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Selective Distribution

At a Glance

eBay believes policymakers should support ecommerce as a key driver of competition and consumer choice.

But some manufacturers erect unfair barriers to online commerce – in the form of selective distribution rules - in an effort to hinder competition and restrict consumer choice.

  • Online commerce gives consumers more shopping options
  • Vertical restraints unfairly restrict eBay Inc. sellers’ ability to sell online
  • Clarifications to selective distribution rules would benefit consumers
  • 750,000 European eBay Inc. users petitioned the EU to break down unjust trade barriers in 2009
  • More than 14.000 EU online merchants called for effective measures against platform bans.
  • The German Federal Cartel Office (Bundeskartellamt) and several German courts have been highly critical w/r to platform bans.   

Issue in Detail

The COVID-19 outbreak has a devastating effect on our economy and society. It has forced a number of economic sectors, retail in particular, to become subject to various restrictions or even to closures. As a result of a significant decline in consumer spending, many small bricks-and-mortar businesses have limited options: they can adapt/reinvent themselves or close their store temporarily – or permanently in the most critical situations. For many retailers, online marketplaces remain the most relevant (if not the only) available option to continue reaching consumers and trade during confinement. 

COVID-19 has highlighted the growing importance of digital solutions and in particular those of online marketplaces, without which many retailers across Europe would have been forced to close their business. Instead, they have continued to sell, provided that local infrastructure allowed them to do so. However, we have observed that selling restrictions - introduced and enforced by brands - often still represented a barrier for SMEs to shift inventory online. 

eBay believes in removing barriers to online trade, in particular the prohibition established by brands to the re-sale of their goods on online marketplaces, which we believe is breaching article 101 TFEU. This is even more evident as several other developments – in addition to the COVID-19 crisis - have put significant pressure on SMEs. In particular, brands continue selling directly to customers or engaging directly with only selected marketplaces, whilst restricting free trade for authorised sellers. These practices limit the capacity of SMEs to sell online and conduct business. We believe that the COVID-19 crisis has shown the necessity of clarifying the existing regulation to allow such sellers to freely establish their online inventory. 

Therefore, we believe policymakers should support e-commerce as a key driver of competition and consumer choice. Nevertheless, some manufacturers erect unfair barriers to online commerce – in the form of selective distribution rules - in an effort to hinder competition and restrict consumer choice.

The great benefit of the Internet is the way in which it gives the initiative to consumers. Online shopping offers an alternative to many people from high-street shopping and it expands the selection of goods available to purchase. For other consumers, it may be the ONLY way to access certain products, because they are not available in the area in which they live. eBay believes policymakers should support ecommerce as a key driver of competition and consumer choice. However, some manufacturers believe this will threaten their profit margins and therefore erect unfair barriers to online commerce, in an effort to hinder competition and restrict consumer choice.

Vertical restraints are agreements between different entities in a supply chain - such as a manufacturer and retailer - that relate to the conditions under which the parties may purchase, sell or resell certain goods or services. One example of a vertical restraint is selective distribution. Whilst vertical restraints may be legitimately used to make product supply more efficient, there are many cases where eBay sellers suffer unfair and unjustified restrictions on online sales – preventing small businesses from accessing distribution and technology that they need to reach broader customer bases. These restrictions are designed to limit the availability of some products, with the aim of keeping prices high and denying competition that delivers choice to consumers.

Position on Selective Distribution

eBay does not question the use of selective distribution per se. We advocate clarifications to the rules so that selective distribution is only used to promote competition and the consumer interest, rather than a means to impose unjustified restrictions on online trading. eBay believes that policy should promote innovative, consumer-friendly ecommerce businesses. We oppose any calls for ecommerce only to be allowed on specific online-shops and not on open marketplaces. Such restrictions would act as a barrier to consumer-orientated, online- and mobile-focused businesses in Europe.