Encouraging news for cross-border internet retailers (and shoppers) in the EU

by Bryan Cave
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The European Commission (the "Commission") has been investigating the European-wide parcel delivery industry for some time. With online retail becoming an increasingly important avenue for both consumers and retailers, the focus is clearly on removing perceived barriers to cross-border internet sales.  The Commission recently announced that it will increase its regulatory oversight of the European-wide parcel delivery industry to facilitate e-commerce and the EU Digital Single Market strategy. The EU digital Single Market strategy was adopted on 6 May 2015 and aims to create a marketplace where "the free movement of persons, services and capital is ensured and where the individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence" (ec.europa.eu).

In general, EU consumers predominantly buy online from domestic retailers rather than retailers in other EU member states.  The Commission reported in 2012 that only 9% of EU consumers were purchasing goods online from other European countries.  More recently, that number has increased to 15%, but this percentage is still very low when compared with the 44% of consumers making online purchases from e-retailers within their home countries. With the potential for EU shoppers to save over €11 billion by shopping cross-border, there is strong incentive to reduce obstacles to an EU-wide marketplace.  

Parcel delivery may be partly to blame. The feedback from a public consultation published on 6 May 2015 highlights concerns that cross-border parcel delivery lacks affordability, accessibility, quality, and convenience.  In relation to the reported high costs of cross-border delivery in the EU, a study conducted by Saint-Louis University revealed that cross-border parcel prices are almost five times higher than domestic delivery costs and, further, that cross-border delivery costs do not accurately reflect the actual costs of delivery.  In addition to deterring shoppers and e-retailers from buying and selling cross-border, these issues also adversely affect the conservation of a competitive e-commerce market and the development of the EU Digital Single Market. 

Welcome news for EU consumers and e-retailers is that the Commission is committed to improving cross-border delivery services across the EU in the first half of 2016.  Specifically, this will involve the implementation of measures to improve competition, price transparency and regulatory oversight (although the Commission does not plan to impose price regulations or caps on delivery services).  It therefore remains to be seen whether the stated goals can be achieved though self-regulation or other methods to create a sustainable and seamless cross-border parcel delivery process, develop a single market for parcel delivery, and more generally support the growth of a competitive and truly cross-border e-commerce market in the EU.

In furtherance of the EU Digital Single Market strategy, the Commission is focusing its attention on a number of areas with the aim of increasing consumer confidence when crossing virtual borders in their online shopping,  and addressing cross-border delivery services will be a key step. We will be watching these developments closely.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bryan Cave | Attorney Advertising

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