The Commission launched the sector inquiry into e-commerce on 6 May 2015, as part of the Digital Single Market strategy, on the basis of European Union ("EU") competition rules, pursuant to Article 17 of Regulation 1/2003. The decision initiating the sector inquiry is available in three languages: en - fr - de.
As part of the sector inquiry, the Commission requested information from a variety of actors in e-commerce markets throughout the EU both in relation to the online sales of consumer goods (such as electronics, clothing, shoes and sports equipment) as well as in relation to the online distribution of digital content. During the inquiry, the Commission has gathered evidence from nearly 1900 companies operating in e-commerce of consumer goods and digital content and has analysed around 8 000 distribution contracts.
In March 2016, the Commission published initial findings on geo-blocking in an issues paper . Geo-blocking refers to business practices, whereby retailers and service providers prevent online shoppers from purchasing consumer goods or accessing digital content services because of the shopper's location or country of residence.
On 15 September 2016 the Commission published a Preliminary Report on the e-commerce sector inquiry setting out its initial findings. The Preliminary Report provides an overview of the main competition-relevant market trends identified in the e-commerce sector inquiry and points to possible competition concerns.
Interested stakeholders also expressed their views at the stakeholder conference organised by DG Competition Brussels on 6 October 2016. The event provided an opportunity to representatives of different stakeholders to put forward their views on the Preliminary Report. The conference was opened by Commissioner Margrethe Vestager. Two panels with stakeholders discussed the main current competition-related topics as regards e-commerce in consumer goods and digital content. A third panel of "enforcers" discussed topical issues with regard to online vertical restraints. Watch the web stream of the conference. See also the summary presentation of the key preliminary findings of the e-commerce sector inquiry .
On 10 May 2017, the Commission adopted the Final Report on the e-commerce sector inquiry (available in all the languages of the European Union) and published the accompanying Staff Working Document which set out the main findings of the e-commerce sector inquiry taking into account the views and comments submitted by stakeholders during the public consultation. The Report is divided into two separate sections: the first section covers e-commerce of consumer goods, while the second focuses on e-commerce of digital content.
The main findings of the Final Report
The report confirms that the growth of e-commerce over the last decade and, in particular, increased online price transparency and price competition, had a significant impact on companies’ distribution strategies and consumer behaviour. The final results of the sector inquiry highlight the following major market trends:
- a large proportion of manufacturers decided over the last ten years to sell their products directly to consumer through their own online retail shops, thereby competing increasingly with their distributors;
- increased use of selective distribution systems, where the products can only be sold by pre-selected authorised sellers, allows manufacturers to better control their distribution networks, in particular in terms of the quality of distribution but also price;
- increased use of contractual restrictions to better control product distribution - depending on the business model and strategy, such restrictions may take various forms, such as pricing restrictions, marketplace (platform) bans, restrictions on the use of price comparison tools and exclusion of pure online players from distribution networks.
Some of these practices may be justified, for example in order to improve the quality of product distribution, others may unduly prevent consumers from benefiting from greater product choice and lower prices in e-commerce and therefore warrant Commission action to ensure compliance with EU competition rules.
With respect to digital content, the results of the sector inquiry confirm that the availability of licences from content copyright holders is essential for digital content providers and a key factor that determines the level of competition in the market.
The report points to certain licensing practices which may make it more difficult for new online business models and services to emerge. Any assessment of such licensing practices under the EU competition rules has however to consider the characteristics of the content industry.
One of the key findings of the sector inquiry is that almost 60% of digital content providers who participated in the inquiry have contractually agreed with right holders to "geo-block". Geo-blocking prevents consumers from purchasing consumer goods and accessing digital content online from other EU Member States.
Any competition enforcement in relation to geo-blocking would have to be based on a case specific assessment, which would also include an analysis of potential justifications for restrictions that have been identified. For any further questions please contact: COMP-E-COMMERCEec [dot] europa [dot] eu (COMP-E-COMMERCE[at]ec[dot]europa[dot]eu).
Submissions to the public consultation on the Preliminary Report: