PURPOSE: to present the Commissions final report
on the e-commerce sector inquiry.
BACKGROUND: the Commission launched a sector inquiry
into the electronic commerce in May 2015 as part of its strategy
for a digital
single market, one of the pillars of which is to guarantee
consumers and businesses better access to goods and services thanks
to e-commerce in the EU.
The objective of the inquiry was to enable the
Commission to identify potential competition problems in
European e-commerce markets.
During the course of the inquiry, the Commission
collected data from many stakeholders (retailers, price
comparison tool providers, payment system providers, manufacturers,
digital content providers, large groups and hosting operators) from
the 28 Member States.
On 15 September 2016, the Commission published a
Preliminary
Report on the initial findings of the e-commerce sector
inquiry. It was followed by a public consultation open to all
interested stakeholders.
CONTENT: the main conclusions of the final report are
as follows:
1) Consumer goods: the
e-commerce sector inquiry covered the product categories most sold
online: clothing and shoes; consumer electronics; electrical
household appliances; computer games and software; toys and
childcare articles; media (books, CDs, DVDs and Blu-ray discs);
cosmetics and healthcare products; sports and outdoor equipment,
and house and garden products. The results of the e-commerce sector
inquiry confirm that the growth of e-commerce over the last decade
had a significant impact on companies distribution strategies
and customer behaviour.
The final report confirms that the growth of
e-commerce over the past decade, in particular price
transparency and online price competition, has had a significant
effect on business distribution strategies and the behaviour of
customers. It also identifies business practices that may restrict
competition.
The main changes in the market over the last ten years
are as follows:
- in response to the growth of e-commerce, a large
proportion of manufacturers decided in the course of the last ten
years and in reaction to the growth of e-commerce, to sell their
products directly to customers through online retail shops,
thereby competing increasingly with their own independent
distributors;
- manufacturers acknowledge that they are increasingly
using selective distribution systems, whereby
they set the criteria that retailers must meet to become part of
the distribution network and where all sales to unauthorised
retailers are prohibited;
- an increased recourse to vertical restraints
that allow for a greater control over the distribution of products:
such as pricing restrictions, marketplace (platform) bans,
restrictions on the use of price comparison tools and the exclusion
of pure online players from distribution networks.
2) Digital content: the
inquiry focused on the online provisions of audio-visual and
musical products.
The results of the survey confirm that the
availability of digital copyright owners' licenses is
essential for digital content providers and a key competitive
factor in the marketplace. Rights licensing is often based on
exclusivity, because access to exclusive content enhances the
attractiveness of digital content providers. The Commission
considers that the use of exclusivity is not itself
problematic.
The main competition concerns identified relate
to certain contractual restrictions in license
agreements:
- rights holders tend to divide rights into
several elements and grant them in whole or in part to different
content providers in different Member States;
- online rights are to a large extent licensed on a
national basis or for the territory of a limited number of
Member States which share a common language. This is particularly
prevalent in relation to content types that may contain premium
products, such as sport (60 %), films (60 %) and fiction
TV (56 %);
- the vast majority of digital content providers
(68 %) restrict access to their online digital content
services from other Member States,
and 59 % of them do so because of contractual restrictions in
the agreements with right holders. Geo-blocking is most prevalent
in agreements for TV series (74 %), films (66 %) and
sport events (63 %);
- long contract durations are common (more than 3 years or even more than 5
years). Contractual relationships tend to last even longer, with
average durations of more than 10 or even 20 years, possibly as a
result of clauses favouring their extension;
- lastly, certain licensing practices which may
make it more difficult for new online business models and services
to emerge.
In conclusion, the
Commission considers it important to avoid any divergent
interpretations of the EU competition rules with regard to business
practices in e-commerce, as this could create serious obstacles for
companies to being active, in a compliant manner, in multiple
Member States, to the detriment of a Digital Single
Market.
The results of the e-commerce sector inquiry confirm
that there is no need to anticipate the review of the current
Vertical Block Exemption Regulation (VBER) which will
expire in May 2022.
In the light of the results of the e-commerce sector
inquiry, the Commission will therefore:
- target enforcement of the EU competition rules at the
most widespread business
practices that have emerged or evolved as a result of the growth of
e-commerce and that may negatively impact competition and
cross-border trade and hence the functioning of a Digital Single
Market;
- broaden the dialogue with national competition
authorities within the European competition network on
e-commerce-related enforcement to contribute to a consistent
application of the EU competition rules as regards
e-commerce-related business practices.