McDermott’s Annual EU Competition Review summarizes key developments in EU competition rules. During the previous year, several new regulations, notices and guidelines were issued by the European Commission. There were also many interesting cases decided by the General Court and the Court of Justice of the European Union. All these new rules and judicial decisions may be relevant for your company and your day-to-day practice.
In our super-connected age, we can be inundated by information from numerous sources and it is difficult to select what is really relevant to one’s business. The purpose of this review is to help general counsel and their teams to be aware of the essential updates.
This review was prepared by the Firm’s European Competition Team in Brussels, Paris and Germany.
On 10 May 2017, the European Commission published its final report on the e-commerce sector inquiry. The report is divided into two sections, covering e-commerce issues in relation to consumer goods and digital content. It also identifies business practices that might restrict competition and limit consumer choice. It would be advisable for e-commerce businesses to review their commercial practices and revise them as necessary in light of the Commission’s stated aim of targeting e-commerce business practices that may negatively impact the functioning of the Digital Single Market.
In May 2015, the European Commission (the Commission) launched a sector inquiry in the field of e-commerce in the context of its Digital Single Market strategy. Its aim was to obtain an overview of prevailing market trends, gather evidence on potential barriers to competition linked to the growth of e-commerce and understand the prevalence of certain, potentially restrictive, business practices and the underlying rationale for their use.
In the course of this inquiry, the Commission gathered evidence from nearly 1,800 companies active in the e-commerce of consumer goods and digital content and analyzed around 8,000 distribution contracts. On 18 March 2016, the Commission published its initial findings showing that geo-blocking is widespread in the European Union due to unilateral decisions by companies not to sell abroad as well as contractual barriers set up by companies preventing consumers from shopping online across EU borders.
On 15 September 2016, the Commission completed its preliminary report (the Preliminary Report), which confirms the fast growth of e-commerce in the European Union and identified business practices that might restrict competition and limit consumer choice. (more…)
On 18 March, the European Commission (Commission) published its initial findings on geo-blocking in the framework of its ongoing antitrust sector inquiry into e-commerce.
The findings are based on responses to questionnaires sent to more than 1400 retailers and digital content providers from all 28 EU Member States in 2015.
The questionnaires focused on geo-blocking practices in the sales of goods (clothing, shoes and accessories, consumer electronics, household appliances, computer games and software, toys and childcare articles, books, media carriers, cosmetic and healthcare products, sports, outdoor, house and garden equipment), and in the provision of digital content services (films, sports, TV programmes, music).
The findings suggest that geo-blocking is a widespread practice. Where the sale of tangible goods is concerned, in most cases the decision to have geo-blocking in place is made unilaterally by the retailer. In only 12 percent of the cases, retailers were forced by contract to put restrictions in place on cross-border sales.
On the other hand, geo-blocking in digital content is for the most part a contractual requirement imposed by suppliers (for 59 percent of the respondents).
The data on geo-blocking now published by the Commission seem to strengthen the Commission’s suspicions that geo-blocking practices are widespread and may significantly impact intra-EU cross-border trade. The Commission said that geo-blocking may be in breach of competition law, particularly when it results from agreements between businesses or if practised by a dominant market player.
However, the Commission also recognized that retailers and service providers may have valid reasons to put geo-blocking in place to restrict cross-border sales. In light of this, the Commission may decide to address the conditions under which geo-blocking is justified in further legislation or guidance to businesses first, rather than take immediate enforcement measures on the back of the sector inquiry.
Any ensuing enforcement action would have to take place on a case-by-case basis, separately from the overall sector inquiry.
It is expected that the Commission will present its final report on the present inquiry by the middle of 2016.
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