E-commerce sector inquiry finally launched

e-commerceOn the same day as the Digital Single Market package was announced, the EU competition watchdog, Commissioner Vestager, launched the long awaited e-commerce sector inquiry that companies from all sectors and industries were waiting for with bated breath.

FTI Consulting Brussels’ competition team already published a snapshot exploring the background of the Commission’s e-commerce sector inquiry, and what companies might expect from it. We also analysed previous sector inquiries to give an indication of the potential outcome of these rather vague investigations.

What will the focus be?

On potential barriers erected by companies to cross-border online trade in goods and services where e-commerce is most widespread, such as electronics, clothing and shoes. The overall goal of the efforts, regulators say, is to make it easier for people across the 28 Member States to gain access to services like movie streaming, cloud computing and online shopping, as well as to help European companies to operate across the whole region. The Commissioner highlighted though that the Commission will not force companies to sell in markets where they do not want to sell.

Who will be affected?

A range of stakeholders, for example manufacturers, wholesalers and e-commerce retailers. But any company that sells online – even in only one country – could potentially be contacted, because the Commission will want to know why they are not selling to customers throughout the EU.

What to expect?

Requests for information (Article 18 letters of Regulation 1/2003); the Commission will ask about the type, prevalence and effects of barriers, to gather market information and assess whether companies’ own practices hinder online competition. It may then investigate and issue remedies against companies that restrict cross-border sales or otherwise infringe competition law. If after analysing the replies the Commission identifies competition concerns, it could open case investigations.

When? Expect the information requests in the coming weeks; the Commission says it will publish a preliminary report for consultation in mid-2016. The final report should be published in the first quarter of 2017.

Important detail: National Competition Authorities will be able to see the information gathered by the Commission and will be consulted on the results of the sector inquiry.

Targeted companies will be expected to cooperate fully and in a timely manner.  Commissioner Vestager is quickly picking up on her predecessors Almunia and Kroes in the fine race and is not shy in wielding the sector inquiry sword. We can expect some lively cases coming out of it.

 

Maria Tsoni is a Senior Consultant in FTI Consulting’s Competition practice

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