Commission announces inquiry into e-commerce
The launch of an investigation into the e-commerce sector strongly suggests that the Commission will use all the tools available to enforce its digital agenda.
There can be little doubt about the European Commission’s desire to integrate Europe’s fragmented digital sector, which is hampered by barriers erected as much by national regulation as private companies. What is less certain is how the Commission can achieve that goal, given diverging national views and the EU’s snail-like legislative process.
It should have come as no surprise, then, that the Commission is planning to involve the department for competition, which has the greatest investigation and sanctioning powers of all Commission departments. Time and again, the antitrust regulations have been used to achieve a wider EU agenda of removing national barriers to the EU single market in areas such as retail banking, energy, pharmaceuticals and telecoms.
The latest example is an inquiry into the e-commerce sector planned for early May and announced by Margrethe Vestager, the European commissioner for competition, on Thursday (26 March). The investigation, she said, will require companies to provide details of contracts and internal policies with the aim of understanding why only a limited number of consumers buy goods and services online across borders. While almost half of all consumers shop online, the Commission estimates that only 15% do so across borders.
“Sound competition policy in fast-moving markets also requires thorough market knowledge,” Vestager told a conference in Berlin on Thursday. “We intend to identify what hampers competition in e-commerce when sales straddle national borders.” Companies could face proceedings and fines for breaching EU competition law.
But the inquiry will also feed into the Commission’s wider legislative work on the digital sector. Does that mean that Vestager will circulate companies’ contracts and internal policies around the Commission? A spokesperson was quick to reject such concerns, explaining that only the conclusions of the department for competition would be made available, not individual responses.
Confidentiality
Indeed, information submitted to the department is subject to strict confidentiality rules. Officials investigating an antitrust case cannot share information with officials investigating a merger, even where those investigations involve the same company, according to lawyers. All information collected must stay in its original file.
The Commission is expected to send questionnaires to holders of content rights, broadcasters, manufacturers, merchants of goods sold online and online platforms such as price-comparison and marketplace websites.
Vestager said that the preliminary results may be online by mid-2016 and she has already singled out the practice of “geo-blocking” – where a website blocks a user’s access to content, often videos or music, on the basis of their location, citing copyright rules – as a technical barrier affecting cross-border trade.
Sectoral inquiries can prove very onerous for the companies involved. Pharmaceutical firms complained that responding to the Commission’s 2008-09 inquiry into that sector required a large commitment in time and resources, with few tangible results. Be that as it may, online firms may conclude that the additional burden is worth paying to ensure that the Commission better understands a complex and fast-changing sector.