Competition Commissioner Margrethe Vestager announced today during a speech at the Bundeskartellamt (German Competition Authority) International Conference on Competition her intention to launch a sector inquiry in the e-commerce sector. The sector inquiry will be formally proposed to the Commission in May. Preliminary findings on the sector inquiry could be ready in mid-2016. Commissioner Vestager stressed:

“It is high time to remove remaining barriers to e-commerce, which is a vital part of a true Digital Single Market in Europe. The envisaged sector inquiry will help the Commission to understand and tackle barriers to e-commerce to the benefit of European citizens and business.”

Ongoing Investigations into Restrictions on Cross-Border Supply 

Commissioner Vestager introduced the sector inquiry having noted that DG Competition has a number of on-going investigations in the sector, regarding:

1. Contractual clauses in the contracts between certain film studios and European broadcasters restricting the ability of subscribers to access satellite and online payTV when they are outside the licensed territory;

2. Online distribution of electronic goods, relating to pricing and restrictions on cross-border supply. Continuing its summer 2013 investigation, the Commission dawn raided several online electronics retailers on 10 March 2015.

3. Alleged geo-blocking of certain online PC video games.

Focus and Process  

The Commissioner indicated that the inquiry will focus on “the barriers to the cross-border sale of goods and digital content erected by private companies, especially in their distribution contracts” and on industries in which e-commerce is most used.

The Commission is aiming to collect information from a broad range of firms active in the sector, including holders of content rights, broadcasters, manufacturers, merchants of goods sold online, and the companies that run online platforms (price-comparison and marketplace websites).

Commissioner Vestager indicated that she expects that the inquiry will (1) strengthen and make more uniform the actions that the Commission and national authorities take in relation to restrictions on online sales; (2) provide companies active in the sector with guidance; and (3) encourage companies to set up compliance programmes and implement other preventive measures.

Focus on Geo-Blocking

In her speech Commissioner Vestager also referred to geo-blocking and redirecting of consumers as a practice that undermines cross-border trade. She attributed such restrictions to contractual arrangements between manufacturers and content owners and their distributors, and noted that the Vertical Block Exemption Regulation may need revision, notwithstanding its existing prohibition of contractual restrictions of (passive) online sales, which are considered hard-core restrictions of competition.

In a similar vein, Vice President Ansip indicated yesterday that the EU will also review copyright law, to ensure that competition and intellectual property law are aligned to address geo-blocking. The Vice President noted that the modernisation of copyright law is intended to ensure a balance between the interests of rights holders and consumers, to create new opportunities for content creators, and to improve enforcement of intellectual property rights.

Regulating Platforms?

Finally, having noted that the debate about regulation of online platforms should be “kept alive”, Commissioner Vestager emphasised the need to identify what an ‘online platform’ is (including identifying the ‘common denominator’ between different sites, including Facebook, eBay, SAP and Spotify) before doing anything. As she put it: “[i]t is very important to keep the debates about platforms alive, to make sure that if we eventually legislate, we know what to do.”