eBay – secret restrictions forcing up brand prices

According to eBay, customers buy their goods online because they think this is the easiest way to buy branded goods at the best prices, but the online marketplace says that ‘secret restrictions’ are preventing UK online shoppers from getting the best deals.

eBay has released a statement about this issue saying, “eBay’s research shows an overwhelming 88% of UK consumers expect to find their favourite brands through online marketplaces, and 65% expect to find the best prices on these sites as well.

“However, restrictions – which are not made public to consumers – mean that shoppers often pay higher prices for items ranging from designer clothes and perfume, to kitchenware and stationery by restricting where they can be sold online. The consumers surveyed criticised the use of hidden restrictions by brands with 83% asking brands to be more open with them about the secret practice.”

eBay added: “European competition regulators are currently examining the platform ban practice – used by some brands to prevent their products from being sold via online marketplaces. The European Commission has launched an investigation into the practice with a view to potentially making it illegal to restrict the sale of goods by small businesses in this way. Its final report is due to be published in early 2017.”

Senior Vice President for eBay EMEA, Paul Todd, said: “We welcome the Commission’s review. Our sellers tell us that online sales restrictions allow brands to keep prices artificially high, restrict consumer choice and may breach EU competition rules.”

For online marketplaces, the removal of such restrictions should see competition rocket and for them, business improve.

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