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Vertical Restraints in the Internet Economy
Meeting of the Working Group on Competition Law in Bonn

Date of issue: 14.10.2013

On 10 October 2013 the Working Group on Competition Law met in Bonn at the invitation of the Bundeskartellamt. At this year's meeting more than 100 competition law experts from the judiciary, ministries, universities and competition authorities discussed the topic "Vertical Restraints in the Internet Economy".

Andreas Mundt, President of the Bundeskartellamt: "The constantly growing significance of the internet for an increasing number of economic sectors also raises a number of difficult competition law issues. Often these are well-known themes such as resale price maintenance imposed by the manufacturer or restrictions in selective distribution systems which re-appear in a new guise. Examples in this respect are the Bundeskartellamt's current proceedings against manufacturers of brand products like Asics and Adidas to examine whether the restriction of internet distribution via third party platforms like Amazon or ebay is legitimate. In other proceedings we are examining restrictions of competition by the platforms themselves. So-called most favoured customer clauses such as agreed e.g. by the hotel reservation portal HRS with hotels or by Amazon with sellers on the Amazon Marketplace can significantly hinder competition."

The Working Group on Competition Law meets once a year to discuss fundamental issues of competition policy. This year's meeting was again attended by many university professors from law and economics faculties, high-ranking representatives of national and international competition authorities and ministries, as well as judges from the cartel divisions of the Düsseldorf Higher Regional Court and the Federal Court of Justice.

The conference was chaired by Dr Klocker, Vice President of the Bundeskartellamt. It opened with introductory statements by the conference panelists: Dr Konrad Ost, Head of the General Policy Division at the Bundeskartellamt, Prof Dr Kai-Uwe Kühn, Michigan University (USA), Prof Dr Andrea Lohse, Bochum University, Prof Dr Christian Wey, Düsseldorf University and Prof Dr Daniel Zimmer, Bonn University and Chairman of the Monopolies Commission.

The academic analysis of vertical restraints in online markets is still in its initial stages. However, the fast growth in e-commerce raises a number of practical issues regarding the application and interpretation of competition law which were addressed in the discussion.

The debate revolved around two specific problem areas. The first was the competitive assessment of certain restrictions to online distribution by manufacturers, in particular the prohibition of dealers from using independent marketplace platforms such as Amazon or eBay as well as their own internet shops to sell their goods.

The second theme was dedicated to the effects of so-called most favoured customer clauses used on internet portals. For instance, hotel reservation platforms such as HRS or oblige hotels to always offer rooms on these platforms at their most favourable prices.

The conference participants discussed the potential efficiency increasing effects of such measures as well as their anticompetitive effects and how they should be assessed under existing law.

The working paper which formed the basis for discussion and the individual statements of the conference participants are available on the Bundeskartellamt's website.

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