[Disclosure: the Campaign for Consumer Choice is supported by eBay]
There are a number of anecdotal examples of brand owners trying to bully online retailers and restrict them from selling their products online. However, it’s not often that these practices restricting consumer choice are identified and penalized through fair trade laws.
But this is exactly what has happened recently in Germany. Last month the German competition regulator, the Bundeskartellamtd fined the contact lens manufacturer, Ciba Vision, €11.5m for trying to prevent online retailers selling its contact lens products, in particular on eBay.
The investigation by the Bundeskartellamt also discovered that CIBA Vision operated a system that sought to keep retail prices unfairly high on eBay.
It emerged that CIBA Vision used a number of people whose role was to monitor eBay sellers’ prices and report those retailers that were undercutting the manufacturer’s recommended retail prices (RRP). CIBA Vision then requested that sellers raise their prices in line with the RRP. This practice was used successfully over a period of time.
According to German competition law, manufacturers are allowed to suggest retail prices for sellers, but that are forbidden from requesting that retailers enforce them. As a result of CIBA Visions systematic abuse of this law, their actions have caused illegal price fixing.
CIBA Vision denies being guilty of the charges against it, but it has also told the competition regulator that it won‘t take legal action against the fine either.
The magazine Computer Reseller News interprets the fine as a success for eBay‘s campaign against anti-internet trade practices.
Have you got any examples of similar attempts by brands to limit consumer choice online? Let us know in the comments below.
Picture (c) CIBA Vision
With Christmas around the corner, millions of us are in the process of buying gifts for friends and family.
According to a report in the Guardian once we enter December our ‘must buy presents’ mindset kicks in. Apparently we spend the first weekend in December browsing the shops for gifts and then use online venues to search and buy said gifts online, often at a discounted rate. This year it’s predicted to be on Sunday 6th of December and again on Monday 7th of December, known as Mega Monday.
eBay.co.uk is expecting almost 5 million visitors to snap up over a million Christmas gifts (on Sunday, 14 Christmas gifts will be bought every second). Research conducted by eBay shows that 89% of Brits will do their Christmas shopping online this year, an increase of 16% from last year. Other online retailers such as Asos are reporting high forecasts as well.
Added to this are thousands of high street retailers pushing sales in their online stores, for example John Lewis’ online store now accounts for 13% of the John Lewis division of the group – more than even their most successful high street store. This truly highlights just how online shopping has come of age.
But while millions of us all over the country are buying our well-intentioned Christmas gifts, it is inevitable that come Boxing Day and the New Year we’ll see just as many people turning back to online marketplaces, including eBay, to re-sell their ‘not-quite-right’ presents. Similarly many more people will need to sell existing goods that have become redundant with the arrival of bigger, better, newer and shinier Christmas replacements.
But our right to buy and sell freely online is still threatened by bullying brands, which want to prevent the sale of their products by non-official resellers. The EU Commission is currently reviewing the legislation that governs this but if brands get their way then going online on Boxing Day to offload unwanted gifts may become a thing of the past.
You can help us protect the right to re-sell unwanted Christmas pressies by joining our campaign. Or if you have been subjected to bullying by brands let us know what happened.
