A growing number of consumer goods suppliers prevent their authorized distributors from offering their goods for sale on open online marketplaces such as eBay. Platform bans allow brands to keep prices artificially high, restrict consumer choice and may breach EU competition rules.
The use of marketplace bans is a widespread anti-competitive practice in many consumer product markets, with over half of European sellers now affected by platform bans. In some industries, nearly all leading brand manufacturers have imposed a marketplace ban on their retailer.
Recent research shows that 88% of shoppers expect their favourite brands to be available through online marketplaces such as eBay, and 61% of shoppers expect to find the best prices through these sites. However, as a consequence of marketplace bans, consumers are restricted from buying their favourite products at competitive prices via their preferred and trusted online and mobile commerce channels, and may pay higher prices because they cannot use marketplaces to efficiently compare prices.
eBay believe e-commerce should be open for all and call on the EU Commission to step up its enforcement actions against these anti-competitive practices. Earlier this year eBay highlighted a number of brands which give resellers the freedom to sell their products online without imposing sales restrictions (at least one of which in the past imposed restrictions but is now reformed).
Now eBay have have spoken to retailers and the video below highlights a British, German and Italian seller all of whom have had their businesses damaged by protectionist brands.
In its preliminary report on the e-Commerce Sector Inquiry, the European Commission recognises the importance of online marketplaces for small businesses and cross-border trade. The report also rightly shows that marketplace bans prevent a significant number of small business entrepreneurs from selling products on online marketplaces and that these bans harm consumers by limiting choice, increasing prices and hindering cross-border trade.
The EU are inviting all stakeholders (and that includes you if marketplace brand restrictions have impacted you) to submit your views for consideration. The deadline to make your comments is the 18th of November 2016.
10 Responses
One of my suppliers has changed its log-on details and now wants proof of your own website. It specifically states that they will not supply to retailers selling on Ebay, Amazon, etc.
I have done many £1000’s worth of business with them over the years and this will now stop.
It was actually a good thing, as I got the wake up call to look for alternative suppliers. I now pay these alternative suppliers instead of my original one and have got a better deal on similar product ranges. Who’s the loser here?
We have a brand that restricts selling on marketplaces and it thrives on our website as buyers have to look for it.
We can also offer it at a lower price as our costs are less, making both us and the buyer better off.
There is an easy way around this for brands – just go direct with Amazon. Quite a few of our suppliers have done this. The results are the same as once Amazon has stock no-one else sells any on that marketplace.
This is a good thing. It will force people away from the race to the bottom ideology that ebay and amazon expect. Retailers are now expected to sell things at near zero profit – you dont see ebay reducing their fees so the customer can get even cheaper deals do you!
Oh dear is the shoe on the other foot now – reap and sow springs to mind.
One of the products I sell, we have been banned from selling them on marketplaces, however the manufacturer is selling them on the market places. Now they don’t want any price drops on their products.
Would this be deemed legal or illegal?
Bob
eBay is running its own restrictive policy by requiring sellers to accept payment via PayPal, thus adding a further 3-4% onto the eBay seller fees. Users cannot charge more to cover this cost and are therefore paying twice for the privilege of selling through eBay.