14 January 2016

Italian AGCM imposes interim measures closing down two online retailers

Following consumers’ complaints, the Italian Competition Authority (AGCM) opened separate proceedings against two websites selling electronic products. Consumers complained that the two online resellers were not correctly delivering merchandise and that costs were not reimbursed if the order was cancelled, due to failure to deliver on time. The AGCM made use of its interim measure powers and ordered the two retailers to suspend those activities that are subject to the pending investigation.

The AGCM found evidence showing that both retailers only delivered orders in a timely fashion for a small percentage of the orders they received. In some instances, the retailers did not hold any inventory, and only purchased the relevant goods, following receipt of customer orders. This obviously caused significant delays in the fulfilment of the orders. As such, a high number of orders were eventually cancelled by customers. Moreover the two online shops were avoiding or unlawfully delaying reimbursement for cancelled orders. As a result of the above issues and since the websites continued receiving orders and upfront payments, the AGCM decided to impose interim measures. It ordered that the two companies must cease the activities being investigated. The AGCM made use of its interim measure powers pursuant to Art. 27(3) of the Consumer Code and Art. 8(1) of the Procedural Regulation. The investigation is ongoing and will follow their usual course.

The digital market is under scrutiny by policy makers and public enforcers throughout the EU. Indeed, the fast growth of the digital economy is imposing new burdens on legislators and enforcers. Both are called to check whether the current legislative and enforcement systems are suitable to promote innovation and economic growth while protecting consumers. These orders by the AGCM are only a small part of a number of on-going investigations and inquiries into Italy and Europe's e-commerce sector. Both at the national and European level, enforcers are investigating conduct by digital businesses; for example, the UK Competition and Market Authority’s investigation on arrangements relating to online sales of licensed sport and entertainment merchandise and other consumer products, Germany’s Bundeskartellamt’s several online/offline cases, as well as the European Commission’s sector e-commerce enquiry.

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