Spotlights on e-distribution agreements
The recent investigations opened into digital book distribution in both the US and the UK highlight the uncertainties surrounding competition law compliance in the online world, and the critical importance of designing and implementing e-distribution models in compliance with competition law rules
What you need to know
E-Commerce has brought about significant changes in commerce across the EU. It has opened up new and significant commercial opportunities and remains the fastest growing retail channel.
However, EU competition rules and guidance, which provide a great deal of legal certainty to distribution in a "brick and mortar" world, have struggled to provide the same degree of certainty for companies operating online. For example, the criteria for deciding when an agent can use its commission to discount the retail price fixed by the principal pre-date the internet and make their application to on-line sales difficult. Getting this wrong, in turn, may result in an accusation of Resale Price Maintenance.
The recent opening of an antitrust investigation into the pricing of digital books by the UK's OFT, which follows on from the opening of similar investigations at State level in the US, highlights these uncertainties.
Whilst the opening of an investigation does not prejudge the existence of an antitrust breach, the potential costs that result from being under investigation should not be underestimated.
What you need to do
Whether a company is extending its existing distribution model to the online world or implementing a distinct e-distribution model, it is crucial to ensure compliance with the applicable competition law rules.
Bird & Bird's experience in this area is second-to-none. The Brussels competition law team – led by José Rivas – advises clients in a number of areas where e-commerce is of strategic importance, such as book publishing and music.