PRESSE RELEASE

Paris, April 12 2010

On-line retail associations express their concerns about the potential

impact of EU draft guidelines on vertical restraints

BeCommerce, the Belgian e-commerce and distance selling association, EMOTA the European E-commerce and Mail Order Trade Assocaition, FEVAD, the French E-commerce and Home Shopping Federation, IMRG the UK leading industry body for global e-retailing (IMRG), Thuiswinkel.org the Dutch Home Shopping Association, are concerned about the effects of an over-strict interpretation of European Commission draft guidelines on vertical restraints (Redrafting of Regulation (EC) N^o 2790/1999), and particularly about the impact of the draft guidelines on the development of e-commerce.

We therefore thought it important to confirm of the potential risks of an extensive interpretation of Point 54 of those guidelines, which acknowledges that a selective distribution channel may require retailers to have bricks-and-mortar outlets, irrespective of whether the nature of the actual products justifies this.

Even though the guidelines have not yet been adopted, a number of online mass retailers are reporting a proliferation of distribution contracts in which manufacturers are requiring retailers to have bricks-and-mortar outlets, irrespective of whether the nature of the actual products justifies this.

We do not wish to question the actual principle of the vertical restraints authorised by the regulation, which allows the exemption of certain categories, where those restraints are genuinely objective, proportionate, and justified by an exclusive, selective, or franchise distribution network. Indeed, French legislation already takes into account the fact that suppliers may refuse to include retailers who have no bricks-and-mortar outlets in their networks, where the need for such outlets is justified, as may be the case in the case of luxury or hi-tech goods, for example.

We are nonetheless concerned that certain suppliers may henceforth use the draft guidelines as a pretext to exclude online or catalogue-only retailers from the market in which they operate. Our European organisation, EMOTA, shares this concern, particularly given the recent proliferation of contracts requiring a bricks-and-mortar retail outlet, without providing any justification for such a requirement. The FEVAD has also noted an exponential increase in quantitative criteria where existing distribution contracts are renewed, the aim of which is to include distribution networks.

The de facto exclusion of an online-only retailer should not be a basic premise. On the contrary, the supplier must be required to provide an objective justification for excluding a retailer, depending on the products and the online retailers involved, particularly as certain online retailers have developed technologies enabling them to provide levels of customer advice and service similar to or better than those available in an actual store.

We believe that such vertical restraints should not be systematically legitimised, as an extensive interpretation of the guidelines might suggest, unless the aim is indeed to exclude certain online retailers.

Europe’s desire to include electronic commerce in its guidelines should not in fact achieve the opposite effect from that intended, by de facto excluding “Pure-Players”. This would inevitably result in a significant restriction in competition, to the detriment of consumers’ best interests and of the development of online retailing.

BeCommerce, FEVAD and IMRG believe that Point 54 of the guidelines should be clarified, in order to provide clearer specifications for the conditions under which manufacturers may require that retailers have bricks-and-mortar outlets. It should also be made clear that, in any event, such measures are only acceptable where there is an objective justification that is applied consistently.

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About BeCommerce

BeCommerce is the Belgian eCommerce and distance selling association, and has the mission to increase consumer confidence in buying online and at distance in Belgium. Founded only 3 years ago, BeCommerce counts over 150 members and continues to grow in an ever-changing market

About FEVAD

The French e-commerce and distance selling federation (Fevad) was founded in 1957 and now includes nearly 450 companies and more than 700 websites. It is the representative organization of the e-commerce and distance selling sector. Fevad’s principal mission is to promote the sustainable and ethical development of distance selling sales and e-commerce in France.

About IMRG

IMRG is the UK industry association for e-retailing.IMRG is a membership community for the e-retail industry. IMRG membership comprises hundreds of retail organisations, and enterprises that supply technology and services to facilitate e-retail solutions. Its activities span the e-retail spectrum – from online, telephone and mobile commerce, to digital TV.

About Thuiswinkel.org

Dutch Home Shopping Association known as Thuiswinkel.org, the principal organization promoting the interests of over 1.000 companies selling products and/or services to consumers via internet, catalogues, post, etc. representing the distance selling market of 6,4 billion euro's in the Netherlands.

Press Contact : Nathalie Laîné
01 42 56 38 86 - nlaine@fevad.com