On 6 May 2015, the European Commission launched an inquiry into the e-commerce sector, addressing concerns that commercial arrangements between private companies are unjustifiably restricting cross-border online trading. Although the Commission is looking at a wide range of arrangements, the inquiry centres on "geo-blocking" and other measures that the Commission considers prevent consumers from freely choosing an online "e-tailer" or content provider.
The first set of information requests has already been sent to a vast number of companies, such as wholesalers, suppliers, online retailers and online content service providers. The Commission has set out to publish a preliminary report for consultation in 2016 and a final report in the beginning of 2017.
History shows that sector inquiries are very burdensome for companies, given the length and level of detail of the Commission questionnaires. The e-commerce sector inquiry is no exception. The Commission has the power to conduct sector inquiries without any specific suspicion of wrongdoing where the "trend of trade between EU member states, rigidity of prices or other circumstances suggest that competition may be distorted within the internal market".
The Commission will seek to ensure it obtain the information it needs and has legal tools at its disposal to fine companies that refuse to submit requested data or provide inaccurate or misleading information. The Commission can impose fines of up to 1% of aggregate worldwide group turnover, even if the failure to comply is merely negligent and not intentional. It is thus important that companies receiving inquiries from the Commission provide accurate information and cooperate with the Commission, provided the companies' general rights are not overly restricted and the Commission's requests are reasonable.
Roschier assists a number of companies to achieve this balance. The firm also helps its clients finding the most time-efficient process for gathering the information. As the e-commerce sector inquiry continues, companies can expect further questions, which are likely to be more specific and detailed.
The sector inquiry is conducted in close cooperation with other Commission initiatives to ensure a "Single Digital Market". The Commission has indicated its intention to adopt legislative measures and has already launched a public consultation on geo-blocking. The intention of the Commission is to canvass the views of customers and traders on geographically-based restrictions when shopping and accessing information in the EU. All interested parties now have until the end of the year to express their views on what constitutes legitimate geo-blocking. Simultaneously, the Commission is investigating whether a geo-blocking arrangement between the major Hollywood studios and Sky in the UK and Ireland is illegal already under the current competition rules.