Update: Distribution in the on-line world - EU rules under review

In November we reported that the European Commission had announced its intention to review EU distribution rules (see below).

The Commission has now opened a 16 week public consultation and asks for submissions to be made by 27 May 2019, via an on-line survey. The survey contains many questions and asks for views on any aspects of the block exemption and guidelines. It wants to know in particular whether:

• they provide sufficient legal certainty
• they are cost effective in terms of compliance costs
• the scope of the block exemption is too wide or too narrow
• the guidelines need amending

Do get in touch with us if you have questions or concerns, or if you would like to discuss your own response to the consultation.

(NB The application of the block exemption to the motor vehicle sector is excluded from the scope of this consultation as it will be the subject of a separate consultation.)

For more on challenges ahead for distribution arrangements see also the section on Frenemies in our publication Global Antitrust in 2019

Distribution in the on-line world - EU rules under review

(posted 27 November 2018)

Distribution arrangements for goods and services are governed by an EU “block exemption” (which expires on 31 May 2022) and some guidelines. These were last reviewed and amended ten years ago. Since then powerful platforms have risen to prominence and many new issues connected with on-line selling have appeared.

The European Commission has now announced a review “to determine whether it should let the Regulation lapse, prolong its duration or revise it in order to take proper account of new market developments since its adoption in 2010, notably the increased importance of online sales and the emergence of new market players such as online platforms”.

We expect that the review will focus in particular on certain issues flagged in 2017 by the Commission’s e-commerce inquiry, and the various cases opened, and in some cases decided, by it since then. These include:

• direct and indirect resale price maintenance practices (including the use of price monitoring software)
• price and other parity clauses
• restrictions on cross-border sales (such as dual pricing arrangements, re-routing customers to websites targeting other Member States, or prohibiting or discouraging cross-border deliveries or payments)
• selective distribution practices such as restrictions on use of on-line marketplaces and of price comparison tools
• requirements on selective distributors to operate “brick and mortar” shops
• dual distribution, where suppliers are in competition with their retailers (a key issue in the investigation opened by the Commission into Amazon in September)
• on-line digital content distribution
• issues linked to the perceived market power of large on-line platforms.

The Commission has published a three page procedural “evaluation roadmap” on the review. Any feedback on the roadmap is requested by 6 December. There will then be a 12 week public consultation in Q1 2019 on the substantive issues in the form of a questionnaire, followed by a “stakeholder workshop” in Q4 2019.