The European Commission (EC) has now published its final report on the e-commerce sector inquiry.
Key points to note include:
- The EC will take targeted enforcement action in EU e-commerce markets, including opening further competition investigations into practices which restrict competition and cross-border trade. It has already opened investigations into holiday accommodation, PC video games distribution and consumer electronics pricing practices.
- Some supply practices may prevent consumers from benefiting from increased product choice and lower prices via e-commerce. The EC will therefore take enforcement action against these practices to ensure compliance with EU competition law. In particular:
- Price monitoring software allows manufacturers to monitor and influence retailers' price setting. This may trigger automatic price coordination. Wide-scale use of such software may raise competition concerns, depending on market conditions.
- Certain requirements in selective distribution arrangements to operate at least one physical shop without any apparent link to distribution quality and/or other potential efficiencies may require further scrutiny. These exclude pure online retailers.
- Charging different prices to the same retailer, depending on whether the product is to be sold online or offline, will generally infringe competition law.
- Restrictions preventing resellers fulfilling unsolicited orders from customers outside their Member State will infringe competition law. Restrictions on active sales outside a reseller's territory can only be used in limited circumstances – in particular, where the other territories have been exclusively allocated to other distributors or reserved for the supplier.
- "Geo-blocking", such as refusing to deliver goods to customers in other EU Member States, or refusing to accept payments from customers in other EU Member States, is not prohibited by EU competition law when it is the result of a unilateral decision by a non-dominant company. Where, however, it results from agreements or concerted practices by different businesses, it may well be unlawful.
- Outright bans on selling via online marketplaces should not be considered as "hardcore restrictions", so they are not generally unlawful. However, the use of such bans by perfume manufacturer Coty in its selective distribution agreements is currently under review by the European Court of Justice (ECJ). In its submission to the ECJ in the Coty case, the EC reiterated its view that marketplace bans are not hardcore restrictions and that luxury goods makers can set up selective distribution systems which prevent the sale of their products on certain websites. However, some EU Member States have taken a different approach, with Germany in particular taking a hard line on online sales restrictions by sports shoe makers Adidas and Asics.