EC announces e-commerce competition inquiry

EC announces e-commerce competition inquiry

The European Commission has announced an antitrust competition inquiry into the e-commerce sector in the European Union, as part of 16 initiatives on a digital single market to be delivered by the end of next year.

The inquiry “will allow the Commission to identify possible competition concerns affecting European e-commerce markets”, with the potential for subsequent case investigations into issues such as abuse of dominant market positions.

The inquiry will focus on “potential barriers erected by companies to cross-border online trade in goods and services where e-commerce is most widespread such as electronics, clothing and shoes, as well as digital content”.

Margrethe Vestager, European Commissioner in charge of competition policy, said: “European citizens face too many barriers to accessing goods and services online across borders. Some of these barriers are put in place by companies themselves. With this sector inquiry my aim is to determine how widespread these barriers are and what effects they have on competition and consumers. If they are anti-competitive we will not hesitate to take enforcement action under EU antitrust rules."

The Commission’s inquiry “will gather market information in order to better understand the nature, prevalence and effects” of any barriers erected by companies to cross-border trade. If specific competition concerns are identified, the Commission "could open case investigations to ensure compliance with EU rules on restrictive business practices and abuse of dominant market positions.”

The Commission will send requests for information to a range of stakeholders throughout the EU, and these could include manufacturers and wholesalers as well as e-commerce retailers. The EC expects to publish a preliminary report for consultation in mid-2016. The final report is expected in the first quarter of 2017.

The aim of the digital single market is to “tear down regulatory walls and finally move from 28 national markets to a single one”, said the Commission, announcing its 16 measures today (6th May). Jean-Claude Juncker, president of the European Commission, said: "I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe."

The Commission says a “fully functional” digital single market could contribute €415bn per year to the economy and create hundreds of thousands of new jobs.

The digital single market strategy's 16 “targeted actions” are split into three sections:– better access for consumers and businesses to digital goods and services across Europe; creating the right conditions and a level playing field for digital networks and innovative services to flourish; and maximising the growth potential of the digital economy.

Actions include a “modern, more European copyright law”. The commission said that “legislative proposals will follow before the end of 2015 to reduce the differences between national copyright regimes and allow for wider online access to works across the EU, including through further harmonisation measures”.

“The aim is to improve people's access to cultural content online – thereby nurturing cultural diversity – while opening new opportunities for creators and the content industry,” the commission continued. “In particular, the Commission wants to ensure that users who buy films, music or articles at home can also enjoy them while travelling across Europe. The Commission will also look at the role of online intermediaries in relation to copyright-protected work. It will step up enforcement against commercial-scale infringements of intellectual property rights.”

The Digital Single Market team will also look at rules to make cross-border e-commerce easier, including “harmonised EU rules on contracts and consumer protection when you buy online: whether it is physical goods like shoes or furniture; or digital content like e-books or apps”.

The team will also look at more efficient and affordable parcel delivery, and an end to “unjustified geo-blocking”, which it called “a discriminatory practice used for commercial reasons, when online sellers either deny consumers access to a website based on their location, or re-route them to a local store with different prices”.

Among its 16 measures, the team will “comprehensively analyse the role of online platforms”, and look at how best to tackle illegal content on the internet, as well as “support an inclusive digital society where citizens have the right skills to seize the opportunities of the internet and boost their chances of getting a job”.

Andrus Ansip, EC v.p. for the Digital Single Market, said: "Our strategy is an ambitious and necessary programme of initiatives that target areas where the EU can make a real difference. They prepare Europe to reap the benefits of a digital future... They must be delivered quickly to better help to create jobs and growth."

The European and International Booksellers Federation (EIBF) has previously called on the European Commission to investigate what it termed Amazon’s "monopoly "on the book market.

In 2014 the German trade association Börsenverein officially lodged a complaint against Amazon. Brussels launched its own preliminary investigation a few months later, based on the facts gathered by the Börsenverein.

In the UK The Publishers Association has called on the government to remove anomalies in the VAT system and address “imbalances” in the retail market, including initiating “an inquiry that acknowledges that the market definition of e-books is separate to that of books in general, into the online-physical and e-book sectors in the UK”.