Competition and antitrust in the digital age

OnDemand

April 13 2017

Competition & Antitrust Slovenia

While the digital economy offers abundant opportunities to customers and retailers alike, it also raises a number of competition concerns, including the impact on bricks-and-mortar businesses, the potential for abuse of market power by major digital platforms and the challenge of fostering online competition while preventing free riding. Competition authorities must evolve and adapt traditional antitrust principles and approaches to meet the challenges of the rapidly changing digital market.

What impact has the rapidly changing digital market had on competition in your jurisdiction, and how have legislators and competition authorities responded?

The rapidly changing digital market has certainly had a significant impact on online and traditional sales channels in Slovenia; however, studies show that the number of online purchases is still below the EU average. This number decreases in relation to individuals engaged in cross-border online shopping. On the other hand, the number of online stores per capita is high, at approximately 1,500 online retailers.(1)

The most common barriers which limit or prevent enterprises from partaking in online sales are connected with:

  • products being unsuitable for online sale;
  • problems regarding logistics; and
  • problems associated with the cost of introducing web sales.(2)

Taking into account that online services have not yet reached their peak, the Slovenian legislature and competition authorities have not yet faced major competition concerns in this regard. As such, their views on the topic are eagerly awaited.

In terms of market definition, are online services considered to be in the same market as traditional services in your jurisdiction? What impact has this had on competition?

Over the past four years, the Competition Protection Agency (AVK) has not taken an official stance as to whether online services are part of the same market as traditional services.

For example, in its 2016 merger control clearance decision concerning Zara Holding BV and Slovenian companies Pina, Maduro, Quick Adria, Beba and Zafir, in which the notifying party specifically mentioned online purchases as part of the market for retail trade of clothes and shoes, the AVK provided no opinion on the topic and left the final definition of 'product market' open.

Based on the above it seems that the AVK has not had to answer the question of whether online services should be considered as part of the same market as traditional services.

What types of conduct constitute abuse of dominance in the online space and what practices are most likely to catch out unwary online players?

The AVK has not issued a decision on abuse of dominance in the online space; however, it is safe to assume that the practices which recently caught the attention of the European Commission and the national competition authorities of other member states could be deemed problematic if carried out in, or having an effect on, the territory of Slovenia.

What steps are competition authorities in your jurisdiction taking to prevent online retailers and service providers from free riding on the investments of bricks-and-mortar retailers and service providers?

Based on publicly available information, unfortunately, the AVK has not yet adopted an approach towards free riding. Its position is expected to mirror the European Commission's initiatives and approaches.

How can competition authorities best ensure that these steps do not hinder innovation or consumer choice and promote the continued evolution of online services?

There has been no relevant practice in Slovenia with respect to this issue.

For further information on this topic please contact Eva Škufca or Urša Kranjc at Schoenherr by telephone (+386 1 200 09 80) or email (e.skufca@schoenherr.eu or u.kranjc@schoenherr.eu). The Schoenherr website can be accessed at www.schoenherr.eu.

Endnotes

(1) Online market trends in Slovenia: Cross-border ecommerce soars (www.digitalstrategyconsulting.com/intelligence/2016/01/online_market_trends_in_slovenia_crossborder_ecommerce_soars.php).

(2) Digital Slovenia 2020 – Development Strategy for the Information Society until 2020 (www.mju.gov.si/fileadmin/mju.gov.si/pageuploads/DID/Informacijska_druzba/pdf/DSI_2020_3-2016_pic1.pdf)

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