eBay's Tod Cohen & Hanne Melin On Competition Law and New Commerce in MLex Magazine

Two years into the 2010 EU competition law regime on vertical restraints, we reflect on where market forces have taken us and what lessons are to be learned for future revisions of important EU laws.

In an article published in MLex Magazine, Tod Cohen and Hanne Melin, members of the eBay Inc. Government Relations team, describe how the current retail landscape is worlds apart from the polarization feared during the initial debates at the launch of the revision of the EU’s vertical restraints rules.  However, as the European Commission wisely adopted effort-based rules, retailers should be able to navigate the new world and remain relevant with their customers in what is nothing short of a retail revolution.

The new rules are not form-specific – in other words, they do not say that the right to use the Internet is a right to set up a website.  Instead, they are effort-based and make clear that the right to use the Internet is a right to use it to “reach a greater number and variety of customers”.  This is important as it shows that the European Commission understood that merely accessing the Internet is not enough if Europe’s businesses and consumers are to benefit from the internal EU market: access to the technology solutions that allow you to make effective use of the Internet must be ensured.

Few retailers master technology and so they look for partners for traffic generation, back-end solutions, website optimization, and much more.  Competition law enforcers must therefore be vigilant in guarding the right of retailers to access technology commerce solutions via partners such as online marketplaces.  Online marketplaces  empower both consumers and retailers.  For example, intra-EU cross-border trade grew six times faster on eBay compared to offline for the period between 2004 and 2010.  If (hypothetically) all EU trade were to be conducted at the lower online trade costs found on eBay, consumers could gain up to 45% of GDP from access to wider selection and competitive prices. See the findings of pioneering economic research here.