E-commerce. Traditional grocery retailers online. Pure play ecommerce retailers. the (new) rules of the (new) game?
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1 E-commerce Traditional grocery retailers online Pure play ecommerce retailers the (new) rules of the (new) game?
2 Today E-Commerce: How can brand manufacturers prepare and adapt? An example: Amazon disrupting retail what potential impact on brands?
3 Pure play retailers and brands In categories where brands are reluctant to deal on online platforms to protect their brands image, platforms have publicly accused brand manufacturers of restricting competition and putting up barriers to trade. In some fmcg categories Amazon is already a significant player and is growing fast (cf Bain report) in direct competition with traditional retailers.
4 Brands under fire Adidas was informally notified that its ban on sales via online market places and the restrictions imposed on authorised retailers with regard to search engine advertising gave cause for serious competition concerns. buying goods online is a lot more difficult. It sounds like a paradox, but we still have a number of digital borders. It is high time we removed these barriers, which keep Europe s digital markets fragmented
5 AIM success in ecommerce sector competition inquiry Ms Vestager opened an inquiry a.o. into allegations that brands were restricting competition online. AIM set up a coalition of brand owners to fight the brand corner. Final inquiry report published in May 2017: There is no reason to revise the competition rules on brands distribution agreements (eg selective distribution) before the due date of 2022.
6 Point of interest Use of data in e-commerce: collection and use of data may impact competition Report does not aim to address data-related competition concerns BUT marketplaces: exchange of competitively sensitive data e.g. on prices or sold quantities between marketplace operators who act as online retailers on their platform and third party sellers o horizontal collusion risk o issue for e.g. Amazon o Also an issue for brand manufacturers opening their own online platforms?
7 Point of interest Competition concerns due to increasing number of brand manufacturers selling directly online manufacturers that directly sell online may request distributors for competitively sensitive data which could be used for anti-competitive purposes The reference caused concerns and confusion. DG COMP reassured AIM by saying that it would have very little impact: Intended only to address a very specific situation i.e. where a manufacturer would ask a retailer for its future retail prices (e.g. intended pricing over the next 3 or 4 months) or the retailers future commercial strategy, and would use that to align/adapt the retail prices in the manufacturer s own webshop/flagship store and/or where this would serve as a basis for an agreement/understanding on price alignment DG COMP clarified that manufacturers who engage in direct sales can still ask retailers for volume information, current retail price information etc without having to put in place Chinese walls in their organisation.
8 Amazon and AIM members Nature of Business Relationship no contact Only local agreements 76 International agreements on top only international agreement Source: AIM Industry Trade Survey 2017
9 How Amazon is Disrupting BRANDS outu.be
10 Specific UTPs on online platforms? The Commission is considering legal proposals against B2B unfair trading practices by online platforms (e.g. multiple role of platforms as direct sellers, hosts to other sellers and competitors to brands; control over data; unfair contractual terms and lack of redress). Is this an issue today for AIM members? Is it likely to be an issue in the next 5 years?
11 UTP ON LINE Discussion Other ask: any committee members interested in joining an AIM crossfunctional task force on e-commerce to prepare a Board session on AIM s future work plan?
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