Retail and Consumer Goods12.08.2022 Newsletter
Innovations in e-commerce: distribution-related antitrust law and gatekeepers
Antitrust law currently entails innovations for e-commerce on an almost daily basis. Besides the advancing regulation of gatekeepers, the "rules of the game" of distribution-related antitrust law have also been modernised.
Amazon in the sights of the authorities
The German Federal Cartel Office has decided to classify Amazon as a "gatekeeper" of paramount cross-market importance for competition (Sec. 19a German Act on Restraints of Competition [Gesetz gegen den Wettbewerbsbeschränkungen, GWB]). The Federal Cartel Office can thus now prohibit Amazon from conducting a number of practices that threaten competition on a selective basis and for a period of five years. A conceivable example is a ban on processing competition-relevant data of marketplace traders. Amazon's own offers may also no longer be given preference in product searches.
The European Commission has also targeted Amazon. It is looking specifically at how Amazon uses data from marketplace traders. It is also taking a closer look at the shopping cart field, known as the Buy Box, and the Prime programme. In this context, Amazon has offered, among other things, not to use data from retailers or logistics companies for its own business or for its own logistics service in the future. In addition, in the future, traders will be treated equally for inclusion in the Buy Box or as Prime sellers.
From the beginning of 2023: New Digital Markets Act
The new Digital Markets Act will come into force at the beginning of 2023, following its approval by the Council of Ministers in mid-July. Online platforms with a "gatekeeper" position will then be faced with a number of new obligations. These must be implemented within six months. Online platforms affected by this are, in particular, search engines, social networks, messaging services and online mediation services.
For example, the new duties include:
- “Gatekeepers" are not allowed - similar to Sec. 19a GWB - to use the data of platform users in competition with them and to give preference to their own offers in the ranking. This affects, among others, Amazon Marketplace.
- As regards messaging services, the major providers will now have to ensure compatibility with the services of other providers, which should open up the market for smaller competitors. This affects, among others, the services of Meta.
- Personal data collected by a "gatekeeper" through the provision of a service may no longer be used for the purposes of another service.
Innovations in e-commerce take account of digitisation
The European Commission's new regulations for vertical agreements entail interesting innovations for e-commerce. These result from a completed reform of the Vertical Block Exemption Regulation (Vertical BER). Their aim is to adapt the provisions of the regulation to digitisation:
- An exciting practical effect is that manufacturers will in future be able to demand different sales prices from retailers, depending on whether the goods are to be sold stationary or online (so-called dual pricing). This is possible as long as the price difference is proportionate to the distributor's different costs or investments in the respective distribution channel. How this is to be determined in practice, however, is still unclear.
- Further relaxations are permitted for contractual requirements concerning the manner of distribution, such as the presentation of the online store (so-called quality requirements). In the case of such requirements, it was previously necessary to ensure that internet sales were not disadvantaged compared with stationary retail, e.g. by imposing stricter requirements on an online store than on a retail outlet. Now, in contrast, the requirements can be designed differently. However, the requirements for the online store must not be so far-reaching that they have the de facto effect of restricting internet sales.
- What was previously possible through an ECJ ruling has now been explicitly confirmed by the European Commission: manufacturers can prohibit traders from selling via certain online platforms (so-called platform bans).
- Conversely, online platforms can prohibit their users from offering the service or product via their (own) direct distribution at a lower price than on the platform (so-called strict best price clauses). “Hybrid" platforms such as Amazon or Zalando, which are also competitors of the users, however, do not fall within the scope of the Vertical BER.
- Finally, there are also positive signals for dual distribution, as the European Commission has finally clarified what information may flow between manufacturer and retailer, e.g. in order to be able to calculate bonuses or advertising cost subsidies.
Further information can be found in our Newsletter "Updated antitrust framework conditions for distribution: 7 points that now change for companies".