Amazon’s European Handcuffs

Amazon.co.uk recently ceased shipping electronic goods to Ireland. There is a discussion of this in the comments of Michele Neylon’s post Amazon UK Shift the Goalposts.

From my comments there.

I ran into this problem a good few years back. The price of camcorders is significantly lower in Germany. I attempted to order one from Amazon.de to be told that it was one of a category of goods that they wouldn’t ship outside the jurisdiction.

I complained to the European Commission Competition Directorate-it was a slow day- on the basis that I believed that this limitation on inter community trade had been forced on the company by the suppliers to protect their higher margins in other countries, an anti-competitive measure.

Some 8 months later I received a response, where the Directorate asked me to show me the exact page I had a problem with. As that camcorder was gone, I couldn’t do that so my complaint died.

It would still be uncompetitive, and seriously illegal under European law, if any such demand had been enforced.

…

The question would be the same as if I rang up a corner shop in Germany and asked them to supply a loaf of bread. They could decide not to ship it for their own reasons- that would be fine.
But if they were constrained from providing a cross-border sales service by a distribution deal with their suppliers then that would be an illegal restraint of trade under EU law. And therefore under Irish law as well, of course.

Michele asks about distribution agreements, which often purport to restrict sales to a certain geographical area.
I say:

You can be restricted from active reselling outside your geographical area- you can’t chase sales with ads or traveling reps or the like. But you cannot be restricted from engaging in passive sales- if I approach you unprovoked.

A website, other than when people came in through click-throughs potentially, is all passive sales, it could be argued.

As can be seen from the comments, Amazon.co.uk are reluctant to reveal what the cause of their change of policy was.

Without knowing more about the detail of their particular decisions, we can’t really say any more than that. But we can say that in general, a supplier who restricted a retailer from shipping to another part of the EU market for goods, in order to engage in price setting, would find themselves in very hot water. And any retailer who went along with these restrictions would need to be able to answer questions with very good answers to avoid punishment.

If you go to Amazon.de’s website today and try to buy some of their low priced digital goodies you will still be told:

Dieser Artikel kann leider nicht an den von Ihnen gewünschten Ort versandt werden.

Or: Bum off, stinky Irisher bargain hunter.

Who benefits from this? Hardly Amazon- a sale is a sale, after all. But the suppliers of digital goodies certainly do- it allows them to continue to offer German consumers cheaper goods without risking the higher priced sales they can make elsewhere.