EuroCommerce InBrief | Issue 192 | 9 June 2020

Ohessa ajankohtaista tietoa EuroCommercen 9.6. uutiskirjeestä lainattuna:

Consultations on Digital Services Act, including new competition law tool and ex-ante platform regulation

The European Commission last week launched its long-awaited consultations on the Digital Services Package. These comprise, firstly a consultation on the Digital Services Act, modernising legislation appropriate to the digital age. This looks at a safer consumer online environment; the liability of digital services acting as intermediaries; the gatekeeper power of digital platforms, including the need for an ex-ante platform regulation; online advertising and smart contracts; challenges around platform workers and competing the single market for digital services. The second consultation covers a new competition law tool. Both the new competition law tool and the possible ex-ante platform regulation aim to keep markets open and contestable, complementary to each other and to existing competition tools (anti-trust, merger control, dominance). The ex-ante platform regulation seeks to target the practices of ‘systemic’ online platforms (and define these). The new competition law tool could have a much broader scope and enable the Commission to investigate markets with a structural competition risk in any sector of the economy. Along with these two consultation documents, the Commission has published three roadmaps (Digital Services Act, ex-ante regulation, new competition tool) for consultation until 30 June. We are currently assessing with members the policy options set out in the Commission roadmaps with a view to submitting a contribution to the process by 30 of June and to the stakeholder consultation by 8 September. You can find all consultations here.

European Commission launches €750 billion recovery package

As trailed in our last InBrief the European Commission announced on 27 May a €750 billion package of measures to restart the economy after the COVID-19 crisis. The package comprises €500 billion in grants and €250 billion in loans. We issued a notesetting out the main elements. This significant amount will be raised on the market by the EU, and paid back between 2027 and 2058. This comes on top of a proposed slight increase in the Commission’s budget under the Multi-Annual Financial Framework (MFF), which will go to existing EU programmes. The package creates some new financing instruments. Most of the financing will be “horizontal”, therefore not sector-specific, and will be distributed through member states and use the European Semester mechanism to guide member states on where they should focus. The Commission’s analysis shows that retail and wholesale, identified as one of 14 essential eco-systems, is one that has been suffering most from the crisis and in biggest need for investment and liquidity support. We encourage members to use these findings in lobbying their national governments’ recovery plans and how they use money released (mainly in 2021) under the EU package. EuroCommerce will continue to engage with the Commission to ensure that retail and wholesale are given appropriate priority in the implementation of these programmes.

Commission proposes extra €55 bn EU for social funds to boost recovery

The Commission is proposing change to EU’s social funding programmes ESF+, Fund for European Aid to the Most Deprived), to tackle key challenges in the post-crisis era such as rising youth unemployment, channeling basic food and material aid to the most deprived, as well as child poverty. This is aimed at helping employees acquire new skills to navigate the green and digital transition. As part of the Commission’s proposed recovery package, the European Regional Development Fund, European Social Fund and Cohesion Fund would receive €55 billion in 2020-2022 to counter the negative impact of the coronavirus on the labour market. This will be channeled through REACT-EU, in which the European Social Fund plays a key role in sustaining employment and supporting social inclusion. With bankruptcies and restructuring expected in the wake of the crisis, the European Globalisation Adjustment Fund (EGF) will be increased to €386 million from 2021, along with the Just Transition Fund (to €40 billion) to help regions transition towards climate neutrality by investing in reskilling of workers, and InvestEU (to €32 billion), supporting social infrastructure or microfinance to social entrepreneurs. The Erasmus program (€25 billion), partially allocated to fund Vocational Education and Training (VET).

Commission ends export restrictions for protective equipment

At the peak of the COVID crisis, the European Commission restricted the export of some personal protective equipment in order to stop Member States from imposing unilateral national bans. These restrictions raised concerns from several countries (e.g. the Western Balkans) dependent on the EU countries for supplying them with medical protective equipment. Following an approach from these countries, the Commission in April limited its export authorisation scheme to protective masks only, and in a further step exempted Western Balkan countries, Gibraltar and territories of EU countries outside the EU customs union. As the pandemic seems to gradually come under control, the EU phased out the restrictions on 26 May. EU countries are no longer permitted to restrict exports of personal protective equipment outside the EU.

WTO and EU highlight significant impact of COVID crisis on trade

According to the WTO Goods Trade Barometer, world trade in goods contracted sharply in the first months of 2020 and is set to continue declining for the rest of the year. It scored 87.6 on a scale where trade growth in line with medium-term trends is 100. This is the lowest level since the indicator was launched in 2016. These figure bear out the WTO’s trade forecast in April of global trade in goods declining 13-32% in 2020, depending on the scale of the pandemic. The European Commission has also published their second report on the impact of the pandemic on trade. Similarly to the WTO, they predict a decrease in global trade between 10%-16% in 2020. As part of this, theexpected reduction in EU exports is between 9% and 15%, and in imports from non-EU countries (goods and services combined) some 11% to 14%. This amounts to a reduction in extra-EU27 exports of between €282 and €470 billion and in extra-EU27 imports of goods and services of €313 -€398 billion.

Commission publishes consultants’ study on vertical restraints

The study conducted by VVA for the Commission on the evaluation of the Vertical Block Exemption Regulation (VBER) can be accessed here. The 900-page document reflects an extensive review of literature, stakeholder perception of certain practices such as selective distribution, exclusive distribution, resale price restrictions, most favoured nation clauses and their cumulative effects. It confirms the importance of the digital transition and reports on national competition authorities’ experience in enforcement of the regulation, and an econometric analysis of its effects and a study on online consumer behaviour. We are concerned that, based on the sample and survey methodology used, the stakeholder survey looks unduly skewed towards suppliers. The study will feed into a Commission staff working document expected in July or September. This will be the basis for the second phase of the review process, including work on possible changes to the regulation. The EuroCommerce Supply Chain Committee is currently finalising a set of proposed amendments to VBER to support our position on key aspects related to selective distribution, dual pricing, resale bans on third party platforms, territorial supply constraints, and seeking clarification on commercial agencies.

European Data Protection Board publishes its annual report

The European Data Protection Board (EDPB) has published its 2019 annual report – Working together for stronger rights – with an overview of the EDPB’s work, including guidelines, public consultations and stakeholder events. It also gives details on feedback to the stakeholder survey on the content and adoption process of EDPB Guidelines. Retail and wholesale was the sector most represented in the review, after finance, banking and insurance. For 2020 the EDPB aims to provide guidance on data controllers and processors, data subject rights, and the concept of legitimate interest. It will also intensify its work on implications of advanced technologies, such as connected vehicles, blockchain, artificial intelligence, and digital assistants. Last month marked Data Protection Regulation’s (GDPR) second anniversary of entering into force. The Commission is set to publish its own review of the working of the GDPR on 24 June.

Parliament preparing report on product safety in the single market

The European Parliament’s IMCO committee is working on a draft resolution on addressing product safety in the single market under Marion Walsmann, (EPP,DE). The draft report focuses on the safety of all products, compliance with existing rules, market surveillance, product recalls, and a strong focus on AI systems and standards and cybersecurity. MEPs have submitted 289 amendments the Mrs Walsmann’s report. Several call on the Commission to take account of the draft report provisions in future revision of the General Product Safety Directive (GPSD). Other amendments focus on the importance of traceability of products, the definition of a “product” and “safe products”, and on online markets offering unsafe or illegal products. MEPs will discuss the amendments this month, and vote in committee in October, with a plenary vote provisionally scheduled for November. EuroCommerce is monitoring the process and will intervene where relevant. According to the Commission’s revised work programme for 2020, the revision of GPSD has now been delayed until Q2 2021.

EuroCommerce updates labelling guidelines for primary ingredients in food

In January, the Commission published its Q&A note on the Implementing Regulation covering origin indication of primary ingredients. This clarified some uncertainties in the regulation, which has applied since 1 April. We have now updated our joint industry Guidance published in in 2018 together with FoodDrinkEurope and Primary Food Processors, to incorporate the Commission Notice, to give members comprehensive information on how to interpret the regulation’s provisions. Our industry guidance differs slightly from the Commission Q&A in some areas, such as treatment of “made in” statements, or different levels of origin of ingredients it is clear on scope, identification of primary ingredients, geographical levels, and placing and presentation of the information. We have prepared an analysis for members of these various elements.

European Commission launches next step on minimum wage regulation, hints at higher wages for retail

The Commission last week published its second-stage social partner consultation on minimum wage. Despite the misgivings of most employer associations, the Commission has concluded that there is a need for an EU initiative on the minimum wage to support post-Covid-19 recovery and domestic demand – and for protecting ‘low-wage workers in the retail and tourism sectors’. Paradoxically, while mentioning the need to safeguard jobs and competitiveness, the Commission fails to take into account the economic situation of many European retailers and wholesalers. EU action could consist of a directive with binding minimum requirements, or a Council Recommendation on fair minimum wages, monitoring implementation through the European Semester. The Commission considers setting indicators for minimum wages and wage floors in collective agreements, extending these schemes to cover all workers, setting criteria for updating minimum wages, and measures to achieve closer involvement of social partners in statutory minimum-wage setting systems and effective compliance. In our reply to the first consultation in February, EuroCommerce argued that EU action on minimum wages was not appropriate, eroding the autonomy of social partners in collective bargaining, and that pay and collective bargaining were solely a member state competence.

Council Presidency Troika present their trade agenda

We have seen a document being prepared by the three next Council Presidencies (Germany, Portugal and Slovenia) on their plans for trade policy in the next 18 months. They will focus on Europe’s economic and social recovery from the corona virus and see trade as pivotal in it. They will focus on achieving further ambitious free trade agreements with Australia, New Zealand and Indonesia as well as the planned Partnership and Co-operation Agreement with Thailand, all by 2021. They will also seek rapid ratification of the important updates of the EU-Mexico agreement, and of the association agreement with Chile. They will also try to make progress on the EU-Mercosur Association Agreement approval and a possible re-launch of trade and investment negotiations with India. In all of these they will look for a level playing field and better access to public procurement markets. They will also push forward reform of the WTO and strengthening the multilateral rules-based order. That said, they are cautious on China and the EU to become more independent, especially when it comes to medicines and medical equipment.

Fisheries control regulation : PECH discussions

The European Parliament’s Fisheries (PECH) committee resumed discussion in April on fisheries control regulation for the first time under its new mandate. The Commission proposal put forward in 2018 introduced traceability requirements covering e.g. lot identification, FAO area, fishing gear, all to be kept and transmitted electronically along the supply chain. The PECH draft report does not amend this traceability requirement, but introduces a series of amendments which could potentially impact our sector, including a centralised database for inspection reports accessible for consumers and the definition of a ‘lot’. EuroCommerce is monitoring the process and will agree possible voting recommendations with members.