E-commerce Sector Inquiry

What will the European Commission and the ACM do about e-commerce and e-tailing?

The world is increasingly online – and the same applies to the distribution of products. The European Commission has stated that it attaches great importance to internet distribution (also known as “e‑tailing”). European Commissioner Almunia, for instance, stated last year 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." As we reported earlier, national competition authorities are increasingly focusing on resale price maintenance, usually combined with online distribution. There is a great deal of interest in this theme in Germany in particular, as apparent from e.g. the investigations by the Bundeskartellamt into ASICS and Gardena. That is not yet the case in the Netherlands.

Developments in the Netherlands

On 3 October 2014 Chris Fonteijn, Chairman of the Board of the Netherlands Authority for Consumers and Markets (''ACM''), gave a speech in which he stated "In sum, we are looking into vertical restraints. The economic developments are reason to do so. We are of course also monitoring the international developments in this field." On 25 November 2014, Chris Fonteijn will discuss this development with Andreas Mundt, President of the Bundeskartellamt, at ACM. The ACM recently stated that it will publish a position paper on the harmful effects of certain clauses in vertical agreements in the beginning of 2015. That may appear to be a new development, but most definitely is not.

Developments in other EU Member States

Several papers on this subject have been published these last few years. In October 2013 the Bundeskartellamt organised a conference on Vertical Restraints in the Internet Economy. That gave rise to an interesting Paper. In 2012 already, the OFT commissioned the Can ‘Fair’ Prices Be Unfair? A Review of Price Relationship Agreements report in the United Kingdom. This year the "Most Favorite Nation provisions" and Resale Price Maintenance were the focus of attention in the United Kingdom in the paper Retail Price MFNs: Are they RPM ‘at its worst'? One day before Chris Fonteijn’s speech, Philip Marsden of the Competition and Markets Authority (CMA) stated in his speech how CMA intended to deal with the enforcement of competition law in online markets. In July 2014 the Austrian competition authority also published a report on retail price maintenance and announced that it would be launching an information campaign on this subject this autumn.

What's ahead?

An interesting parallel is that in the Member States in which the papers have been published several investigations and cases have been initiated also since that time (see this blog). That trend therefore suggests that it is possible that ACM will also ultimately start a number of investigations. But also apart from policy changes and investigations by ACM into competition restricting practices in e‑commerce and e-taling, the actions of a competition authority in one country (e.g. Germany) can also have consequences for the e-commerce policy of a company in the Netherlands, for instance. Albeit in a different context (a complaint about abuse of a position of power filed by DE Master Blenders in France), Nespresso, for instance, changed its commercial policy in several Member States, including the Netherlands, after it had given undertakings to the French competition authority. The actions of a competition authority in one Member State can therefore also lead to changes in the commercial policy in other Member States.

European Commission’s views

The European Commission is also taking account of these transnational consequences of national competition policy. European Commission Almunia, for instance, stated the following in his speech of 10 October 2014: “But as business evolves at an incredible pace we are facing new challenges all the time, such as in e-commerce and online bookings markets. A number of ongoing cases in the ECN raise novel issues regarding the application of competition rules to the use of the internet for the sale of goods and services. It is important that the ECN sends a consistent message to companies as to what they can and cannot do. For example, it should be clear to them which restrictions they can impose on the use of the internet as they design their distribution models and which clauses they can include in distribution contracts. As you know, broad principles for e-commerce were set out in the Guidelines on Vertical Agreements adopted in 2010. As actual cases are analysed across Europe, and with e-commerce evolving at a fast pace, it is essential to discuss within the ECN how to best apply those principles and arrive at consistent individual decisions. If we want to promote pan-European business models, we need to give legal certainty to the business community." Mr Almunia touches on a sensitive issue here. Companies that follow (or wish to follow) one single European commercial policy require legal clarity throughout the European Union. Such situations obviously call for a single, clear policy of either the European Commission or the national competition authorities in an ECN context. That will also avoid a situation in which a very rigid interpretation of competition law (e.g. in Germany) forces a company to change its entire European commercial policy. Unfortunately Mr Almunia’s appeal has not yet met with any response.

More information on this subject can be found in the E-commerce & mededinging, boetes voor beperken e-taling article by Martijn van de Hel in Fenedex’s Globe Magazine.

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Information

More information about this subject? Don't hesitate to contact one of us:

Diederik Schrijvershof

T +31 20 238 20 03
M +31 6 81 364 318

Martijn van de Hel

T +31 20 238 20 02
M +31 6 21 210 853

Bas Braeken

T +31 20 238 20 01
M +31 6 11 592 679