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E-Sector Inquiry – The Commission’s Final Report.

On 10 May 2017, the European Commission (Commission) published its final report on the E-commerce Sector Inquiry (Final Report), detailing key findings from the e-commerce sector inquiry.

Fabio BORTOLOTTI - 03.07.17
Country expert

Our association sent last year its comments on the preliminary report, which are published at: http://ec.europa.eu/competition/antitrust/sector_inquiries_e_commerce.html, stressing in general terms that, when assessing possible restrictive business practices, which may be seen as an obstacle to the development of e-commerce, due regard is given to the need to warrant the efficient functioning of distribution networks, which is and remains of substantial importance for consumers.

The final report mainly reiterates the preliminary findings published in September. The main issues to be emphasized are the following.

Selective distribution. The Commission acknowledges that the recourse to selective distribution has increased in recent years, in order to warrant a better control by manufacturers of their distribution networks. However the Commission does not intend to modify the exemption granted by the block exemption regulation 330/2010 before 2020. This means that possible vertical restraints covered by the BER, like quantitative selection, exclusion of pure online players, etc., can be prohibited only for agreements exceeding the 30% market threshold, or through the purely theoretical means of a withdrawal of the benefit of the block exemption in an individual case.

Pricing restrictions/recommendations. The Commission maintains the absolute prohibition of resale price fixing. Price recommendations are admitted provided the supplier does not exercise any pressure or incentive to favour the observance of the recommendation. It appears clearly that the Commission is not willing to accept the position we expressed as IDI in our Comments, where we said the following:

While it is obvious that manufacturers may not force resellers to respect a recommended price, they should be entitled to require the respect of a reasonable price range, coherent with the supplier's brand image and price positioning. In the absence of this type of flexibility, it would be impossible for manufacturers to establish any reasonable pricing policy, which would result in a strong incentive towards vertical integration.

Marketplace bans.   According to the Commission, absolute marketplace bans should not be considered as hardcore restrictions under the Block Exemption Regulation and would therefore be covered, if the 30% market share threshold is not exceeded, by the block exemption. The Commission underlines that in particular cases, when justified by the market situation, the Commission or a national competition authority may withdraw the protection of the BER, but it seems rather unlikely that this may actually happen.

 

Fabio Bortolotti, Chair IDI

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