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Ciba Vision fined €11.5m for restricting eBay sellers in Germany

CIBA Vision

[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

Mega Monday is coming…

ebay_Christmas

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.

How a bottle of perfume could cost EU citizens their consumer rights

Lock and secure
[Disclosure: the Campaign for Consumer Choice is supported by eBay]

You may have seen the news today that an injunction issued by the French Commercial Court of Paris has fined eBay €1.7 million saying eBay had failed to comply with an injunction issued last year, which prevented eBay’s French users from buying and selling authentic Christian Dior, Kenzo, Givenchy and Guerlain perfume products on any eBay site in the world.

eBay’s official statement said that it had complied with the injunction and filtered out listings of authentic LVMH products. They went on to state that today’s ruling strikes a blow against consumer rights for citizens across the EU and represents the thin edge of the wedge for consumer choice across all of online.

The results of the case worryingly reveals that, in France at least, if you buy perfume brands from Louis Vuitton then you don’t actually buy the right to re-sell those perfumes. Even worse is that the case highlights a flaw in the founding idea of the Internal Market: free trade and the ability of people to buy and sell goods across European borders.

Tamebay’s Chris Dawson puts it succinctly when he writes

“…what’s important is that French eBay users who own a bottle of perfume don’t have the right to sell it. French users are blocked from buying perfume from any eBay site world wide, not just from eBay France. French consumers are being discriminated against and have lost the freedom to purchase perfumes from other EU countries. For the French the EU Single Market no longer exists”.

A statement from eBay’s General Manager in France, Alex von Schirmeister suggests that the ruling will impact directly on consumers and is likely to be over-turned in the “higher courts”. A full transcript can be found below and the full statement from eBay can be found online here:

“Today’s outcome hurts consumers by preventing them from buying and selling authentic items online. The injunction is an abuse of ‘selective distribution’. It effectively enforces restrictive distribution contracts, which is anti-competitive.
“We believe that the higher courts will overturn this ruling and ensure that eCommerce companies such as eBay will continue to provide a platform for buyers and sellers to trade authentic goods.”

Mr von Schirmeister added, “The fine itself is disproportionate given that eBay complied with the Injunction. It is out of step with our legal victories in France, UK, Germany, Belgium and the US.” The fine itself is disproportionate given that eBay complied with the Injunction. It is out of step with our legal victories in France, UK, Germany, Belgium and the US.”

eBay plans to appeal against LVMH’s original injunction and hearings are scheduled for Spring 2010. The Campaign for Consumer Choice will provide more information on these cases as we get it and update you as to what the implications will be for consumers who buy and sell goods online.

Thank you for signing our petition!

eBay Consumer Choice petition poster: EU

Back in July a petition was launched by eBay calling on EU citizens to make their voice heard and support the right to trade freely online within the EU. At present, EU laws give brands and companies the right to stop people from buying and selling legitimate products online. As a result, consumer choice is being limited and consumers are being prevented from accessing better value goods legitimately online.

The EU Commission is in the process of reviewing and modifying these vertical restraints laws, and on 16th September we presented the results of our petition, calling on the EU to ensure that it took into account the views of ordinary EU citizens who were online retailers and consumers. An outstanding 750,000 of you signed eBay’s petition and sent a clear message to EU policymakers.

While we hope the EU Commission listens to this powerful call for free and fair online retail, there will continue to be issues that arise which will impact on consumer choice online.

Meglena Kuneva, European Commissioner for Consumer Affairs came to the same conclusions in a number of recent studies and reports published by the Commission.

The Consumer Choice campaign will continue to track these issues, campaign for consumer choice across the EU and we want you to get involved and help.

You can find out more about the Campaign for Consumer Choice by taking a look at our short film, which explains what the campaign is all about in 60 seconds. You can also add us on Flickr, Twitter, Facebook, YouTube and subscribe to our RSS feed to discover the final decision taken by the Commission and keep up to date with the campaign in general.

From the Consumer Choice campaign, thanks again for all your support!

A European blueprint for consumer choice

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Meglena Kuneva, European Commissioner for consumer affairs who recently revealed the results of mystery shopping exercise carried out across Europe has just published her blueprint for Consumer Policy in Europe.

The blueprint is Kuneva’s vision for how trade should look across the EU in the future and focuses specifically on using technology and increasing consumer trust to achieve its aims.

Echoing our Consumer Choice campaign’s call for fairer online trade practices that offers consumers the greatest choice and value, Kuneva’s calls for an integrated European market that maximizes the opportunities presented by the internet, such as innovative payment systems.

She also wants to see a clamp down on artificial barriers that prevent cross-border competition and encourage anti-consumer trading practices, for example, confusing pricing and hidden fees.

Kuneva also believes that consumer policy must “fight protectionist instincts” which can include both national protectionism as well as commercial protectionism we have witnessed by some brands who want to keep their prices high artificially for online retailers.

As a result, Kuneva hopes that this will improve customer’s experience but believes the EU Commission must support this approach:

“The European Commission must strive to develop a vibrant and innovative market in which citizens are keen to participate. This market must be grounded on a regulatory system that promotes trust and it must build on new technologies.”

Here at the Campaign for Consumer Choice, we know consumers are keen to participate in this “vibrant and innovative market’. Not only that, they are participating and want greater support to do so.

It’s now time for the Commission to listen to its Commissioner and the 750,000 European Citizens who signed our petition to request the EU’s vertical restraint laws be modified to support the kind of consumer society Kuneva wants to see become a reality.

What’s Consumer Choice all about?

Metro eBay pic

Alia Papageorgiou, European Affairs Editor for the weekly newspaper www.neurope.eu as well as editor of a column at runninginheels.co.uk tells us why the campaign for Consumer Choice is important, and provides insight into the inner-workings of European policies.

It’s hard not to notice when you get off the Metro at Schuman, Brussels’ main underground stop. And it’s equally impossible to pass by the foot of the European Commission’s building, the Berlaymont, without pausing.

No matter which Metro exit you take, all you see in front of you are huge posters showing a pile of petitions, the eBay logo, an EU flag, and the number ‘750,000’.

So what’s this all about? What’s the background to eBay’s Consumer Choice campaign?

At the moment, outdated European law gives companies permission to stop people selling legitimate products online, regardless of whether the goods are new or second-hand. What the campaign is trying to do is help EU institutions bring this law up-to-date and assist in one of its ultimate goals: “no barriers to trade.”

The European Commission has a number of regulatory instruments at its disposal, but one used most often is a ‘Regulation’. Regulations usually have a re-appraisal or review date attached to them so that every few years EU officials must go back and review what was set out originally and ensure it is still relevant and up to date with current market and legal issues.

It’s a chance to iron out the kinks, make sure that the regulations imposed are still applicable today and will still be applicable in the future.

The current rules that apply to online retailing (called ‘vertical agreements’) were set out by a European Commission Regulation 10 years ago. This means the regulation pre-exists the rise of the web and of buying and selling goods on the internet.

As a result, they let brands and manufacturers block the sale of products online; limiting the range of choice and value available to consumers.

This is something the Commission has already recognized and commented on:

“Two major developments have marked the 10 year period following the adoption of the current rules: an increase in large distributors’ market power and the evolution of sales on the Internet”.

Not only that, but bringing the current regulation in line with the internet-age is a clear objective for the Commission.

As Viviane Reding, EU Commissioner for Information Society and Media, recently commented: “Achieving a Digital Single Market is a top priority for Europe.” She added:

“We won’t have a real Digital Economy until we remove all barriers to online transactions, also for end-consumers. This must be on top of the list of all policy initiatives to re-launch the single market project.”

It’s great news that the Commission recognises the importance of the internet as a tool for cross-border trade that can improve consumers’ access to goods. However, what the Commission really needs to hear now is more voices; more online buyers and sellers like you and I. When we decide to buy a book or a pair of popular brand boots for winter, ‘at the click of a button’, we want to do so without restrictions limiting our choice.

It’s not too late to make your voice heard. Share your experiences of buying and selling online – both good and bad – with us and remind the EU Commission why the internet is a powerful tool offering consumers the best deal wherever they live in Europe.

Photo courtesy of A. Papageorgiou

6 out of 10 European shoppers are blocked from purchasing their favourite products abroad

Kuneva_EU
A new report by the EU Commissioner for Consumer Affairs, Meglena Kuneva, sheds light on the difficulties of cross-border shopping.

A vast mystery shopping exercise was carried out across Europe: shoppers tried to purchase a range of 100 popular products and the results were revealing. The research found that:

• 60% of cross border transactions could not be completed by consumers because the trader did not ship the product to their country or did not offer adequate means for cross border payment.
• In 13 countries out of 27 and for at least half of all product searches, consumers were able to find an offer in another EU country which was at least 10% cheaper than the best domestic offer.
• Shoppers in 13 EU countries could not find domestic online offers for at least 50% of the products which they searched for, but found them in another EU country.

Meglena Kuneva, Commission for Consumer Affairs notes in a recent speech that:

“As we stand today, we cannot shop cross-border online within the EU. There is no European retail market online, but instead 27 inefficient mini-markets. We have the technology for a big market but not the trade. And this is generating a lot of frustration among European citizens who expect and deserve better”

In short, the report shows that cross border internet trade is often the only way consumers can buy the products they want at the prices they want. But too often cross border trade is hampered by the patchwork of different laws that exist across the EU and other online trade barriers.

It’s now time for the EU to tackle some of the problems highlighted by Kuneva’s report and encourage both online businesses and consumers to call for fairer online retailing by adopting a set of EU-wide consumer protection rules and taking action against online trade barriers.

This is exactly what we’re calling for, and 750,000 Europeans have already supported our call for free trade on the Internet. If you want a better, fairer deal for consumers, why don’t you sign up to join our Consumer Choice campaign?

The campaign for Consumer Choice in Strasbourg

When we launched the Consumer Choice campaign at the EU Parliament in Strasbourg last month we spent some time talking with a number of people who attended.

This included Alex von Schirmeister, director general of eBay, British MEPs backing the campaign Mary Honeyball and Roger Helmer as well as a range of small business owners from the UK, France and Germany who sell via eBay and have suffered from online restrictions from brand owners.

We’ve collected these interviews into a film that illustrates some of the problems faced by online retailers under the EU’s current legislation and reinforces the importance of our campaign.

As Alex von Schirmeister, director general of eBay, puts it:

“EU policymakers are in the process of reviewing the selective distribution laws which have to be revised by next year. What we’re hoping is to actually influence law making. We think that the current framework needs to be revised, needs to be updated and we’re hoping that policy makers today that hear this message will take this into account when they draft the law”

We hope that this video will further contribute towards increasing awareness of the significance of free Internet trade which we believe benefits not only businesses and consumers but society in general.

You can watch the film over at the Consumer Choice YouTube channel along with our other campaign films. Some of the content is also in French and German, but regardless of the language, the bottom line is always the same: Internet trade should not be restricted because it hurts consumers and small businesses.

Brands and suppliers restricting online retailers

Bully Brands

The Consumer Choice campaign is calling on the European Commission to ensure that when it amends its Vertical Restraints Regulation and Guidelines consumers and small businesses aren’t the victim of unfair trade practices that ignore the power of the internet to increase the level of choice and value available.

We’ve written about some of the ways in which brands are unfairly pressuring online sellers in other EU countries to fix their prices to keep brands’ profits up and consumer savings down. But what about the UK?

The summer edition of eBay’s Online Business Index included the findings of an investigation, How Suppliers Are Blocking Online Trade, which examined the experiences of small businesses that sell online and the barriers they face to trade fairly.

The investigation revealed that half of the online retailers interviewed said they had faced pressure from suppliers to restrict trade.

It also gave a shocking insight into the range of tactics used by suppliers to force online retailers to keep prices high.

These tactics include:

  • Preventing retailers from discounting goods – Nearly half (45%) of sellers interviewed were told what price to charge, limiting their ability to offer discounted goods to consumers.
  • Complicated display criteria – A third (32%) of online retailers reported that suppliers make it hard to sell online by setting complicated conditions on how their goods are displayed. In some cases this even included stipulating how many pixels there must be in each image.
  • Banning sales on the internet – Half of online retailers (49%) reported that suppliers tried to prevent them from selling their goods on the internet or certain websites. For example, some suppliers insert clauses into contracts explicitly banning such sales.
    • We believe that these attempts by brands and suppliers to restrict online retail are short-sighted given the growing power of the internet but it’s undeniable that small businesses are on the receiving end of aggressive and bullying tactics. What’s worse is that many small sellers have no choice but to comply, for fear their supplies will be cut off.

      It’s a worrying situation for online businesses and consumers alike and one our Campaign for Consumer Choice has set out to address.

      You can help end these unfair and uncompetitive practices by signing our petition

      Have you signed up for lower prices online?

      ebay petition poster: United Kingdom

      So far 750,000 people from across the EU have signed our petition saying ‘yes’ to lower prices for goods online, including 251,712 – over a quarter of a million – from the UK alone.

      But we don’t want to stop here. The EU commission is still considering the European Vertical Restraints Regulation and Guidelines and we want as many people as possible to send a clear message to policy-makers that British consumers support fairer trade and increased consumer choice online.

      We need you to help defend your right to buy your favourite authentic goods online and support free trade online. Add your name to our petition by visiting www.ebaycampaigns.com

      As part of this process, eBay is calling for support for cross-border internet sales, increasing consumer choice and treating online and offline channels equally.

      251,712 Brits signed the eBay petition. All of the petitions on Twitition total just 132,255 with the largest having15,455. eBay’s petition addresses a relatively obscure piece of competition law so three quarters of a million signatures shows just how important the issue is for consumers and online sellers.