The Hellenic Competition Commission (HCC) published today, Wednesday 2 November 2022, the Final Report for its sector inquiry into E-commerce, which is available here (in Greek).

This large-scale sector inquiry on the competitive conditions prevailing in the E-commerce sector/markets, carried out in Greece for the first time, was designed and conducted with the aim of attracting the maximum possible participation of all interested parties/stakeholders (consumers, businesses at all levels of the value chain of products, sectoral and other institutional bodies). In this context, the HCC used a variety of methods to collect the necessary data, in particular by organising public consultations/teleconferences, sending a series of questionnaires and conducting a consumer survey.

Although the inquiry mainly focuses on purely competition issues (within the meaning of art. 40 of Law 3959/2011), it also highlights issues that, albeit similar, do not fall stricto sensu within the HCC’s competence, such as issues relating to consumer protection, the use of Big Data, implementation of Regulation (EU) 2019/1150 (P2B Regulation) etc.

More specifically, the scope of the sector inquiry includes, inter alia, a thorough analysis of the following aspects:

• The EU and Greek legal framework governing the digital economy, as well as the relevant case-law and practices of courts, national competition authorities and the European Commission
• The development and prospects of E-commerce in Greece, with emphasis on the importance of cooperation with online platforms-marketplaces and search and price comparison platforms as well as on the pros/cons of online purchases
• Consumer trends and competitive conditions prevailing in the E-commerce sector in Greece, the intensity of competition between the online and physical sales channels and the penetration of foreign retailers and online platforms into the domestic Ε-markets
• Issues related to online payments, shipping costs and delivery of products as well as data collection and management
• Possible distortions stemming from the cooperation between retailers and their suppliers, such as restrictions on pricing policy, use of the Internet and cross-border sales
• Possible distortions stemming from the cooperation between retailers and online platforms, such as issues relating to charging models, verification of ratings and determination of initial/predetermined rating of products and online stores.
• Issues relating to the application of national and EU rules on the online sales channel, factual and legal barriers to business activity, difficulties in cross-border business activity and issues relating to dealing with virtual stores and counterfeit goods.

In particular, the Final Report comes to the following conclusions/proposals:

Consumer Behavior

• Main deterrents for e-purchasing include, inter alia, transport costs, time for delivery of goods, concern about possible cases of fraud and absence of the payment-on-delivery option.
• Consumers are more demanding with respect to the features that Greek online stores are expected to meet in relation to those registered abroad, however they tend to prefer the former with a view to supporting Greek stores vis-à-vis foreign retail stores.

In terms of satisfaction with online purchases, an extremely high percentage (95%) of consumers surveyed are satisfied with their overall experience as e-consumers, as cases of fraud have in practice very low rates of frequent occurrence.

Platform to Business Regulation (EU 2019/1150 P2B Regulation)

• The implementation of the P2B Regulation is estimated to have a positive effect on the activity of companies in e-commerce, however, in practice there have generally been no changes in business relationships with online service providers.

It is advisable to adopt mechanisms to monitor the implementation of the Regulation and therefore the role of the competent supervisory authority (DI.MEA) is considered particularly important. In this regard, it is important to develop channels for the submission of anonymous complaints, adopt fast-track dispute resolution mechanisms and introduce an appeal procedure against the decisions of DI.M.E.A.

• The need for further clarification of issues related to its individual provisions is noted, in particular the issue of an undertaking's dual status as an online platform and a business user at the same time.

Act for Digital Markets (DMA) and Act for Digital Services (DSA) 

• Need for their alignment with national law and avoid a creation of additional formalities
• Allocation of adequate resources to provide technical expertise as well as the establishment of a complaint mechanism to ensure the monitoring and control of compliance.
• It is also proposed to formally seek, through mandatory market surveys, the opinion of competitors and consumers regarding the compliance measures taken.

Factual entry barriers in the markets concerned

• High costs relating to the setting up, operation and promotion of an online store, mostly affecting small-sized enterprises.
• Difficulty for businesses to access funding for their e-commerce activities. Proposed solution: simplification of the relevant procedures for participation in co-funded programs, business training on the use their fundings, program redesigning with the aim of their adequate targeting and an improved resource efficiency.
• Lack of the necessary knowledge to organise and plan omnichannel strategies and the regulatory framework as well as difficulty in finding specialised staff. Proposed solution: Issuance of guidelines and training programs.
• A series of obligations and bureaucratic procedures faced by the companies concerned. Proposed solution: Streamlining of procedures and modernisation of the legislative framework.
• Difficulty or even complete inability of companies to access data, makes it difficult for them to further develop in e-commerce as they cannot easily adapt to the needs of consumers, their transaction habits and preferences.Proposed solution: use of the right to data portability, through the adoption by companies of interoperable formats, together with the adoption of guidelines on the General Data Protection Regulation (GDPR).
• Cost of using payment services and, in particular, the cost of supplying technical equipment (POS) and the high charges of banks for electronic transactions, especially for smaller enterprises.

Barriers to cross-border business activity

• Already identified issues: language issues, regulatory differences and high shipping costs.
• Limited liability of transport companies in the event of damage.
• Additional costs borne by companies in the event of insurance of the traded products. 
• Additional formalities or obligations undertaken under the current regulatory framework by domestic business users of domestic online platforms that not necessarily undertaken by those working with foreign online platforms.
• Special care must be taken in transposing EU Directives so that they do not introduce additional formalities for domestic companies.
• Heterogeneity of tax rates, as due to the high (direct and indirect) taxation in Greece.
• Absence of sufficient customs controls.

Distortions in the level of retailers’ operation

• Parallel imports of products from non-EU countries, which are not intended for sale within EU.
• Operation of virtual stores, cases of tax evasion and consumer fraud.
• Retailers’ activity on social media, which, due to the lack of relevant institutional framework and control, facilitates the emergence of consumer misleading or fraud as well as non-compliance with tax provisions by companies.
• Proposedsolution: Certificationof companies operating in E-commerce. Opinions differ as to the mandatory or non-mandatory nature of such a certification; however, the procedure should not entail any administrative and financial burden to businesses. Accordingly, the development of a regulatory framework that would govern the participation of business users in social media operating as marketplaces is also proposed.

Distortions in specific product industries 

• Food supplements: implementation of MD C5a/53625/2017 which impedes the realisation of online sales due to the restrictions it entails.
• Books: arrangements for imposing a ceiling on discounts for new editions for a period of 18 months from their publication.

Distortions stemming from a poor operation of the competent control mechanisms, due to, inter alia, their under-staffing.

Proposed solution: Strengthening and intensification of the control mechanisms’ operation, interconnection of the competent authorities and bodies.

The publication of the Final Report marks the completion of the HCC’s sector inquiry into E-commerce. The expertise gained thereby enables the HCC to intervene either repressively or by taking initiatives to promote specific competition policies or regulations in the relevant sectors, with a view to enhancing consumer welfare, favoring entrepreneurship and promoting innovation and the digital transformation of the country.