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Archive for the 'Online Business Index' Category

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