The Commission's E-Commerce Sector Inquiry: Analysis of Legal Issues and Suggested Practical Approach

Abstract

On 6 May 2015 the European Commission launched a sector inquiry into the e-commerce sector. The investigation will focus on identifying and addressing barriers to cross-border e-commerce in digital content and tangible goods. In particular, the inquiry will target restraints in distribution agreements and unilateral conduct by companies having a strong market position. The EU digital single market (“DSM”) is a key priority for the Juncker Commission, and the sector inquiry is part of the DSM initiatives. This article will consider the application of EU competition rules in the context of the sector inquiry, and provide guidance to potential targets on the relevant legal issues and the likely areas of Commission focus. The article first outlines different online sales models for tangible goods and digital content. It then considers whether Article 101 TFEU is applicable to these models. The next section discusses existing Article 101 enforcement action and proposes an alternative framework to apply Article 101 TFEU to contractual arrangements which are common in e-commerce. Finally, the article considers the possible use of Article 102 as an enforcement instrument in this context. Our conclusion is that the existing precedents and guidance are ill-suited to address competition issues in e-commerce, as they were established in a “brick-and-mortar” world. Furthermore, the divergent approach to online sales in the context of existing enforcement actions at the national level, is problematic. The Commission’s inquiry will be be an excellent opportunity to clarify these issues in a way that ensures consistency across platforms and business models.