![]() At least one-third of the retailers who responded to the sector inquiry indicated receiving some form of price recommendation from manufacturers. However, restrictions on the use of price comparison tools based on objective criteria will generally fall under the VBER. Absolute bans on price comparison tools may amount to a hardcore restriction of passive sales according to the Commission. Restrictions on the Use of Price Comparison Tools. However, this is contrary to rulings by certain national courts (such as in Germany) and is also without prejudice to a pending judgment of the European Court of Justice on this issue. The Commission states that imposing (absolute) marketplace bans on retailers should not constitute hardcore restrictions of competition-i.e., necessarily deemed illegal. Restrictions on the Use of Online Marketplaces. However, the Commission is concerned that some requirements imposed on retailers-for example, the operation of a brick and mortar shop-could be aimed at excluding pure online players from the network, without enhancing product quality. Selective distribution agreements are in principle exempted by the Vertical Block Exemption Regulation ("VBER"). Without prejudging the outcome of a potential investigation, the Commission notes that various of these restrictions may raise concerns. While geo-blocking measures are legal, where based on retailers' unilateral business decisions, nearly 12 percent of retailers reported the use of contractual cross-border restrictions. In addition to its proposed regulation on geo-blocking, the Report identifies potential competition restrictions. Geo-blocking is the primary focal point of the Commission's DSM Strategy. These priorities include:Ĭross-Border Sales Restrictions. The final report identifies several enforcement priorities in relation to activities that may have a negative impact on competition and cross-border trade (and hence the functioning of a DSM). Increased price transparency and competition generated by online trade, for instance, have increased manufacturers' use of agreements to tighten control over the distribution of their goods. ![]() In line with the Commission's preliminary findings, the Report confirms that the growth of e-commerce over the last years has profoundly affected both the distribution strategies of companies and consumer behavior. The Report is the last in a series of documents published by the Commission since the start of the Sector Inquiry (see also our September 2016 Alert and our April 2016 Alert on geo-blocking). For this reason, the Commission launched the 2015 Sector Inquiry to gather evidence of potential barriers to cross-border online trade created by companies and hampering the growth of e-commerce. The Commission estimates that completing the Digital Single Market ("DSM") could contribute €415 billion per year to Europe's economy, as well as creating jobs and transforming public services. The Strategy includes both regulatory initiatives and a competition enforcement dimension. The Report is one component of the Commission's Digital Single Market Strategy, which seeks better access for consumers and businesses to online goods and services across EU Member States. As a result of the 2015 E-commerce Sector Inquiry, the Commission already has opened three investigations into alleged anticompetitive practices for consumer electronics, video games, and hotel accommodations. ![]() In particular, the Report serves as a further impetus for launching new antitrust investigations and the continued monitoring of restrictive practices in the e-commerce sector. The Report highlights the Commission's enforcement priorities in the online markets for consumer goods and digital content, broadly confirming the initial findings presented in September 2016. On May 10, 2017, the European Commission published its long-awaited Final Report on the 2015 E-commerce Sector Inquiry ("Report"). It also announced that it does not anticipate a review of the Vertical Block Exemption Regulation (set to expire in May 2022). Looking Ahead: The Commission will open fresh antitrust investigations against certain of those practices and has already started to do so. The Report confirms that the European Commission's antitrust enforcement priorities in e-commerce include practices such as restrictions of cross-selling, unjustified territorial restraints, absolute price comparison tool bans, and dual pricing for hybrid retailers. The Commission just released its Final Report. The Action: As part of its Digital Single Market initiative, in May 2015, the European Commission launched a sector inquiry into potential anticompetitive barriers to the growth of e-commerce. The Background: The European Commission is working toward the completion of the Digital Single Market, which will provide better access to online goods and services across EU Member States for both consumers and businesses. ![]()
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