The European Commission published, yesterday, the preliminary report on the sector inquiry about the competition on the e-commerce sector (available here).
The e-commerce sector inquiry was launched by the European Commission (“Commission”) in May 2015 with the aim to identify possible competition concerns in the European e-commerce markets, in order to contribute to the objective of achieving a Digital Single Market.
In its initial findings, the Commission identified some frequent business practices used by manufacturers in their distribution agreements with retailers that may rest rict competition in the e-commerce sector, thus preventing the consumers from benefiting from greater choice and lower prices in the e-commerce. We highlight the following contractual restrictions imposed to retailers:
- Price recommendation or price restriction;
- Restriction from selling on online marketplaces;
- Restriction from submitting offers to price comparison web sites; and
- Restrictions on cross-border sales
It is also mentioned that the geo-blocking - through which retailers and digital content providers prevent consumers online to buy consumer goods or to have access to digital content services, due to their location or country of residence - might breach competition rules when it results from agreements between suppliers and distributors.
The Commission, therefore, advises companies to review their current distribution contracts to ensure the elimination of said restrictive practices, and to bring them in line with EU competition rules, if they are not.
The preliminary report is now open to public consultation for two months. The final report on the e-commerce sector inquiry will be published in the first quarter of 2017.