Following the launch of the e-commerce sector inquiry in May 2015, the European Commission has now published a Preliminary Report. The report presents the initial results of the Commission's analysis of information gathered from nearly 1800 companies operating in the online sales of consumer goods and digital content.

The report confirms that e-commerce has grown steadily in the EU over the past few years. The rise of e-commerce has led to increased retail activities by manufacturers and an increase in price competition due to a higher level of price transparency. However, some manufacturers have instead tried to mitigate the impact of online sales by including more (online) sales restrictions in their distribution agreements. These restrictions include pricing limitations, bans on selling on online marketplaces, restrictions on cross-border shopping and limitations on the use of price comparison websites. The Commission notes that the report should be "a reason for companies to review their current distribution contracts and bring them in line with EU competition rules if they are not."

In March 2016, the Commission published its initial findings on "geo-blocking", a practice that prevents customers from cross-border shopping because of the customer's location or country of residence [see our April 2016 newsletter]. The Preliminary Report has a broader scope as it also covers licensing rights used by digital content providers and online sales restrictions besides geo-blocking.

In the past, sector inquiries have been followed by enforcement action by the Commission in the  industries concerned. Currently, the Commission is investigating licence agreements between broadcasters and providers of pay-TV services [see also our May 2016 newsletter]. Margrethe Vestager, the European Commissioner  for Competition, said during a press conference in Paris that the information from the sector inquiry may spark further investigations.

The Commission expects to publish a Final Report in the first quarter of 2017. Interested parties can provide their input to the Commission during the public consultation period which lasts until 18 November 2016.