In May 2015, the European Commission launched an inquiry into the e-commerce sector in the European Union. On September 15, 2016, the Commission published a Preliminary Report. The Final Report was published on May 10, 2017.
The Sector Inquiry examined the operation of competition in relation to consumers goods (including clothing and shoes, consumer electronics, electrical household appliances, computer games and software, toys and childcare, media (books, CDs, DVDs, and Blu-ray discs), cosmetics and healthcare products, sports and outdoor equipment, and house and garden products) and digital content (focusing on audio-visual and music products).
In the context of consumer goods, the Commission identified competition concerns such as restrictions on selling via online marketplaces and price comparison tools, vertical and horizontal price fixing (as well as dual pricing for online and offline sales), price parity clauses, and exchange of competitively sensitive information. As regards digital content, the Commission expressed concerns about the competitive effects of bundling rights to digital content, territorial restrictions, the lengthy duration of licensing contracts, and payment structures that favor incumbent content providers.
The e-commerce sector is a particular priority for the Commission. The Final Report states that “the EU is one of the largest e-commerce markets in the world. The percentage of people aged between 16 and 74 that have ordered goods or services over the internet has grown year-on-year from 30 % in 2007 to 55 % in 2016.” It notes that online sales have grown exponentially in the EU since 2000 with an annual average growth rate of approximately 22%, and that the rapid development of e-commerce affects both business and consumers.
Against this backdrop, the Commission is concerned to avoid diverging interpretations of EU competition rules with regard to business practices in e-commerce markets, thereby creating obstacles for companies that operate in multiple Member States – to the detriment of a Digital Single Market. This alert memorandum summarizes the findings of the Report and discusses the implications for businesses.