What are ‘platform bans’ and how could they affect online shopping?

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Platform bans are mechanisms imposed by producers of goods on their resellers to prohibit them from using well-known online platforms to sell their products. In practice, retailers are allowed to sell these products only through their own online shop. Distinct views have been developed on these bans depending if they are seen as anti-competitive practices or as a way of selecting distribution channels.

Platform bans as an anti-competitive mechanism

On one hand, some associations and coalitions have started to advocate with European legislators for putting an end to platform bans as they consider it as a barrier to the development of e-commerce in Europe. According to Choice in eCommerce (an e-commerce sellers’ initiative), online merchants feel threatened by such online sales restrictions and many have been negatively affected by platform bans, with some sellers fearing insolvency as a consequence. According to Choice in eCommerce, platform bans hurt especially small online companies and consumers, as shops lose the freedom to use efficient, profitable and well-known online distribution channels and consumers lose choice and competitive prices.

Platform bans as a way for selective distributions

On the other hand, representatives from the industry and manufacturers use platform bans to execute selective distribution of their products. For example, suppliers of luxury goods may require a certain level of quality or conditions for the online shops that will resell their products to consumers. In this case, platform bans are justified by part of the industry in order to keep high-level standards.

Next steps of the European legislator

The European Commission is likely to bring forward initiatives to end platform bans as part of the Digital Single Market strategy that will be presented in May. The European Parliament seems also to give importance to the issue, as one of its Members, MEP Ramon Tremosa i Balcells (ALDE, SP), asked the Commission a parliamentary question regarding platform bans and how the Commission “intends to tackle anti-competitive and discriminatory practicestargeting online platforms”. An official answer has not come yet, but Ecommerce Europe is following the discussions on platform bans with attention, as it involves online shops directly.

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