EC publishes final report on e-commerce sector inquiry

The European Commission (EC) has today (10 May) published its final report on the competition sector inquiry into e-commerce which was launched in May 2015. The sector inquiry forms part of the EC’s Digital Single Market strategy – which aims to promote better access for consumers and businesses to goods and services via e-commerce across the EU.

Commenting on the report’s findings, Commissioner Margrethe Vestager in charge of competition policy said: “Certain practices by companies in e-commerce markets may restrict competition by unduly limiting how products are distributed throughout the EU. Our report confirms that.

“These restrictions could limit consumer choice and prevent lower prices online. At the same time, we find that there is a need to balance the interests of both online and ‘brick-and-mortar’ retailers. All to the benefit of consumers.

“Our findings help us to target the enforcement of EU competition rules in e-commerce markets”.

In a statement issued on the Europa website today, the EC said that it will use the findings of the report “in order to broaden the dialogue with national competition authorities within the European Competition Network on e-commerce-related enforcement to contribute to a consistent application of EU competition rules across the EU.”

According to the EC, the final results of the sector inquiry highlight the following market trends

• A large proportion of manufacturers decided over the last ten years to sell their products directly to consumers through their own online retail shops, thereby competing increasingly with their distributors
• Increased use of selective distribution systems, where the products can only be sold by pre-selected authorised sellers, allows manufacturers to better control their distribution networks, in particular in terms of the quality of distribution but also price
• Increased use of contractual restrictions to better control product distribution. Depending on the business model and strategy, such restrictions may take various forms, such as pricing restrictions, marketplace (platform) bans, restrictions on the use of price comparison tools and exclusion of pure online players from distribution networks.

Click here to see the full report.