Back to the future: the Commission opens e-commerce competition investigations

True to its current focus on all things digital, the European Commission has recently announced that it has launched three separate investigations into whether certain online sales practices prevent, in breach of EU antitrust rules, consumers from benefiting from cross-border choice in their purchases of consumer electronics, video games and hotel accommodation at competitive prices.

The context to the investigations is the Commission's Digital Single Market Strategy and its related sector inquiry on e-commerce, which suggested that the use of online sales restrictions were widespread throughout the EU (previous posts here and here).

The Commission is now examining whether the companies concerned are breaking EU competition rules by “unfairly restricting retail prices” or by excluding customers from certain offers because of their nationality or location (geo-blocking). 

The Commission’s rationale for the inquires is that these practices may make cross-border shopping or online shopping in general more difficult and ultimately harm consumers by preventing them from benefiting from greater choice and lower online prices.  Whether the evidence gathered from the investigations ultimately bears out this hypothesis is very much an open question. 

Whatever the wider benefits to the Commission of the sector investigation, it is questionable whether these investigations in themselves justify the full arsenal of an antitrust sector inquiry.  To judge by the press release, at least a significant part of the Commission’s concern appears to relate to classical infringements of competition law – resale price maintenance and contractual barriers to parallel trade – which merely happen to have come to light through the sector inquiry.  Time will tell whether this hypothesis is correct, or whether more specific types of online anti-competitive conduct are in fact concerned.

The European Commission’s E-commerce Conference

On 6 October, the Commission held a conference on its Preliminary Findings of the E-commerce Sector Inquiry: the entire day was made available via webcast (no geo-blocking for the Commission…).  

This follows the publishing of its Preliminary Report last month (which we covered here and here).  The conference was an opportunity for those working in industry, academia and competition authorities around the EU to comment on the findings.  A list of the speakers can be found here.  We have provided a summary of the main issues raised below.

Distribution

In today’s digital world, selective distribution systems are used for a very wide range of products and they are no longer limited to those products which are accompanied by a service.  It was suggested that using selective distribution to ban the use of third party platforms raised important competition law and political questions.

In the context of consumer goods, selective distribution can be beneficial, allowing brands to maintain consistency across retail channels and strengthening consumer protection.  However, it was noted that they can be detrimental to SME retailers, which often struggle to gain market share as a result of restrictive distribution practices.  The need for clear and objective criteria was also raised as an issue.  Some industry representatives called for greater parity between online and brick and mortar stores in terms of the products they are allowed to sell.  This view was not shared by all – others were quick to emphasise the differences between online and physical stores and the benefits of differentiating between these types of sales.  

Turning to the media content sector, the focus was on the use of exclusivity which gives rise to a similar dynamic to selective distribution in the goods economy.  On the one hand, the competition for exclusivity among media organisations has been a driver of innovation and investment in the production of new technologies (e.g. Ultra HD TVs) and has facilitated the creation of more choice among content providers.  On the other hand, distribution contracts are often awarded for lengthy terms and – in the Commission’s view – certain terms risk giving rise to anti-competitive effects.  One example which was discussed was the use of automatic renewal provisions, extending the duration of exclusivity; however, such terms may be justified on the basis of the considerable investment needed to create new content. Such terms will need to be considered on a case-by-case basis.

Cross-border access to content

The paradox that 50% of EU citizens shop online but only 15% shop cross-border was raised as an important issue.  The volume of complaints about geo-blocking directed to National Competition Authorities varied significantly.  Opinions differed on the prioritisation of geo-blocking and territorial restrictions generally.  

The discussion on consumer goods focused on the ability to sell across borders.  Legal fragmentation and lack of harmonisation, personalised products and distribution capacity were all identified as reasons why cross-border sales may be limited.  In addition to technical and logistical barriers, selective distribution systems were also considered to play a part in the availability of products in specific regions. 

Geo-blocking occupied a large part of the discussion on online content distribution.  Industry representatives argued that the territoriality identified in the report is not the result of active efforts by distributors to fragment the market.  Instead, it was said to reflect diverging national demands and differences in the level of investment that broadcasters are prepared to make in each territory.  The possibility of pan-European licences was dismissed as being prohibitively expensive as well as having the potential to be anti-competitive. 

Pricing

Issues surrounding pricing and pricing mechanisms were raised throughout the day.  There was general agreement that the competitive impact of such mechanisms in e-commerce will depend heavily on the level of market power of those imposing the prices.

An interesting point on price discrimination was raised in the context of consumer goods.  If price discrimination is banned, firms adapt by changing their pricing and product strategies, which could harm or benefit consumers depending on the market.  It was noted that vertical restraints could be used strategically by suppliers in the marketplace. 

Pricing mechanisms were also raised as a concern in relation to online digital content.  It was suggested that it might be necessary for the Commission to examine restrictive payment structures in contracts and perhaps regulate the area to ensure a level playing field between mobile platform providers and application developers.

The Commission has invited stakeholders to submit comments on its Preliminary Report by 18 November 2016.  It remains to be seen whether the commentary put forward during the conference and the divergence of industry views will be reflected the Final Report.  Past sector inquiries tend to suggest that the changes between the preliminary and final reports may be few and far between…

EU Court to rule on ability of luxury brand owners to control online distribution

Following a dispute in Germany between perfume and cosmetics manufacturer Coty and one of its retail distributors (Parfümerie Akzente), a German court has sought clarifications on the proper application of the EU competition rules in respect of online distribution to the Court of Justice of the EU ("CJEU").  The case will likely decide how much control luxury brand owners have over distribution of their products on online platforms such as Amazon or eBay.  Whilst not a party to the German case, Amazon.com has recently sought permission to intervene in the case in order to ensure the views of third party online platforms are heard.

The original dispute arose in Germany after Coty sought to prevent Parfümerie Akzente from making sales through Amazon’s market place. 

On 18 July 2016 the Frankfurt Court of Appeals requested the CJEU to provide a preliminary ruling on whether a restriction by luxury brand owners on the use of online platforms is compatible with Article 101 of the Treaty on the Functioning of the European Union (“TFEU”).
 
Questions to the CJEU

The CJEU has been asked to consider the following:

  • Is the use of selective distribution systems by luxury brand owners to protect the ‘luxury image’ of their products compatible with Article 101(1) TFEU?
  • Is a general ban on online platforms compatible with Article 101(1) TFEU, even if the platform meets the criteria of the selective distribution system?
  • Does prohibiting the use of online platforms constitute a restriction by object under Article 101(1) TFEU as it restricts customer group retailers can sell to and their ability to make passive sales?

For luxury brand owners, the ability to have some control over the retail environment, whether online or offline, is an important consideration when setting up a selective distribution policy.  The nature of the products concerned will also be relevant in assessing whether restrictions are permissible.  Whether Amazon will be able to argue its case will however depend on whether the Court grants it permission to intervene. Demonstrating sufficient interest has historically been a difficult hurdle for companies to overcome, particularly where they have not been involved in the proceedings before the national court.  

Background to online selective distribution

The European Commission Guidelines on Vertical Restraints (“the Guidelines”) allows a supplier operating a (qualitative) selective distribution system to impose equivalency requirement restrictions on authorised distributors in respect of online versus offline sales.  For example, obligations on authorised retailers to meet equivalent criteria in respect of online product presentation and sales advice as applies to their bricks and mortar sales.  However, Coty was seeking to impose an outright ban on the use of third party platforms (such as Amazon marketplace) and no doubt sought solace in the Guidelines which do specifically permit restrictions on sales through third party internet sites where those sites display the platform’s name and/or logo (Guidelines, paragraph 54). 

In a number of Decisions on selective distribution agreements, the German Bundeskartellamt ("FCO") has taken a dim view of prohibitions on online sales.  For example, the FCO’s investigation into Sennheiser’s selective distribution system resulted in the removal of a prohibition on sales on third-party platforms.  In that case Amazon itself was already an authorised distributor but the ruling opened up the possibility of sales being made over third party platforms, for example Amazon Marketplace.  In its investigations into Adidas and ASICS the FCO also found that general prohibitions on sales via third party platforms in selective distribution systems restrict intra-brand competition, and harmed small and medium-sized distributors. 

Conclusion

Brand owners and online retailers will be watching this case with interest as the CJEU will clarify a central question of whether it can ever be acceptable under competition law to restrict internet sales in order to protect brand image.




The e-Commerce sector inquiry gets under way

Yesterday evening, together with a few colleagues, I attended a seminar on the European Commission's e-commerce sector inquiry, which was launched in May this year.  The presentation was given by Thomas Kramler, who heads the Commission task force running the inquiry.
Thomas provided some interesting insights into the scale and scope of the inquiry.  In the UK alone, some 300 companies have received lengthy questionnaires. The recipients are digital content service providers (e.g. video-on-demand providers), online platforms (marketplaces such as eBay and price-comparison sites) and e-tailers (both online-only ‘pure-players’ and ‘hybrid’ (online and bricks-and-mortar) retailers).  

The inquiry will focus on private (contractual) barriers to cross-border trade, in particular in areas where e-commerce is already widely used such as clothing and consumer electronics. It is hoped that the information gathered will complement other portions of the Commission's 'Digital Single Market' initiative, which will examine public barriers to trade arising from copyright rules, consumer protection laws and the like.

The inquiry will in particular examine contractual clauses which create barriers to passive sales, hinder online sales generally (e.g. bans on sales via online platforms such as eBay or Amazon marketplace) and restrict price competition to the detriment of consumers (e.g. classic resale price maintenance (RPM) clauses and most favoured nation obligations (MFNs)).

Thomas admitted freely that the Commission had not actively investigated vertical restraints in the last decade. However, he indicated that the inquiry was likely to lead to enforcement which may clarify the Commission's approach to developments in distribution agreements which have arisen in response to the huge popularity of online commerce.

On timing, Thomas explained that the Commission is hoping to issue a preliminary report in mid-2016.  Following a public consultation, the Commission’s final report is due to be published in early 2017.

For those interested in more detail about the e-commerce inquiry, I’d recommend reading Sophie and Elisabetta’s recent article on the topic published in Competition Law Insight, which you can access here.  You might also want to take a look at Elisabetta’s Cookie Jar post here and Thomas' slides here.  The European Parliament has also very recently chipped in with its thoughts on competition policy in digital markets with this 80-page report.  There is clearly a lot going on in this space and so we will be sure to follow up with further comment. Watch this space.

Most-favoured-nation clauses in e-commerce: a guest economist’s view!

The CLIP Board is delighted to welcome its first guest blog post, which has been kindly written by Dr Avantika Chowdhury of Oxera.  Avantika brings a much-needed economics perspective to the vexed question of MFN clauses.  For those who would like to read more on this subject, Oxera has also recently published an article on the topic in its regular Agenda series.

oOo

The use of ‘most-favoured-nation’ (MFN) clauses in e-commerce has recently become a closely debated topic in the antitrust world and is causing competition authorities some headaches. 

For those not too close to the developments, several national competition authorities (NCAs) across Europe have recently been grappling with competition issues in a variety of online markets including online hotel bookings, books, motor insurance and sports good retail. Among these, the hotels and books cases have been creating the most waves so far. Both cases involve MFN clauses, which are essentially agreements between a supplier (e.g. a hotel) and a specific distributor/retailer (e.g. a travel agency) stipulating that the supplier will offer the best available terms to the distributor/retailer. The scope of ‘best available terms’ does vary. For example, an MFN may require the supplier to offer the best available terms among those offered to all other sales channels (a ‘broad’ MFN), or it might require that the terms are best among those offered to specific sales channels or available through the supplier’s own distribution channel (a ‘narrow’ MFN). Although MFNs are not considered anti-competitive per se and in some circumstances will even have efficiency benefits, the authorities are concerned that certain types of MFNs may restrict competition among sellers and/or distributors/retailers. Broadly speaking, the potential concerns are the following.

  • Softening of competition in the downstream market, including anti-competitive foreclosure: This in essence arises from the fact that the distributor (or retailer as the case may be) with an MFN is assured of getting the best terms and hence is protected from competition, including from potential entrants. 
  • Softening of competition in the upstream market: An MFN, depending on its scope, may restrict a seller’s ability to offer selective discounts through specific channels. If very broad MFNs are used by a majority of the upstream and downstream firms, it can reduce the incentive of sellers to reduce prices.   
There is also a concern that MFNs or similar parity provisions can be used as a tool to implement collusive behaviour, especially in online markets where monitoring of rivals is easier. 

In the online hotel booking cases, the focus thus far has been on the potential restriction of downstream competition. More than 10 NCAs have been investigating agreements between hotels and online travel agents such as Booking.com and Expedia, which potentially prevent/restrict price competition. Interestingly, although the key issue(s) being looked at across various jurisdictions are similar, earlier this summer the Commission expressly decided not to launch its own investigation. It remains to be seen whether this changes following recent developments (e.g. the recent success of Skyscanner in persuading the UK Competition Appeals Tribunal to quash the OFT’s decision for the UK market - see here).  

The concern in the US e-books case, on the other hand, was about collusion. In this case, both the US DoJ and the European Commission investigated Apple and five publishers for price-fixing. While the Commission settled its case, the US investigation culminated in a decision which found that MFNs between Apple and each of the publishers served as a tool to implement explicit collusion that was aimed at stopping Amazon’s discounting of e-books and at increasing the prices above the ‘wretched $9.99’ price. It is notable that the MFNs, by themselves, were not found to be anticompetitive in this case (see US District Judge Cote’s opinion here, and an excellent summary here). The more recent debates about this market have Amazon under the spotlight, with calls by publishers in Germany and the UK to open a competition investigation into the market (see here). 

So, how do MFNs affect competition? 

The answer to this (fortunately or unfortunately) depends on a few factors, including whether the distributor is acting as an agent; whether the MFN is about wholesale terms,  or retail prices; the breadth of the MFN; the position of the parties to the agreement and the extent of use of MFNs in the market more broadly. 

To illustrate, I will focus below on the specific example of a retail MFN in an agency business model, i.e. where a supplier offers a product to consumers through retailers who merely act as ‘agents’ (with no involvement in price setting) and pays each agent a commission for every product it sells. For example, if a hotel H advertises a room through two online travel sites (Site 1 and Site 2), H will set the prices available through each site (in the figure, these are P1 and P2) and pay a pre-agreed commission to each (C1 and C2) based on their bookings. Suppose also that an MFN between H and Site 1 stipulates that H cannot advertise the same room for a lower price through an alternative travel site (e.g. Site 2) or even through H’s own website (i.e. it is a ‘broad’ retail-level MFN). 

Example of retail MFNs in an agency model

Such a broad MFN could restrict competition in a number of ways. First, it can reduce the incentive of Site 1 to compete for reduced commission rates. This is because, in the absence of the MFN, H has the incentive to ‘reward’ the site that offers the lowest commission rate by offering to advertise the lowest prices through this site to encourage sales. However, the broad MFN prevents H from ‘rewarding’ low-commission sites (e.g. Site 2) without extending the ‘reward’ to Site 1.. Hence, in presence of a sufficiently broad MFN, Site 1 will not be concerned about its competitiveness in the retail market even if it increases its commission. This in turn raises the likelihood of consumer harm, on the presumption that higher commissions ultimately feed through into higher retail prices.

MFNs can also restrict competition by undermining market entry and expansion. For example, a new travel site that wishes to offer lower commissions to H in order to be able to advertise lower prices to consumers and gain market share, will not be able to do so without facing a matching low price from Site 1. Hence low-cost/low-price entry and expansion may be foreclosed. Existing literature suggests that the larger the party (or parties) with the MFN(s) in place, the more likely the foreclosure effects. Given that innovation in e-commerce often arises from new business models, there is therefore a broader concern regarding potential dampening of innovation in e-commerce. 

It is worth noting, however, that some recent academic literature (for example, see here) shows that in certain situations, retail MFNs increase incentives to enter due to the increased profits available (this occurs, for example, when commissions are based on profit sharing and when an entrant’s business model is similar to the incumbent’s). It is also notable that there has been little assessment of the actual benefits of MFNs, although that they exist is accepted by economists and authorities (see, for example, the DoJ’s workshop here). One of the key benefits of MFNs is to prevent hold-up of investments by retailers/agents, because MFNs, by preventing the supplier from offering better terms to other retailers and/or undercutting via the supplier’s own sales channels, can prevent others ‘free-riding’ on a specific retailer’s investment (think of eBay and consumers using its reviews to make an informed decision but ultimately buying through another platform or through the supplier’s own site which offers lower prices). MFN clauses can also benefit consumers directly by, for example, allowing retailers to advertise their ‘lowest price offers’, and hence reduce consumer search costs. However, the real question is whether such efficiency arguments hold in specific online markets.  

All in all, lots of questions, not so many answers. The hotels investigations by the various NCAs will hopefully provide some answers quite soon. Now let’s just hope they come up with similar answers… 

Avantika Chowdhury, Oxera

The views expressed here are solely those of the author and do not necessarily reflect those of Oxera

'Care'-ful with know-how and trade marks

Recent developments (in particular the Motorola / Samsung decisions relating to the use of standard essential patents, alluded to on this blog here) may suggest that competition law and IP are unhappy bedfellows, with the former hampering IP right holders' ability to obtain injunctive relief in respect of their patent rights.  

Last week's judgment by Mr Justice Henderson in the High Court provides something of a corrective. In Carewatch Care Services v. Focus Caring Services et al, a competition law defence was raised in respect of a claim that the defendants had breached post-termination restrictions in a care home franchise agreement.  

The raising of 'euro-defences' in general commercial litigation is sometimes viewed as something of a try-on. Generally, it is all too rare to see the limits to the competition rules, with competition authorities all too rarely giving reasoned analysis as to why certain agreements or practices do not infringe.

Here, there was no criticism of Focus for having raised the competition law defences, but those defences did not hinder the claimant’s enforcement of the contractual restrictions.  Applying Pronuptia de Paris, as suitably adjusted for a services, rather than a distribution, franchise, Henderson J robustly dismissed those defences. He particularly emphasised the need for the franchisor to have the ability to protect its know-how and reputation in a setting characterised by the intensely personal relationships between carer and care-home resident - to do otherwise would be to allow the former franchisee to benefit from the knowledge imparted to it by the franchisor to set up in competition with it.  An injunction restraining breach of the post-termination restrictions was therefore allowed.

Sophie Lawrance

Competition law issues in commercial contracts

I recently recorded a webinar on general competition law issues in commercial contracts. Bearing in mind this blog covers the interplay between competition law and IP, the reason for bringing what is a relatively general session to your attention is that I touched on (albeit briefly) IP licensing issues in the course of the webinar. It is available here and will be streamed live from 12.30pm today

Rosemary Choueka

Online advertising restrictions in the spotlight again

Following on from the Roma-branded Mobility Scooters case earlier this year, the OFT has announced a second decision on mobility scooters. The full text is not yet available, but it is clear that in Pride the OFT’s concerns were similar insofar as online advertising was concerned.

Various OFT guidance (now also adopted by the CMA) has long emphasised that restrictions on advertising can be potentially problematic, in particular if parties are prevented from advertising prices, or prices below a minimum or recommended level (see paragraphs 3.24 here and 3.14 here).  This was also made abundantly clear in the OFT’s 2003 decision in Lladró (see paragraphs 68-77).  The importance placed by the OFT on preserving consumer trust in online markets was also stressed in a 2010 market study on online behavioural advertising and price targeting (see Chapter 5).   

It is therefore hardly surprising that Pride’s conduct was sanctioned.  Between 2010 and 2012, Pride had entered into arrangements with eight of its UK-wide online retailers in respect of certain mobility scooter models.  These prevented the retailers from advertising prices online which were lower than Pride's Recommended Retail Price (RRP).  The OFT directed the parties to bring any such arrangements to an end and to refrain from entering into similar arrangements in the future.  All parties concerned benefited from the immunity for 'small agreements' provided for in the Competition Act 1998 - no financial penalties were imposed.

We are likely to see similar cases in the near future for (at least) two reasons. 

  • First, the CMA will clearly continue to focus on online and emerging business models.  Its Annual Plan for 2014/15 highlights consumers’ increasing use of the internet to compare products, goods and services and stresses the importance of ensuring that consumers have confidence in online markets. The CMA also launched a ‘big data’ research project yesterday designed to identify sectors of the economy where online commerce is developing more slowly than might be expected, so it can investigate whether this is the result of anti-competitive behaviour (see the ‘Extend competition frontiers’ subheading). 
  • Second, both the Roma and Pride decisions stressed that consumers with limited mobility may find it difficult to visit more than one physical store.  The CMA’s recent Prioritisation Principles explicitly note a concern for ‘disadvantaged’ consumers, who may be particularly vulnerable to exploitation.

Anyone looking at advertising restrictions would therefore be well-advised to bear in mind the relevant consumer demographic. This will be relevant to those involved in the distribution of healthcare products.

Osman Zafar and Claire Davies

On line (r)evolution? The prospects for selective distribution in an internet future

The application of competition law to online distribution models has been something of a theme for several competition bodies recently. The French, German and UK authorities have all either taken decisions or made statements about various aspects of online retailing. Reflecting the considerable engagement of national competition authorities (NCAs) with this issue, the CJEU has dealt with various Article 267 references:  recently, it has criticised some aspects of selective distribution in the PierreFabre case and given guidance on selective distribution issues in the motor vehicle sector in the Auto 24 judgment.

Just before Christmas (20 December), in a pre-Christmas message of the type so beloved of competition regulators, the OFT announced a consultation on proposed commitments to be given in respect of its investigation into online booking of hotel rooms (see here).  The Competition Commission’s Provisional Findings Report in its private motor insurance investigation also touches on the issue of the impact on competition of Platform MFNs in price comparison websites (see paras 68 onwards) and the OFT’s Mobility Scooters case also reflects current NCA focus on internet retailing (here).

The most recent attempt on an EU wide level to grapple with the competition analysis of behaviour in online retail, and with the related thorny topic of selective distribution, was in the Vertical Restraints Guidelines, published in 2010.

Against this background, and the growth of internet retailing generally, the German competition authority, the Bundeskartellamt (which has been very active in assessing various online business practices including those of companies such as Sennheiser and, more recently, Gardena, published a discussion paper for its working group on Competition Law which discusses vertical restraints in the online context.

The BKA reviews a variety of provisions encountered in vertical supply/distribution contracts and how they may particularly affect competition in the internet environment. It is an interesting overview of the classic analysis of vertical restraints (including the problems of double –marginalisation and free-riding). It also considers ways in which the growing use by consumers of the internet may require a rethink of previous approaches to aspects of vertical contracts such as MFNs and selective distribution. The paper as a whole is worth reading for those with an interest in the competition approach to the distribution of consumer goods. Notably, however, the BKA appears to be particularly sceptical of the benefits of selective distribution, commenting that case law suggests that, unless objectively justified, “selective distribution systems are to be considered as restraints of competition by object, which necessarily affect competition in the Common Market”  - although it does conclude the this needs to be assessed on a case by case basis.

The BKA is not persuaded of the consumer benefits of provisions in selective distribution agreements preventing the use of online market places. It notes (with some apparent disappointment) that such prohibitions are not regarded as hardcore by the EU Commission, but takes comfort from the Pierre Fabre case, remarking that, as the CJEU was sceptical about the arguments that competition restrictions are justified to protect brand image, this “challenges the explanation in the guidelines on this matter.”

Of real concern for brand owners as a possible straw in the wind, the BKA specifically comments that: “Irrespective of the scope of the hardcore restriction, the benefits of the Block Exemption Regulation can be withdrawn in cases where an ‘excessive clause’ has effects in a specific case that are incompatible with Article 101(3) TFEU.”  This is of interest because National Competition Authorities (as well as the EU Commission) have the power to withdraw the protection of the Vertical Restraints Block Exemption in certain circumstances. One of the specific examples of grounds on which a block exemption may be withdrawn by a Member State (mentioned in the recitals to the block exemption regulation itself) is where there are parallel networks of selective distribution agreements which adversely affect competition.

Of course, it is only possible for an NCA to exercise this power where it considers the conditions of competition are peculiarly national so that there is a “distinct geographic market”. However, the facts that:

  • the BKA has explicitly mentioned withdrawal as a possibility; and
  • that it is critical of the effect of any restrictions on internet trade on consumer welfare; and that
  • it (and other NCAs) have taken the lead on challenging the approach taken by branded goods manufacturers to on line sales in a number of cases

are relevant and interesting – and should be of some concern. Branded goods suppliers took enormous trouble during the consultation period before the adoption of the Vertical Block Exemption and Guidelines to explain the long run benefits of selective distribution and of certain restraints on internet sales. Some of those arguments appear now to be likely to be powerfully challenged. Those who believe that selective distribution of branded goods has a positive role to play in the on-line era and that it can deliver real benefits for consumers should regard the BKA paper as an invitation to engage powerfully in the debate, and to do so at an early stage. The BKA’s summary (on page 26 of its Background paper) speaks for itself:

The manufacturers of these products are facing increased price competition and are justifying their controversial practices by claiming that they are trying to maintain well-established specialist trade structures, specific services or a certain brand image. The interpretation of the VRBER's hardcore restrictions are of particular significance in this respect. Another issue of growing importance is the question as to what extent selective distribution is the right form of distribution for the respective products and if the selection criteria are the most suitable.

Pat Treacy

The BKA paper (in English) can be found here.

EU authorities coordinate in bringing investigations against Amazon to a close

Given all that's been happening on the competition/IP interface in recent months (and the aversion of most competition lawyers to looking at contracts),  it's easy to see why 'most favoured nation' clauses may not been at the forefront of our minds.  However, building on the (brief) antitrust analysis of such clauses in the US and EU e-books investigations (see here), as Christmas shopping panic sets in the UK and German competition authorities may have done us all a favour...*

Both authorities have recently brought to a conclusion parallel investigations into Amazon's 'price parity' policy. Amazon had insisted on contractual provisions which meant that sellers on its Marketplace platform had to offer their lowest prices through Amazon, in effect preventing third party sellers from offering the same products for less on other platforms such as eBay or indeed their own sites online.  Both the OFT and the Bundeskartellamt only agreed to close their investigations once they were happy that not only had Amazon ceased to have its 'price parity' policy in place, but also that it had communicated its change of policy to third parties.

The cases are another good example of the appetite of national competition authorities (NCAs) for looking into problematic vertical restraints, and the coordination that one can now expect to be a given through the European Competition Network (ECN).

Speaking of which, of course many of the policies pursued by giants of the online world such as Amazon are set on a global basis.  For a interesting view from the other side of the Atlantic (albeit with little comment on antitrust issues), see here

* Depending of course on how reliant one is on Amazon!

Osman Zafar