EU competition authority's review of online commerce gets underway

EU competition authority's review of online commerce gets underway

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Author: Jaime Jones

Applies to: European Union

The European Commission formally launched its promised inquiry into the e-commerce sector yesterday.

In March, Margrethe Vestager, the EU's Commissioner in charge of competition policy, indicated her intention to initiate an inquiry into the e-commerce sector during a speech at a conference in Berlin. Yesterday's announcement formally kicks off the inquiry which will last until early 2017.

The inquiry forms part of the Commission's broader Digital Single Market strategy and will focus primarily on the goods and services which are most typically sold online, such as electronics, shoes, clothes and digital content.

Over the course of the next few weeks the Commission will send requests for information out to businesses engaged at all levels of the supply chain including manufacturers, wholesalers and retailers, so that it can start to build a picture of the market and how it is working. The Commission's preliminary report is expected to be published for consultation during mid-2016.

The review has been prompted by concerns about the slow rate of growth in online trade between Member States. In 2014, about 50% of the EU population shopped online but only about 15% of that was traded across Member States' borders.

Language barriers, legislative differences and consumers' cultural preferences may explain the slow development of online cross-border trade to some extent. But recent surveys into the e-commerce sector revealed that contractual restrictions are, potentially, playing a far more significant role, with 32% of retailers indicating that their hands were contractually tied when it came to trading across borders.

The Commission can conduct inquiries into certain sectors where circumstances indicate that there may be a distortion of competition on the market. The inquiry will enable the Commission to gain a better insight into the e-commerce sector so that it can assess whether anti-competitive contractual restrictions are creating barriers to cross-border e-commerce. If, during the inquiry, the Commission identifies specific practices that it believes merit a closer look, it could choose to open up separate competition law investigations into those individual practices.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the author

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Jaime Jones

Solicitor

03700 86 5153

Jaime is a solicitor in our specialist EU & competition law team. As well as advising clients in all sectors on a range of competition law issues, Jaime also has a specialism in Public Procurement law and advises both public and private sector clients on the application of the procurement rules.

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