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E-Commerce: cartel office wants to protect online shops of retail

Friday, August 18th, 2017 | Gadgets

In future, the Bundeskartellamt intends to closely monitor the distribution structures of online trading. "If we want to save the inner city, we have to make sure that the small retailers can also use their chances on the net," said Andreas Mundt of the Frankfurter Allgemeine Zeitung (Paywall). Therefore, the competition authority should ensure that "there are no prohibitive restrictions on the distribution of small traders on the Internet". It is usually not enough to offer their goods on their own website. "They need access to price-cutting machines and third-party platforms to be truly visible," said Mundt.

In this connection, the cartel officer referred to the procedure against the manufacturer of the footwear Asics. This had forbidden its contractors the use of prissuchmaschinen. The antitrust authorities also conducted an appropriate proceeding against Adidas.
Platforms for expansion
According to Mundt, manufacturers are prohibited from prohibiting online sales via third-party platforms "if they can provide valid reasons for this". Small and medium-sized enterprises generated two-thirds of their online sales via third-party platforms.
It is difficult, on the other hand, to tackle the increasing market domination of Amazon or other IT corporations with the "classic antitrust law". "The discomfort is also due to the fact that large Internet companies, Amazon is only the most prominent example, seem to spread unstoppably and always occupy new segments," said Mundt. This is linked to the typical platform and network mechanisms, the use of data and the vertical integration of the platforms. This was "all designed for expansion". The more customers, participants and data have a platform, the more powerful they become. "The pure size continues to drive growth," said Mundt.

Unconventional answers required
However, the antitrust authorities would not have to watch the development. For example, after an intervention by the Federal Cartel Office, Amazon had abandoned the practice of requiring retailers to offer their products at a lower price than anywhere else on the Amazon trading platform. However, according to Mundt, many demands for regulation of these groups are "missed by competition, because they tend to hinder and promote competition and innovation." The digital world "might have unconventional answers in competition law," said Mundt.
A concrete example for new ways of the cartel is the construction of the consumer protection department, which is due to be completed in autumn. A first object of investigation could then be "the possible problems of Internet comparison portals", said Mundt. Already in the amendment to the Act Against Competition Restrictions (GWB) much was discussed about evaluations, ranking, commissions and the question whether the consumers actually received the best search results.
Mundt also announced that he would submit the first results of the proceedings against Facebook this year. The question is whether Facebook is dominating the market and whether the company is allowed to collect and use data from users in the way that has so far been the case.

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