Ecommerce plays an integral role in the 21st Century marketplace. Online channels enable businesses to access new markets by providing innovative, high-quality and consumer-friendly services across the European Union. They empower consumers with a convenient, transparent way of accessing unparalleled choice of information. The benefits for competition, the EU internal market and European consumers explain why EU policymakers repeatedly emphasize the need to foster ecommerce.
The European Commission review of the EU Block Exemption Regulation and Guidelines on vertical restraints is an opportunity to update key rules underpinning the distribution of goods to position the modern marketplace for the benefit of European consumers. Whilst the current rules are sound in principle, eBay's community, both buyers and sellers, continues to experience wide-ranging and unfair restrictions on the sale of goods. Clarifications to the rules are vital to eliminate practices designed to inhibit competition and consumer choice in order to maintain artificially high retail prices.
eBay welcomes many of the Commission's proposals set out in the draft Regulation and Guidelines. Modest clarifications to eliminate bans on internet sales, prohibitions on the use of specific online platforms, limitations on the number of goods that can be sold online and conditions relating to the online sales prices will positively impact ecommerce in Europe. Valuable improvements to confirm that a supplier must bear the burden of proof to justify an online sales restriction, and that Internet sales bans are only justified on health and safety grounds are similarly important. These provisions remain consistent with the rationale of the block exemption, which is to award a privilege to certain restrictions only where they are presumed to benefit competition. They also recognize it should not be possible to discriminate against those businesses or consumers for whom the Internet is a preferred shopping channel.
At the same time, eBay regrets the Commission's choice of several proposals that are inconsistent with competition and consumer choice. For example, allowing a supplier to require a retailer to have a brick and mortar presence before they may sell online will increase costs to consumers without any qualitative benefits and protect inefficient, incumbent retailers. This provision addresses a "free-riding risk" that recent survey data disputes and which, even if substantiated, could be confronted by substantially less far-reaching measures. We also remain concerned about the Commission's proposal for a temporary relaxation of the rules for "new" brands. the exemption should be shortened and clarified to ensure it cannot be interpreted broadly to cover, for instance, sub-brands and new product lines, thus allowing brand owners to circumvent the Regulation and raise barriers to cross-border trade and to online selling. Finally, eBay believes these proposals are inconsistent with the need for policymakers to maintain a cautious approach to selective distribution practices. The safe harbour provided by the block exemption is a significant concession to suppliers and may only be used where there is a clear justification that the product concerned be subject to distribution restrictions.
The importance of this Commission review is underlined by the response to a petition eBay launched in July this year. More than 750,000 consumers and businesses in Europe committed their support to the views expressed above. Their powerful message urges the Commission to prohibit unfair restrictions to competition and consumer choice online and promote a 21st Century marketplace where ecommerce will prosper.