E-commerce of Goods: Testing the European Single Market

E-commerce of Goods: Testing the European Single Market Paula Gori and Virginia Silvestri 1 Introduction E-commerce has become a major marketplace that provides businesses and consumers new trade opportunities beyond their traditional geographic markets. In light of the European Digital Single Market (DSM), a relevant concern is the existence of several forms of geographic discrimination. Consumers as well as businesses are often faced with undue impediments to free and efficient crossborder transactions within the European Union (EU). The paper is organized as follows: Sect. 2, proposes an operational definition of e-commerce, and provides metrics both on the size of e-commerce and the difficulty of making cross-border economic trades. Section 3 examines the inherently competitive structure of e-commerce of goods in the EU, with a focus on the recent sector inquiry of the Directorate General for Competition (DG Comp). Section 4 identifies the most relevant obstacles to the spread of e-commerce, and Sect. 5 focuses on the current regulatory answers aiming at tackling these impediments. 2 Economic Dimensions of E-commerce: The Current Situation and its Potential Impact on GDP E-commerce: an overview E-commerce can be defined as a technology that exploits the ability to digitize characteristics of a product or service being sold and characteristics of the buyer (Cardona et al. 2015). Seen this way, e-commerce is the process P. Gori (*) • V. Silvestri European University Institute, Fiesole, Italy e-mail: [email protected] © Springer International Publishing AG 2018 P.L. Parcu et al. (eds.), The Contribution of the Postal and Delivery Sector, Topics in Regulatory Economics and Policy, https://doi.org/10.1007/978-3-319-70672-6_10 129 130 P. Gori and V. Silvestri by which buyer-seller information is digitized and transferred online, thereby reducing transaction costs. Buyers can save on the costs of acquiring information regarding products and services and no longer need to know the location of items prior to sale. Sellers no longer need to maintain inventories close to customer locations.1 E-commerce also reduces menu costs, facilitating pricing experiments. A major conclusions of a European Commission (EC)’s sector inquiry is that e-commerce leads to a high degree of price transparency that causes an increase in price competition.2 Moreover, availability of information on consumers’ behavior enables more effective price discrimination and marketing techniques. European policymakers have recently promoted the DSM as one of a top priority. However, it is difficult to find official comprehensive data regarding e-commerce transactions in the DSM. Part of the reason can be attributed to the difficulty of framing such a fast developing and multifaceted phenomenon in a definition that suits accounting criteria. Measuring the degree to which e-commerce attains the above-mentioned market improvements is key for its success. Such measures depend the type of good or service and other characteristics of how the e-transaction is designed, which vary across different industries. E-commerce is also non-uniformly distributed in the economy and among different countries, depending on their typical industrial specializations, as well as on other factors, including Internet penetration. This is illustrated by the wide variation in the share of enterprises making electronic sales in Europe, ranging from 7% in Romania to 30% in Ireland (Eurostat 2016). While acknowledging that moving many aspects of the buyer-seller relationship online all are part of e-commerce, measurement is difficult in practice. For example, it is not obvious how one would measure how a buyers’ ability to find online product information affects purchases that happen offline. The ability to pay online has reduced use of letters for billing and payment. However, it can be used both in offline purchases and online purchases, so it should not be identified as the main distinctive feature of e-commerce. Online delivery, in turn, applies only to services and products that are digital in nature, therefore is even less a characteristic feature for measuring e-commerce. Accordingly, the order phase of the buyer-seller transaction seems the most suitable to identify the divide between an e-commerce transaction and a traditional offline one. In most empirical studies, e-commerce transactions are indeed counted as the number of orders made online, regardless of whether search, delivery or payment are also taking place online (E-commerce Foundation 2016; Eurostat 2016). On the other hand, e-commerce also creates new types of trade costs, due to the lack of trust towards remote suppliers, delivery services and payment 1 One can also identify e-commerce in a broader sense to include transactional activities, such as order, payment and delivery (Nikali et al. 2017). Increasingly, other transactional features are becoming indispensable to satisfy customer needs. 2 Report from the Commission to the Council and the European Parliament, Final report on the E-commerce Sector Inquiry, Brussels, 10.5.2017 COM (2017) 229 final. E-commerce of Goods: Testing the European Single Market 131 systems. Therefore, there is also, marginally, a negative trade effect that can nonetheless be softened using appropriate policies, adopted by private operators as well as by policymakers, as will be discussed below. 2.1 Economic Dimension of E-commerce and Its Impact on the EU-28 GDP Most publicly available statistics (E-commerce Foundation 2016; Eurostat 2016) focus exclusively on B2C trade, which is the biggest portion of e-commerce transactions.3 Such aggregate statistics show that e-commerce plays an increasingly relevant role in the European markets, in line with the worldwide trend. Its contribution to the EU28 GDP was 2.8% in 2015, rising from 2.45% in 2014. This places the contribution to GDP of the European B2C e-commerce sector in the fourth place in the world, below that of China (7.05% of GDP), South Korea (4.70% of GDP) and the USA (3.32% of GDP) (E-commerce Foundation 2016). Of all people with an Internet connection in Europe in 2015, about half were online shoppers and 15% bought goods or services online across national borders (Eurostat 2016). These data can be compared against the US figure, where out of all the population of Internet users (88% in 2015) 76% were online shoppers. The proportion of online shoppers is still limited in Europe. In recent years, the annual growth of e-commerce B2C sales in Europe has decreased from an all-time high of 22% in 2013 to a level of 13.3% in 2015. This decrease in the growth rate can attributed to a more mature phase of market development. Another possibility is that increased incomes following the recovery of the European economy led consumers to expend less effort to buy cheaper products online.4 Indeed, the same slow-down in the growth of B2C e-commerce sales has been observed globally since 2013 (E-commerce Foundation 2016). E-commerce purchases may be digital or physical goods and services. In Europe, 52% of B2C e-commerce transactions in 2015 involved goods (digital and physical) (E-commerce Foundation 2016). For physical goods, delivery is central to consumers’ choices about whether to place an order online and to sellers’ decisions about whether to exploit the e-commerce channel. In terms of volumes, the share of online sales in goods tends to be limited. B2C e-commerce sales amounted to 8% of the total of retail sales in Europe in 2015 (E-commerce Foundation 2016). The share of online sales can reach much higher levels in services. The sector most affected by far has been the travel and tourism, where the share of online sales is about 40% 3 Although the area that most naturally accrues to e-commerce is that of Business-to-Consumer transactions (B2C), there are other types of trade that are generated through it: Business-toBusiness (B2B), Customer-to-Customer (C2C), Customer-to-Business (C2B) and Business-toGovernment (B2G). 4 Nikali et al. (2017) found evidence for this in Finland. 132 P. Gori and V. Silvestri (Duch-Brown and Martens 2015). In part, this is also related to the amount of substitution that happens between online and offline sales. The advent of e-commerce has the power of expanding markets, but it may also just be a new distribution channel that moves otherwise offline sales online. It seems that in sectors where the substitution effect is more relevant, like the tourism sector, the share of online sales on total sales is higher, having eroded more rapidly the offline channel role (Duch-Brown and Martens 2015). Dependence upon a cheap, trustworthy and interactive delivery service becomes more evident in case of cross-border sales and delivery. Just about one third of European online shoppers bought products that involve cross-border delivery, and only 42% of all enterprises making online sales sell cross-border (Eurostat 2016). In the Flash Eurobarometer survey (2015), both sellers and consumers claim that the delivery and return aspect—price, trustworthiness, speed—is among the main reasons to avoid cross-border operations in the sale of goods. Retailers claim that high delivery and return costs make them unable to compete, along with difficulties in complying with different regulations and the connected risks. The data made available by Eurostat show that 20% of enterprises made electronic sales and the turnover generated by the e-channel was 16% of their total turnover in 2015. In the period 2008–2015, the number of enterprises making e-sales increased by 7%, while the e-turnover increased by 4%. Interestingly it is possible to disentangle the value of e-sales based on the size of the enterprise. There seems to be a positive relationship between the size of the enterprise, the presence of electronic sales and the portion of turnover generated by electronic sales: in 2015, 42% of larger enterprises engaged in e-sales activities, earning 23% of their turnover from it, while the percentages are respectively 28% and 12% for medium size enterprises and 18% and 6% for small size enterprises. The available European data do not clearly show the difference between volume and value of B2C e-commerce sales in goods. Such information would be interesting to understand the average value of goods purchased online. Although European cross-border B2C online sales have risen by 25% since 2013, that level that is still considered unsatisfactory by the European Commission.5 They have recently published several ad-hoc studies and are in the process of adopting measures to remove obstacles to cross-border e-commerce in Europe, as will be discussed below. 5 This dissatisfaction is the main engine behind the European Commission Communication “A comprehensive approach to stimulating cross-border e-Commerce for Europe’s citizens and businesses”, COM (2016) 320 final. E-commerce of Goods: Testing the European Single Market 133 3 Competitive Bottlenecks for a Pan-European E-commerce Market 3.1 On the E-commerce Side In May 2015, the EC launched an e-commerce inquiry as part of its DSM Strategy, which is one of its three pillars of ensuring consumer access to goods and services via e-commerce in the EU. This inquiry ended in May 2017 and its content is summarized in a document by the Commission (the Report).6 According to the inquiry, with regard to the B2C trade of goods, there is a high degree of price transparency (thus price competition) and direct retail activities by manufacturers have increased. In addition, selective distribution systems strategies have expanded and there are more contractual sales restrictions (on pricing, marketplace, crossborder sales. The use of price comparison tools); free-riding by consumers that use presale services of brick and mortar shops and then shop online, or vice versa, is a frequent practice. The relationship between manufacturers and retailers (B2B) is a key part of the debate on competition issues relating to e-commerce. E-commerce is also a way for manufacturers to sell directly and thus compete with retail distributors. The high degree of price transparency gives consumers, retailers and manufacturers the ability to compare and monitor online prices of competitors. The inquiry finds that 53% of the respondent retailers track online prices and seven out of ten use automatic software programs to do so. The availability of real-time pricing information could lead to automatized price coordination and the wide-scale use of such software may in some cases raise competition issues. The sector inquiry identified several potential threats to EU competition law. It found an increase in the use of selective distribution systems (that are not covered by the Vertical Block Exemption Regulation (VBER). According to the Report, these could in some cases be anti-competitive vertical restraints. According to the feedback received by the respondents, price restrictions/recommendations are the most widespread restriction. Online price transparency (and the concurrent use of price comparison software) might be exploited to detect whether retailers deviate from the recommended price. Moreover, the possibility of direct and instant price monitoring could facilitate collusion between retailers. Selling restrictions in online marketplaces (e.g. Ebay, Amazon and Zalando) is another common feature of the distribution contracts. For example, a company selling luxury clothing may restrict the online sales only to marketplaces selling luxury goods, to avoid being mixed with cheap clothing).7 The choice of a given marketplace as a sale channel depends on factors such as the type of product, 6 Report from the Commission to the Council and the European Parliament, Final report on the E-commerce Sector Inquiry, Brussels, 10.5.2017 COM (2017) 229 final. 7 According to the Final Report on the E-commerce Sector Inquiry, 18% of retailers have reported that agreements with suppliers contain marketplace restrictions. 134 P. Gori and V. Silvestri quality and brand, the size of the retailer and of the manufacturer. The inquiry finds that a seller’s absolute refusal to permit online marketplace sales does not constitute a “hardcore restriction” of competition, as defined in Article 4(b) and 4(c) of the VBER, and as such they are not automatic violations of EU competition law. Nevertheless, vigilance is required as there might be specific settings in which these bans do violate EU competition law. Another factor impeding the development of European e-commerce market is the presence of geo-blocking activities enacted by sellers. A business may use technological tools to identify the location of the consumer and block purchases if not in that business’s territory (by, for example, refusing payment with credit/debit cards of other countries). The EC’s inquiry found that more than one third of e-retailers surveyed use geo-blocking techniques as part of their commercial strategies. In most cases, the choice to geo-block is not due to additional costs (e.g. translating the website; arranging for additional marketing efforts; delivery and other services), but to keep their geographical markets separated. Some territorial restrictions may also raise concerns when they are imposed on the retailer, and could be violating the VBER. The EC will continue to monitor the market and will intervene if individual cases require further scrutiny. In this regard, in February 2017 the EC opened three investigations on suspected anticompetitive practices in e-commerce.8 3.2 On the Delivery Side E-commerce is a marketplace phenomenon that has produced creative disruption, as coined by Schumpeter (1942). Many commercial activities were heavily impacted on by e-commerce. Some businesses were nearly or completely forced out of the market (e.g. Blockbusters vs. Netflix). Others gained momentum from the wave of innovation; entire new markets were created (e.g. the sharing economy). The postal and delivery sector benefitted substantially, thanks to parcel delivery. The impact on the postal and delivery sector is particularly relevant because of the expansion of the B2C (and the related C2B, mainly returns) segments, which by their nature are mostly concerned with the shipping of packets (up to 2 kg), parcels (up to 20 kg), and express packages. Packets are considered for regulatory purposes as bulk mail and are usually carried by national postal operators (POs). In the parcel and express sectors, there is robust competition from private delivery operators, which may have pan-European end-to-end networks (e.g. DHL, TNT, FedEx, UPS) or may operate within national borders.9 Various statistics show that national POs 8 Respectively in the markets of consumer electronics, video games and hotel accommodation, http://europa.eu/rapid/press-release_IP-17-201_en.htm. 9 The competitive scenario is much more complex, with a host of different players: express operators, consolidators, brokers, and other minor players. E-commerce of Goods: Testing the European Single Market 135 tend to have a higher market share in the B2C segment than in the B2B segment, where private delivery companies are very competitive and POs only play a minor role. Due to their ubiquitous networks and the tendency of private customers and small enterprises to stick to the national POs’ service to send their packages, national POs have a opportunity to benefit from the growth of e-commerce especially in the B2C segment, to (at least partially) compensate the loss of revenues due to e-substitution in the mail segment. The portion of parcels that is currently delivered by national POs varies greatly between Member States (MSs), from less than 10% to above 25%, (ITA/WIK 2009). This difference may be explained by the reactions of national POs to market liberalization, a process which is still on-going, and the concurrent challenge posed by the drop in mail volumes, which has pushed some POs to diversify their core businesses. Some national POs decided to remain focused on traditional core services. To accommodate rising parcel demand, they are taking advantage of their widespread delivery networks. They are also speeding up delivery activities, particularly cross-border, and offering value-added features, such as track-andtrace options or choice of flexible pick-up locations.10 Other POs focused more on new activities, such as financial services, sometimes partially leaving the growth of B2C delivery demand aside (Parcu and Silvestri 2017). Both e-retailers and consumers claim quality and availability of affordable delivery are crucial to deciding whether to use online sales channels (Flash Eurobarometer 397 2015). For small companies in particular, the delivery price can constitute a major barrier or a decisive facilitator to e-commerce because they are unable to obtain volume discounts from postal companies that are available to larger competitors. This disadvantage is more pronounced in cross-border operations where delivery prices are generally substantially higher, which include termination fees from the interconnection point to handle parcels to the delivery address. Small companies and consumers tend to rely on national POs to send parcels and packages. As a matter of proportions, Eurostat 2015 estimates an approximate percentage of small, medium and large retailers in the European e-commerce market on the order respectively of 18%, 28% and 42%. This might be the result of ignorance about the existence of potentially cheaper offers from private delivery companies or lack of trust toward them. Medium and large e-retailers manage to strike better deals with delivery companies, exploiting the large volume of items shipped. Large e-retailers sometimes resort to their own logistic system for certain parts of the service, organizing transportation of items across national borders and then using local delivery operators (e.g. Amazon). This tiered structure marks an important characteristic of market competition between e-retailers, which face different costs regarding the delivery of items, 10 See for example the European Parcel Group initiative, composed of different national postal operators, which strives to create an integrated service and offers integrated track-and-trace systems. 136 P. Gori and V. Silvestri depending on volume and frequency of parcels shipping. Entry by small operators for this reason is more viable in more densely populated areas, so they can achieve scale economies. For the sake of the development of a truly pan-European e-commerce market, the level of delivery prices is therefore highly relevant, as it may determine the persistence of separated national e-commerce markets if small companies cannot afford paying the high cross-border delivery prices. All in all, high cross-border delivery prices appear to constitute a competitive bottleneck for the development of a truly pan-European e-commerce market. 4 Main Obstacles to E-commerce in the EU While the potential impact on the economy of e-commerce appears to be of first order relevance, it still faces serious obstacles to becoming more widespread in Europe. Some of these are socio-educational (e.g. lack of digital literacy and skills); some psychological (e.g. different emotions when buying online and insufficient trust in the online sellers or the online system in general); some practical (e.g. customers living close to shopping centers); some related to prices (be it of the product and/or of the delivery); and, finally, some related to essential features of the offer (e.g. not having the possibility of choosing the specific characteristic of a given item or being denied to buy from sellers of other EU MSs). 4.1 On the E-commerce Side Insufficient Trust—When it comes to the online world, trust appears to be crucial in transactions. In case of e-commerce, consumers are willing to buy online only if they trust both the supplier and the shipper to deliver the purchased product on time, that the quality of the product is as expected, and that consumer protection and contract law will be applied at least equally compared to the offline world (Corbitt et al. 2003). Trust in e-commerce is more difficult to develop than off-line because direct physical links with the product and with the seller are missing. This may be worsened when the consumer buys from a trader located in another country because of language barriers, fear of not being able to get in contact, and uncertainty about applicable consumer protection law. As a consequence, consumers need to find other factors of trust to decide whether or not to buy. Unjustified geo-blocking—This practice refers to the phenomenon by which certain e-retailers decide to disable sales to customers located in other EU Member States (MSs). Geo-blocking is usually implemented by refusing to deliver or to accept payments cross-border, by blocking access to the website when consumers try to access it from another MS or by re-directing consumers to other websites and/or by asking payment with national credit/debit cards. These restrictions often appear at the final stage of the shopping process, when the consumer already spent a E-commerce of Goods: Testing the European Single Market 137 certain amount of time on a website.11 The geo-blocking issue emerges at different stages of the e-commerce chain. Retailers might decide to geo-block cross-border online sales by their own decision, but they could also be obliged to so because of restrictive clauses imposed by manufacturers in the distribution contracts. Unjustified geo-blocking is an obstacle for cross-border e-commerce and for DSM strategy.12 A public consultation launched by the EC in 2015 found that the large majority of consumers experience geographical restrictions when buying online.13 At the same time the majority of businesses highlight the importance of tailoring their prices to different national markets. 4.2 On the Delivery Side High tariffs—Within the EU, there are significant price differences when delivering nationally or cross-border. This is true also when cross-border delivery would be equivalent or even shorter from a geographical distance point of view. Cross-border delivery prices are often quoted without a clear relation with the effective cost of the delivery.14 There are concerns that the high cross-border delivery prices arise because of the level of termination fees charged by national POs from the interconnection point to the delivery address (FTI Consulting 2011). The EC is attempting to shed light on how such termination fees are set to understand whether they are a source of excessively high prices. So far there has been a great degree of opacity regarding them, since they are considered sensitive commercial information by the companies. There is not even clear information yet in the regulatory debate about whether such termination fees are excessively high or excessively low (Marcus and Petropoulos 2016). Lack of transparency and information—Transparency and information are other key elements both for a competitive market and for consumer protection. The more consumers and businesses are aware of existing services and prices, the more effective is their choice and the tougher is market competition.15 However, the EC claims that consumers and businesses are only aware about a small number of alternative delivery services and often use the national PO by 11 Mystery shopping survey on territorial restrictions and geo-blocking in the European Digital Single Market (2016), conducted by GfK Belgium PS for the European Commission. 12 European Commission (2015). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions a Digital Single Market Strategy for Europe, COM/2015/0192 final. 13 Proposal for a Regulation of the European Parliament and of the Council on addressing geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC. 14 http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id¼8610. 15 Vigilance against potential collusion is needed when competitor prices are easily available. 138 P. Gori and V. Silvestri default.16 This lack of awareness may create barriers for new operators to enter a market or gain market share. From the perspective of incumbent suppliers, lack of market information relaxes the competitive pressure on them. This in turn means not only higher delivery tariffs, but also possibly distorts the incentives to invest in quality features, such as timing, more flexible options (e.g. multiple pick-up locations) and value-added services such as tracking (Spence 1975; Sappington 2005). 5 EU Regulatory Strategy to Foster E-commerce From a regulatory point of view, the EC decided to foster e-commerce by introducing the so-called “E-commerce package”. This consists of three legislative proposals to address unjustified geo-blocking, foster cross-border parcel delivery, and improve the enforcement of consumers’ rights and clarify which are to be considered unfair commercial practices. In the postal sector, the main current regulatory instrument is the Third Postal Services Directive.17 Although it was amended in 2002 and 2008, the current legal framework is now 20 years old, with different national implementations within the EU. The absence of a harmonized regulatory framework constitutes a significant obstacle to cross-border delivery, particularly because of high administrative costs and legal uncertainty. The proposal for regulation on cross-border parcel delivery is a step towards a more unified approach. 5.1 On the E-commerce Side Insufficient Trust: As already mentioned, trust is a matter of both cognitive/emotional elements that are under the control of sellers and to aspects such as payment security and data protection, on which is primarily up to regulators to intervene. Eventually, consumer protection issues can emerge as a general unifying theme. Regarding payment security, the second Payment Services Directive (PSD 2), adopted in 2015, aims at making payments across EU Member States as easy, efficient and secure as payments within them.18 The three key-points of the 16 Proposal for a Regulation of the European Parliament and of the Council on cross-border parcel delivery services (2016). 17 Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services. 18 Directive 2015/2366/EU of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC. The latter entered into force on 12 January 2016 and rules will apply from 13 January 2018 (deadline for transposition in national systems). E-commerce of Goods: Testing the European Single Market 139 Directive are strict security requirements of e-payments (including protection of financial data and reduction of fraud risk), transparency and information; and rights and obligations for users and providers (including limits to surcharging). In the field of data protection, enshrined in the EU Charter of Fundamental Rights, a new General Data Protection Regulation (GDPR) will become operational in May 2018.19 Several consumer data protections were specified: enhanced transparency and information, the right to be forgotten, limits to profiling, the right to rectification and erasure, and the right to data portability, among others. On the processor side, precise and strict obligations are also present, including among others maintaining a record of processing activities, implementing all the technical and organizational measures to ensure an appropriate security level, running impact assessments, and notification of any significant security breach to the EC (and to the data subject if directly impacted on). Finally, the EC introduced a proposal for the review of the Regulation on Consumer Protection Cooperation.20 One of the main motivations for the review is strong evidence of a suboptimal enforcement of consumer protection rules. The coordination role of the EC and harmonization within the EU can play a pivotal role.21 Unjustified geo-blocking—Tackling unjustified geo-blocking is probably the key pillar of the strategy of the EC to foster e-commerce. In May 2016, the EC published a Proposal for a Regulation on Geo-Blocking.22 It applies to online sales (except for transactions where goods and services are purchased by a business for resale) and to all traders, European and non-European, operating in the EU. The main objective of the proposal is to forbid any discriminatory behavior adopted on the basis of nationality or country of residence, while calling on traders to ensure any necessary action to guarantee that the connected rights of consumers are respected. Its main aim is to tackle all geographic restrictions that are deemed unjustified by, for example, high delivery costs.23 19 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation). The latter entered into force on 24 May 2016 and will apply from 25 May 2018. 20 Proposal for a Regulation of the European Parliament and of the Council on cooperation between national authorities responsible for the enforcement of consumer protection laws. 21 See paragraph 1.3 of the Proposal. 22 Proposal for a Regulation of the European Parliament and of the Council on addressing geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC. 23 https://ec.europa.eu/digital-single-market/en/geo-blocking-digital-single-market (last access on 09/05/2017). 140 P. Gori and V. Silvestri The proposal tackles different geo-blocking techniques: blocking websites, re-directing the costumer to another interface because he is accessing the website from another MS, imposing different prices, refusing to accept payment transactions, and denying delivery. In cross-border purchases, the trader should still sell the goods, but it is not obliged to organize the delivery to the MSs in which the customer resides, where the seller does not pursue or direct his activities (the buyer should arrange the pick-up). 5.2 On the Delivery Side High tariffs and lack of transparency and information—The main strategy emerging from the “Proposal for a Regulation on cross-border parcel delivery services” (2016)24 is to use regulatory action and cooperation within the EU to monitor and assess tariffs of USPs and their transparency. By so doing, high terminal rates might be limited and market competition fostered. In particular, each USP would be required to annually submit its list of tariffs to their National Regulatory Authority (NRA). Other operators may submit their tariffs on a voluntary basis, provided that the underlying services are comparable. Moreover, the USP shall also submit its termination rates, but these data would not be published, because they are considered commercially sensitive information. NRAs would use the information to assess the affordability of the prices of the USP. Should they conclude that the cross-border parcel delivery service prices are not affordable, they shall ask the USP to provide justification. A joint December 2015 statement by the European Regulators Group for Postal Services (ERGP) and the Body of European Regulators for Electronic Communications (BEREC) of December 2015 outlined the power that national regulators should have to monitor cross-border parcel delivery and to intervene in case of transparency issues for European deliveries. The same statement also highlighted the importance of fostering and developing initiatives to increase consumer and supplier information and awareness.25 The EC also supports the development of an informative platform for delivery services, which would allow e-retailers to have a wider overview of their delivery possibilities.26 Lack of regulatory harmonization—The Regulation of cross-border parcel delivery would be a first strong instrument to tackle this issue. NRAs would have a central and key role in the expected trend of declining tariffs. The implementation 24 European Parliament and Council, Proposal for a Regulation on cross-border parcel delivery services, 25.5.2016 COM (2016) 285 final. 25 Joint BEREC-ERGP Opinion (2015), Price transparency and regulatory oversight of crossborder parcels delivery, taking into account possible regulatory insights from the electronic communications sector. 26 European Parliament and Council, Proposal for a Regulation on cross-border parcel delivery services, 25.5.2016 COM (2016) 285 final. E-commerce of Goods: Testing the European Single Market 141 of the assessment procedure is in fact the instrument that the EC is suggesting to monitor and assess prices of the USPs, with the consequent idea fostering competition that would put pressure on USPs to decrease potentially excessive prices. 6 Conclusion Citizens are moving from receiving letters to receiving parcels and thus there is a link going in both directions between e-commerce and the parcel delivery market. Compared to other phenomena under the DSM umbrella, e-commerce is characterized by the need for an overall regulatory approach. E-commerce indeed brings novelties such as the change in the relationship between seller and buyer, improved price comparison possibilities, disclosure of information (with more risks of fraud), the need of delivering goods in the last segment of the transaction, and protection of personal data. Within the Single Market, geo-blocking practices, delivery prices and quality (particularly cross-border), potential anti-competitive behaviors, and trust and security issues, are the most crucial elements to be addressed. The EC has adopted an all-embracing approach aiming at eliminating critical barriers that restrict e-commerce’s potential. To maximize the level of harmonization, the EC will employ regulations that are binding on Member States. It is now too early to provide an assessment, but one can already see the merit of this horizontal and harmonized approach. The new 2017 Consumer Conditions Scoreboard reveals that consumers are progressively buying more online (also thanks to specific consumer protection initiatives) and that their trust in e-commerce is increasing, in particular when buying from another EU country. While this demand is growing, the survey shows that retailers do still have concerns about selling cross-border within the EU.27 It will be most insightful to further analyze the complete regulatory framework once it is set and implemented. References BEREC-ERGP Joint Opinion (2015), Price transparency and regulatory oversight of cross-border parcels delivery, taking into account possible regulatory insights from the electronic communications sector. Cardona M., Duch-Brown N., Francois J., Martens B. and F. Yang (2015). The Macro-economic Impact of e-Commerce in the EU Digital Single Market. 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