26 June 2015

Electronic commerce comes under the scrutiny of the European Commission

As announced in March 2015, the European Commission has launched an inquiry to identify potential non-compliant conduct carried out by companies in the e-commerce sector under European Antitrust Law. The Commission will issue a report summarizing its preliminary findings in mid-2016, and the final report is due in the course of 2017.

Within the framework of the digital single market, the Commission has identified certain regulatory pitfalls, which are considerably slowing down the volume of cross-border e-commerce transactions within the European Union. Despite an increase in the number of e-commerce transactions in 2014, only 15% have involved cross-border circulation of goods amongst the European Union Member States. The Commission considers such an amount to be too low for an integrated single market.

Reasons for this have been identified in language gaps, consumers' habits and differences in regulations, but also in barriers erected by manufacturing companies vis-à-vis distributors through contractual provisions aimed at limiting the free circulation of goods within the European Union.

During the next few months, manufacturers, distributors and retailers may receive requests for information, documents and declarations on their commercial relationships within the distribution channel. The inquiry will focus on footwear, clothing, accessories and digital content. The Commission may issue monetary fines if companies do not reply to the inquiry.

In instances where the Commission identifies competition concerns, it can issue further fines to the companies, calculated on the basis of their revenues. To limit risks, a thorough revision of your current agreements is advisable.

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