Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

The e-commerce sector inquiry – cui bono ? (by Thomas Kramler)

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The European Commission held a successful event yesterday to present and discuss the findings of the Preliminary Report on the e-commerce sector inquiry (you can watch the recording here). Thomas Kramler (Head of the Digital Single Market Task Force in charge of the inquiry) has kindly agreed to write for the readers of Chillin’Competition about the ongoing inquiry. We leave you with him. [And please note that, as always, the views expressed are his own and do not necessarily reflect those of the European Commission].

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On 15 September 2016 the Commission published the preliminary report on the e-commerce sector inquiry. The report is based on around 1800 replies by manufacturers, retailers, marketplaces and copyright holders active in e-commerce. 8000 distribution contracts have been gathered by the Commission in the course of the exercise.

So for whose benefit (cui bono) is the e-commerce sector inquiry?

The Commission

The priorities of EU competition policy cannot be decoupled from the broader EU policy goals such as the establishment of an internal market (see Protocol 27 to the TFEU). Ensuring better access for consumers and businesses to goods and services via e-commerce across the EU is a key goal of the Commission’s Digital Single Market strategy.

The e-commerce sector inquiry allows the Commission to identify potential competition concerns in e-commerce markets and to accordingly prioritise follow-up enforcement. Such enforcement should contribute to removing obstacles to cross-border e-commerce in line with the mentioned goals of the Digital Single Market Strategy.

The Commission has consciously not prioritised cases on vertical restraints in the past 10 years, because the applicable rules (case law, Vertical BER and Guidelines) have been relatively clear and straightforward. With the growth of e-commerce, however, questions on the interpretation of the rules have arisen within the European Competition Network (ECN). The results of the sector inquiry will provide useful factual background for an informed debate on e-commerce related issues within the ECN.

The results of the e-commerce sector inquiry will also be a catalyst for a debate on the Vertical BER and Guidelines in view of their upcoming evaluation and next review.

Last but not least the results of the sector inquiry provide facts and figures which are useful background for the debates on legislative Commission initiatives relating to copyright (for example the proposed “portability regulation“) and the proposed geo-blocking regulation.

– Companies

The Commission is very much aware that a sector inquiry imposes a huge burden on businesses. On the other hand the e-commerce sector inquiry provides the opportunity for companies to review/audit existing contractual relationships and if necessary bring distribution contracts into line with EU competition law. I would image that a pending sector inquiry makes it is easier for in-house lawyers to convince management that such a review/audit is necessary and worth it .

The sector inquiry therefore should provide an incentive for companies to focus on compliance outside the context of a specific antitrust investigation.

Furthermore the sector inquiry allows companies to voice concerns about enforcement trends or unclear rules without being in the spotlight of an antitrust investigation.

– Law firms

Certainly a sector inquiry is welcome by law firms as is generates additional work. These windfall gains aside, I would think that the e-commerce sector inquiry helps to focus clients’ attention on compliance and therefore also provides opportunities for law firms to raise awareness about EU competition law with them.

The e-commerce sector inquiry should also kick-start a dialogue among practitioners and with competition authorities on the workability of the current EU competition rules on e-commerce and on the need for further guidance on specific topics. To this end the Commission has launched a public consultation on the preliminary report which is open until 18 November 2016.

Overall the e-commerce sector inquiry is a valuable exercise that should provide useful background facts, spur the discussion on how to approach restrictions of competition in e-commerce in the EU and allow for informed policy making in the future.

Written by Alfonso Lamadrid

7 October 2016 at 11:57 am

Posted in Uncategorized

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