LITHUANIAN AND LATVIAN COMPETITION AUTHORITIES LAUNCH ONLINE MARKETPLACES MONITORING TO UNDERSTAND SECTOR AND POTENTIAL RESTRICTIONS OF COMPETITION

Considering the development of e-commerce in recent years, the Lithuanian and Latvian competition authorities are launching parallel business surveys in their countries seeking to find out whether businesses encounter any possible restrictions of competition in online marketplaces and to identify common problems that are relevant for companies operating in both Baltic states.

The rapidly evolving e-commerce sector has increased its importance as a sales channel during the COVID-19 pandemic. Online marketplaces which provide intermediation services have also gained popularity, enabling more and more businesses to reach consumers.

According to the data provided by the Lithuanian Department of Statistics, the part of companies engaged in e-commerce amounted to 36 per cent in 2020 and increased by almost 7 per cent points compared to 2019, while 22.3 per cent of all firms used online marketplaces as a sales channel (in 2019 – 14.8 per cent). The growth of e-commerce has been also observed in the neighbouring Latvia.

Both authorities understand the importance of online marketplaces for consumers and businesses, especially for small and medium-sized enterprises. Online intermediation services help to promote entrepreneurship and new business models, as well as foster trade and innovation, which can improve consumer welfare.

The operating principles of global online marketplaces, such as Amazon, eBay and Booking.com have been studied on several occasions in the context of competition law, however, the functioning of smaller platforms that operate in the regions, for instance, in the Baltics, has not been analysed in greater detail so far. Therefore, to identify potential competition problems in the sector, the Latvian and Lithuanian competition authorities are launching business surveys.

“Monitoring of online marketplaces will give a better understanding of the operation of this trade channel, its accessibility and spread of algorithms, as well as help to identify the factors that potentially restrict effective competition. Business surveys conducted in Lithuania and Latvia will allow us to compare the principles of operation of online marketplaces in both countries and possibly identify common problems”, said the Lithuanian competition authority‘s Chairman Šarūnas Keserauskas.

Following the surveys, both authorities will publish the findings and decide on advocacy or other actions which are necessary to ensure effective competition in the sector.

Online marketplace merchants are encouraged to participate in the survey on competitive environment and changes by 5 May 2022. The survey is available at https://forms.office.com/r/VPV69kAWMp. Konkurencijos taryba also invites all interested parties which have observations and insights about the activities of online marketplaces in Lithuania and related potential competition problems to provide this information by e-mail prekyvietes@kt.gov.lt.

In the strategic plan 2022 e-commerce has been chosen among four priority sectors which Konkurencijos taryba is going to monitor more closely and take active enforcement and advocacy actions.