These are the words of Europe’s chief antitrust enforcer, Margrethe Vestager, introducing the Commission’s public hearing on October 6, 2016, on its preliminary findings of the e-commerce sector inquiry. The promise of e-commerce alluded to by the Commissioner for Competition means quite simply a wider choice of goods available for purchase online, at lower prices across the EU as well as cross-border access to digital content for consumers in the EU. The major concern for the Commission is that e-commerce still takes place nationally within the EU and not on a cross-border basis across the 28 Member States, because of contractual barriers erected by companies.

This hearing came hot on the heels of the 290 page behemoth Preliminary Report on the e-commerce sector inquiry published by the Commission on September 15, 2016 and reported on in detail in our previous blog. The hearing was an opportunity for the Commission to present its key findings, but its primary purpose was to facilitate a dialogue between stakeholders including online retailers and marketplaces, manufacturers, digital content providers and right holders with competition enforcers and consumers. The Commission was keen to hear different perspectives before finalizing its final report on the sector inquiry and, in particular, to understand the challenges and opportunities linked to e-commerce in Europe, with the help of the business community.

The key takeaways of the hearing can be summarized as follows:

What are the specific restrictions that the Commission is likely to target?

The Commission kept its future enforcement plans resolutely close to its chest, adopting a neutral stance and positioning itself in learning mode for the day. Reading between the lines though, the restrictions that are most likely to feature on the Commission’s enforcement radar include:

  • For consumer goods:
    • Price limitations on online retail prices
    • Restrictions to sell on marketplaces
    • Limitations to sell cross-border
  • For digital content:
    • Restrictions on the availability of licenses for content on a cross-border basis
    • The bundling of online rights with other technologies
    • The long duration of contractual relations

What’s next?

The public consultation is open until November 18, 2016 and the Commission is keen to obtain as much input as possible from the business community before it will issue its final guidance based on the outcome of its sector inquiry. This is the last chance to influence the Commission’s conclusions on the sector inquiry, before it presses ahead with its final report which it plans to issue in the first quarter of 2017.

The Commission’s final report should give a clearer indication of enforcement priorities and will be a precursor for likely legislative change in the form of a revision to the Vertical Agreements Block Exemption Regulation and to the Guidelines on Vertical Agreements.

What should companies do?

This is the time for companies to do an internal review and audit of existing contract terms and practices to bring them into line with the EU competition law rules. There is also still time to convey key concerns to the Commission and effectively lobby them as part of the public consultation.

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