‘Selective distribution’ to hamper eCommerce, retailers warn

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Amazon, eBay and other online retailers have asked the European Commission to reconsider draft rules which they claim would allow manufacturers in the 27-member bloc to prevent their products from being sold online.

The EU is about to rubberstamp rules that would "seriously hamper" eCommerce in the bloc, warned online companies yesterday (7 April) in a letter addressed to EU Competition Commissioner Joaquin Almunia.

The companies complain about "selective distribution," which allows manufacturers to insist that their products are sold in "bricks and mortar" shops and not by virtual retailers.

The online retailers, which include Amazon, eBay, Pixmania, Price Minister, Rueducommerce and 3 Suisse International, argue that the EU is preparing rules that would give manufacturers the legal basis to extend "selective distribution" across a wider range of goods.

"These provisions will scupper a whole bunch of [online] shops," argues one source, who said the draft laws are due for approval at the European Commission on 15 April.

The companies also accuse manufacturers of citing the EU's distribution rules as reasons to flout the sale of their goods online and to keep consumer prices high.

"We believe that the main reason for doing so is to restrict the availability of such products via eCommerce and hence maintain high prices to the detriment of the end consumer," reads the letter.

In the past, court cases in the EU involving the likes of cosmetics firm L'Oreal and German bag maker Scout ruled in the online retailers' favour.

A German court decided that Scout's attempt to prevent a German online retailer from selling the luxury bags online was anti-competitive.

French, Belgian and British courts rejected an appeal by L'Oreal that its trademarks were being infringed by virtual retailer eBay.

Luxury brand Moet Hennessy Louis Vuitton (LVMH) had more luck when it won a case preventing the sale of counterfeit goods on eBay.

In February, the Paris District Court ordered eBay to pay LVMH €200,000 in damages for allegedly paying search engines to direct customers to counterfeit LVMH products.

However, eBay is due to appeal the decision in France's Court of First Instance in May.

Although eCommerce in Europe doubles every three years, sales remain primarily at national level due to low consumer trust in cross-border purchases. The European Commission and the European Parliament are carrying out legislative reviews of the EU's eCommerce Directive to address shortfalls (see EURACTIV LinksDossier).

An EU survey in late 2009 on the consumption and sale of online goods across borders also concluded that Europeans are turned off by online shopping, mainly as a result of payment difficulties and a lack of trust in online consumption (EURACTIV 23/10/09).

  • 15 April: Commission to approve new provisions on 'selective distribution'.

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