E-commerce Sector Inquiry

A closer look at e-commerce and e-tailing

The world is increasingly online and the same applies to the distribution of products. The European Commission is also keeping a close eye on the rise of internet distribution (also known as e-tailing). Euro Commissioner Almunia, for instance, stated in his speech on retail markets: “[…] I will need to intervene if I had good evidence that a company in your industries is erecting barriers against e-commerce to protect its traditional, brick-and-mortar operations”. Not only the Commission, but also the national competition authorities are increasingly focusing on the enforcement of competition law in internet distribution. The German Bundeskartellamt organised a large conference in October 2013 on Vertical Restraints in the Internet Economy. This gave rise to an interesting Paper. However, it is not just a matter of words and papers: the German competition authority, for instance, is investigating whether the e-commerce policy of Adidas and Asics is compatible with competition law.

Fines have already been imposed in several Member States for competition restricting e‑commerce policies. Bang & Olufsen, for instance, has been fined by the French competition authority for excluding online sale of its products. The Bundeskartellamt reported in October 2013 that Sennheiser had decided, in order to put an end to an investigation of its European e-commerce policy, no longer to prohibit its distributors from reselling Sennheiser products via Amazon. In November 2013 the Bundeskartellamt closed an investigation into Gardena’s distribution system after Gardena had promised that its distributors will qualify for the same discounts regardless of whether they sell Gardena products online or offline. According to the Bundeskartellamt, Gardena applied a dual price system that discriminated against Internet sales because, unlike in the case of offline sales, distributors did not qualify for the maximum discount in online sales. In December 2013 Bosch-Siemens-Hausgeräte was able to put an end to an investigation by the Bundeskartellamt by giving a similar commitment

Although these developments are debatable, it is obvious that the competition authorities will continue to show an increased interest in e-commerce in 2014. Supervisory authorities will lend a ready ear to discrimination against Internet sales and to complaints in that regard. In one of our earlier blogs we addressed the question how to deal with the potential conflict between competition law and the avoidance of online price erosion (click here).

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