of money if you also think that the banks have been trying to
:14:54. > :14:58.tackle this tampering that number down. A large proportion of that is
:14:59. > :15:03.coming from card fraud, up itself by about 18% to about half ?1 billion.
:15:04. > :15:11.A staggering number and one that seems like it might grow and grow.
:15:12. > :15:16.One expert that I talked to said one of the simplest and easiest ways,
:15:17. > :15:29.when you login to your bank account to create a new payee, there should
:15:30. > :15:33.be a delay of 24 hours. One login gives you access to many of the
:15:34. > :15:36.accounts that you hold with one bank and that opened us up to much more
:15:37. > :15:41.fraught than perhaps it would do if we were just carrying one card or
:15:42. > :15:44.cheque-book around. A big rise but one that the banks say they are
:15:45. > :15:46.taking seriously but these figures suggest they are struggling to keep
:15:47. > :15:54.a lid on it. I have another set of figures, the
:15:55. > :16:00.Government says that home-buyers are losing out on failed property
:16:01. > :16:05.transactions, can you tell us more? You find a house you want to buy,
:16:06. > :16:08.you do the survey sample legal fees, everything to get to the point where
:16:09. > :16:14.you are ready to buy, then the purchase falls through. We are told
:16:15. > :16:19.that that cost ?270 million in England and Wales Lestienne, money
:16:20. > :16:22.that gets you nowhere and you don't even buy the house, and that is on
:16:23. > :16:29.top of record sale prices up and down the country. Then, thank you
:16:30. > :16:34.very much. This story has just appeared from
:16:35. > :16:37.our personal financial porter Brian Milligan, writing about rail
:16:38. > :16:42.passengers saying they should get help with compensation. 20 more on
:16:43. > :16:44.the website. This affects millions of people up and down the country,
:16:45. > :16:54.using the train to get to work. Our top story - why it costs
:16:55. > :16:59.you more to buy an iTunes download The European Commission publishes
:17:00. > :17:01.findings of its investigation into e-commerce and the
:17:02. > :17:03.practise of geo-blocking. A staggering 11 banks and 30 bankers
:17:04. > :17:07.slaved away to seal the $30 billon tie-up between Deutsche Boerse
:17:08. > :17:13.and the London Stock Exchange Group. The deal creates a European
:17:14. > :17:17.trading powerhouse. Simon Jack, our business editor,
:17:18. > :17:30.joins us in the studio. Simon, really good to see you. And
:17:31. > :17:35.congratulations on the new role, I am not sure we have had US business
:17:36. > :17:43.editor? This is my first time. Congratulations. And I correct you
:17:44. > :17:48.immediately? I am only joking! To seal the deal, the interesting
:17:49. > :17:52.thing... The deal is not sealed. The big question is whether simply else
:17:53. > :17:57.will come into by the London stock exchange, because this Deutsche
:17:58. > :18:02.Boerse LSE merger is a merger of equals. They came together, it would
:18:03. > :18:07.be the world peers biggest trading group and the question is whether
:18:08. > :18:11.somebody else will come in. The other interesting thing, it is a
:18:12. > :18:15.Frankfurt -based company buying one in London. We have a referendum
:18:16. > :18:19.about whether the UK remains part of the EU around the corner. Some of
:18:20. > :18:24.those who want us to leave are making a bit of hay out of this,
:18:25. > :18:30.they are saying, come what may, we will do this deal and it shows there
:18:31. > :18:35.is life on the other side. The shareholders have to vote before the
:18:36. > :18:40.referendum? Correct. The parties say, we don't care what the outcome
:18:41. > :18:44.is, there is probably an asterisk somewhere which says we will have to
:18:45. > :18:47.reconsider if the UK decides to leave. So was Deutsche Boerse
:18:48. > :18:51.devolving some sort of financial power to London or is it, in fact, a
:18:52. > :18:58.strategic move to make sure that London has a foothold in Frankfurt
:18:59. > :19:05.should... I see! So the politics are interesting. It is the third time
:19:06. > :19:12.they have tried to merge. Is this about cost savings or attracting
:19:13. > :19:18.business from other potential rivals? It is about scale, it is to
:19:19. > :19:24.defend against people in the US and compete against Asia. You would have
:19:25. > :19:29.much more listing, many more customers. The argument for
:19:30. > :19:33.customers is that if you clear trades through Frankfurt or London
:19:34. > :19:37.you had to put up a margin in case anything goes wrong. If you combine
:19:38. > :19:45.them, it would be a bit smaller, you would save money. Picking up on that
:19:46. > :19:49.thought, the chief executive of the LSE was saying that the deal would
:19:50. > :19:53.provide an alternative to bank lending for millions of small and
:19:54. > :19:56.medium-sized businesses across Europe, it is economies of scale and
:19:57. > :20:03.the fact that trades can be cleared through? The question would be... It
:20:04. > :20:08.is being billed as a merger of equals but it is not quite. If it
:20:09. > :20:12.was a takeover there would be a huge premium on the London stock
:20:13. > :20:18.exchange, we have a bit of a premium but not massive, it will be 54%
:20:19. > :20:21.owned by Deutsche Boerse but headquartered in London. The current
:20:22. > :20:26.boss of Deutsche Boerse would be the new chief. See you can argue whether
:20:27. > :20:32.it is equals or not. And a question on Porsche, one of your top stories,
:20:33. > :20:40.market manipulation, it's former bosses are being accused of, over
:20:41. > :20:46.failed attempted over Volkswagen. This is worthy of a German opera!
:20:47. > :20:50.The team are good people in the dock today, if you like, they have built
:20:51. > :20:53.up a position in Volkswagen shares with options to buy many more, they
:20:54. > :21:00.then announced the fact that they would do this Volkswagen -- they
:21:01. > :21:04.would do this, then Volkswagen shares shot up a lot, they were
:21:05. > :21:11.worth more than Exxon at one point. Then it was announced that the
:21:12. > :21:16.funding that background the funding dried up. In the end, Volkswagen
:21:17. > :21:25.ends up buying Porsche, but the Porsche ruling family owned 51% of
:21:26. > :21:31.what gain, worthy of a soap opera. 88% of VW shares today are held by
:21:32. > :21:35.three entities, 51% owned by the Porsche family. Do you think a
:21:36. > :21:40.situation like that could have contributed to the other big German
:21:41. > :21:45.diesel scandal going on, and the fact there are not enough critical
:21:46. > :21:50.voices on board? The way that VW is run has come under scrutiny, they
:21:51. > :22:02.have a weird, shudder we'd supervisory board. It is not a
:22:03. > :22:06.normal company. That has all come to light to the diesel situation, you
:22:07. > :22:11.saw the US boss standing down, they appointed another insider, nobody
:22:12. > :22:23.was very satisfied, it is a big mess. What will the final act be?!
:22:24. > :22:25.Simon, really good to talk to you. More on this saga.
:22:26. > :22:28.Germany awaits the court's verdict in a scandal that's engulfed one
:22:29. > :22:30.of the biggest names in the country's vast car industry.
:22:31. > :22:32.Damien McGuinness explains Porsche's complicated
:22:33. > :22:43.Porsche, the company, is the majority shareholder of VW. As you
:22:44. > :22:49.mentioned, diesel gate has already had them hard, so the last thing
:22:50. > :22:54.needed is another scandal, which is why VW and the Porsche family hope
:22:55. > :22:57.for an innocent verdict. It has to be remembered that charges like this
:22:58. > :23:02.of market manipulation are incredibly difficult to prove, in
:23:03. > :23:06.most cases there is no prosecution after such an investigation because
:23:07. > :23:11.it is difficult to prove market manipulation like this.
:23:12. > :23:16.Damien McGrane is. Let's look to some of the reaction on social
:23:17. > :23:23.media. We have had tweets in about the geoblocking story covered at the
:23:24. > :23:26.top of the hour. Gaby has said that geoblocking pushes consumers to
:23:27. > :23:31.finding illegal ways to find content, there is an illegal market,
:23:32. > :23:38.fact, no denying it. Phil Brisas says geoblocking is
:23:39. > :23:44.fuelling hacking and illegal activities. The measure should be
:23:45. > :23:55.set to benefit all. Interesting debate.
:23:56. > :24:00.Richard Fletcher is back to look at other stories. Intercontinental
:24:01. > :24:10.exchange wants to shake up the libel situation. Libor is an important
:24:11. > :24:13.measure which sets the rate for 350 trillion derivatives or some
:24:14. > :24:19.enormous number. It is basically the interest rate that people use for
:24:20. > :24:25.these contracts. It was at the heart of the fixing scandal around the
:24:26. > :24:32.time of the financial crisis. There were huge fines on the bank and
:24:33. > :24:38.traders for fixing Libor. There were suggestions that some of the central
:24:39. > :24:41.banks had tried to nudge the Libor rates down. It used to be set by
:24:42. > :24:48.somebody literally picking up the phone and asking somebody else what
:24:49. > :24:51.the rate was. That is when the British bankers Association in
:24:52. > :24:57.London was responsible for setting the rate. The responsibility has
:24:58. > :25:02.passed over to ICT, they are looking at a different way. It was an
:25:03. > :25:10.algorithm, is the best way to describe it. In 2012 a regulatory
:25:11. > :25:15.review found that that devious raid was not fit for purpose. And before
:25:16. > :25:20.we go, we have to ask you about dancing yourself happy, the rise of
:25:21. > :25:26.the sober rave. Would you go in for this? I am not sure if I would love
:25:27. > :25:33.it or hate it, you arrive and are greeted by Huget angels who hug you,
:25:34. > :25:40.it is 9:30am, there is a super food bar, yoga and massages. Increasingly
:25:41. > :25:46.big business. The difficulty to make it profitable is that they are not
:25:47. > :25:49.making money from selling alcohol. Reportedly, teenagers these days are
:25:50. > :25:54.not drinking alcohol or wanting to go to nightclubs. Today's teenagers
:25:55. > :26:00.are very responsible, lots of them don't drink, or take drugs and
:26:01. > :26:02.unwanted pregnancy rates are down. They are much more responsible than
:26:03. > :26:04.we are. -- we were. There will be more business news
:26:05. > :26:09.throughout the day on the BBC Live web page and on World Business
:26:10. > :26:14.Report. After the sunshine across much of
:26:15. > :26:18.the country yesterday, today brings a more cloudy and cool picture. We
:26:19. > :26:20.start the day