07 May 2015

European Commission launches e-commerce sector inquiry

On 6 May, the European Commission launched an antitrust sector inquiry into e-commerce across EU Member States. The sector inquiry will focus particularly on those goods and services where e-commerce is most widespread such as electronics, clothing and shoes, as well as digital content.

The inquiry, which was announced by Commissioner Vestager in March, will investigate possible barriers to cross-border online trade. The Commission notes that more and more goods and services are traded over the internet but cross-border online sales within the EU are growing at a much slower pace. According to EU statistics, currently, 85% of Europeans continue to buy their online products from sellers based in their own countries.

The Commission is particularly concerned that businesses themselves may be establishing barriers to cross-border online trade, with a view to fragmenting the EU's Single Market along national borders. Those barriers may include contractual restrictions in distribution agreements that prevent retailers from selling goods or services purchased online or cross-border to customers located in another EU country.

Margrethe Vestager, European Commissioner in charge of competition policy, said, that the aim of the sector inquiry is to determine how widespread the private barriers are and what effects they have on competition and consumers. If, after analysing the results, the Commission identifies specific competition concerns, it could open more targeted antitrust investigations to ensure compliance with the EU rules on restrictive business practices and abuse of dominant market positions (under Articles 101 and 102 TFEU).

In the coming weeks, the Commission states that it will send requests for information to a range of stakeholders such as manufacturers and wholesalers as well as e-commerce retailers. Commission practice in previous sector investigations (for example into the pharmaceutical, financial services and energy sectors) has been to send out wide-ranging and often very detailed requests for information to a broad spectrum of industry participants. The Commission can require companies and trade associations to supply information, documents or statements as part of its inquiry.

The Commission expects to publish a preliminary report for consultation in mid-2016 and the final report in the first quarter of 2017.

The new sector inquiry complements the Commission's wider Digital Single Market Strategy, which the Commission also launched on 6 May. The Digital Single Market Strategy identifies a number of public (regulatory) barriers that hinder cross-border e-commerce, which the Commission is seeking to “tear down”. It proposes to create an area where citizens and businesses can seamlessly exercise online activities under conditions of free competition, irrespective of their nationality or place of residence. There are 16 key actions that the Commission aims to deliver by the end of 2016, including proposals for a “more European copyright law”, proposals to tackle unjustified geo-blocking and analysis of the role of platforms in the market.

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