On 26 March, Margrethe Vestager, the EU Commissioner for Competition, announced a proposed competition inquiry in the e-commerce sector.
The announcement may not come as a surprise to some. During her confirmation hearing before the European Parliament last October, Ms Vestager identified digital markets as among her top sector priorities. She also said that she planned to make use of sector inquiries.
If approved, the inquiry would help the Commission to identify and understand the remaining barriers to cross-border e-commerce. While the Commission’s principal focus would be on contractual measures, it is also expected to look at technical measures, such as “geo-blocking”, preventing customers from accessing websites outside of their home country. The Commission estimates
that such restrictions currently cost EU consumers as much as €11.7 billion a year.
According to Ms Vestager, the Commission will request information from "a wide range of stakeholders in all Member States. In particular, "holders of content rights, broadcasters, manufacturers, merchants of goods sold online, and the companies that run online platforms such as price-comparison and marketplace websites" can all expect to receive questionnaires.
As in previous sector inquiries (e.g. in the pharmaceutical and energy sectors), the inquiry could lead to the opening of investigations into competition law infringements by individual companies. It seems unlikely, however, that the findings of this inquiry will prompt legislative changes in the short term. The Commission will first try to identify the "common denominator" between the different online platforms and to test whether the current rules, which have so far stood the test of time, are right for the fast-moving digital society.
Ms Vestager is expected to propose the inquiry, which – as she explained to José Rivas in a recent interview for World Competition – she believes will strengthen and unify enforcement by European and national authorities in this area, to the Commission in May. The preliminary findings from the inquiry are expected to be published in mid-2016.
The European Commission is not alone in expressing an interest in the functioning of online markets. The UK’s Competition and Markets Authority also announced recently that digital markets will be one of the regulator's enforcement priorities in the coming year. Indeed, it is already gathering data as part of a project to monitor how manufacturers of branded clothes and luxury goods restrict internet sales platforms from selling their products online.
Bird & Bird’s Competition & EU team regularly advises clients on the competition law aspects of e-commerce and online selling across a range of sectors. Notably, we secured the annulment by the General Court of the Commission's CISAC decision on the licensing of performing rights for online music. We also represented Adidas in the German competition authority's recent investigation into restrictions in selective distribution systems of sales via online market places.