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Speaking today on the launch of the Commission’s communication on a Retail Payments Strategy for the EU, EuroCommerce Director-General Christian Verschueren said:

“The COVID pandemic has accelerated the existing trend for transactions to go online. At the moment, this inevitably means more use of credit and debit cards. Retailers and other merchants already pay a lot for accepting cards, and even more if a transaction is online. We are seeing, despite very welcome action on some card fees under EU legislation, other unregulated fees rising as much as 150% over the last 18 months. This has cost merchants, already struggling due to COVID, nearly €1 billion extra, and this trend looks likely to continue. We therefore welcome the Commission commitment in today’s communication to promote alternative payment systems. But these will take at least another 2-4 years to roll out, and merchants need urgent action now to address this growing problem.”

Creating a vibrant, competitive and robust European payments market is in everyone’s interest, as well as keeping access open to all alternatives, including cash. We are therefore very pleased to see the Retail Payments Strategy, and recently welcomed the announced collaboration between European banks in the European Payments Initiative. We fully share the Commission’s determination to get competition in retail payments moving through use of instant payment technology such as SCTInst and new applications for mobile payments, already important as people increasingly move to buying goods and services on their mobile phones.

We regret, however, while we wait for new alternative systems, the Commission’s decision not to use the review of the Interchange Fee Regulation (IFR), to widen its scope to deal with the ongoing rise in unregulated fees, particularly card scheme fees. Recent evidence suggests that these (and other fee increases) may cancel out much of the benefit of the regulation. This situation further strengthens the position of the two US card schemes, whose market power has been a contributory factor in the failure of at least four earlier EU initiatives. This could happen again, and, as we saw in other markets with powerful incumbents, regulation may be the only way to allow new competitors to grow. 

Verschueren added:

“As Mrs Vestager said yesterday: ‘Competition can help, but it cannot replace the essential role of regulation….to protect consumers and defend competition’. That is why we, and other sectors such as hospitality and travel, who are facing major challenges to their survival, need regulation - and need it soon - to address the loopholes in the IFR and to give new competitors a chance. And let’s not forget: it is consumers who ultimately foot the bill.”

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Speaking today at a virtual conference held by the World Retail Congress, EuroCommerce Director-General Christian Verschueren set out the challenges facing retail across Europe and the vital role of the sector in supporting European economic recovery:

“Retail has been affected in different ways during the pandemic, but the whole ecosystem will see major change resulting from it. We will see a number of well-known retailers close their doors for ever, with fashion retail particularly hard hit, and others cutting the number of shops and staff they presently have. The pandemic also accelerated the trend towards online sales, and consumers, now used to e-commerce, will use this channel more in future. Private consumption makes up some 60% of EU GDP, and if retail is in trouble, so will the rest of the economy be. Equally, with help in speeding up its already active engagement with digital innovation and sustainability, the retail and wholesale ecosystem can be a powerful driver for getting Europe back on its feet again”.

During the hight of the pandemic, food and grocery retailers faced a sudden upsurge in demand for daily essentials, while suppliers and logistics companies were either closed or struggled to keep up. Retailers who stayed open also incurred significant costs to keep staff and customers safe and find alternative sources where there was disruption. Employees in the sector went on working hard to ensure consumers were able to get the essential products they needed, and we pay tribute to their dedication and immense hard work in keeping the supply chain working to everyone’s benefit.

Non-food retailers were either closed by public order or suffered up to 90% drops in footfall and sales due to public health measures. Wholesalers supplying a largely closed catering and hospitality industry saw their sales fall away to nearly nothing.

Retail and wholesale was recognised by the European Commission as an essential ecosystem in driving European recovery, among those hardest hit by the crisis, and a clear priority in national recovery programmes seeking funding under the Next Generation EU recovery measures and EU budget. Retailers and wholesalers provide industry direct access to consumers, valuable intelligence about what they are buying, efficient distribution and professional expertise and services. This can make the difference between a manufacturer succeeding or failing with a new or existing product.

Employing 29 million Europeans, and thus an important revenue source for families in the local area, the sector is also a keystone in keeping rural communities and urban centres an attractive place to live and work.

Verschueren added:

“Without shops, communities fade away. Hence the need to ensure that national recovery plans help retailers and wholesalers, particularly SMEs, who make up 99% of our sector, step up their efforts to go digital, their already major efforts to make their operations sustainable across the board, and support to develop the skills of their workforce to meet these new challenges.”

Artificial Intelligence (AI) can offer significant benefits not just to businesses, but also to consumers and society. Retailers and wholesalers are central actors in the supply chain and are in daily contact with Europe’s 450 million consumers. Many retailers and wholesalers use and develop Artificial Intelligence applications to operate sophisticated and efficient systems ensuring reliable and safe sourcing and distribution of goods to meet consumers’ demand and keep them safe. In most cases, AI applications used by retailers and wholesalers carry no direct impact or risks for individuals but improve shopping experiences and internal efficiencies.

EuroCommerce welcomes the opportunity to provide input to the Commission’s Inception Impact Assessment for the upcoming legislative framework on AI. We believe that the combination of set objectives in the Option 1 and Option 3.b are the best to support and foster further AI developments in the EU.

To secure a future-proof framework that will support an innovative and competitive retail and wholesale sector, EuroCommerce believes that:

- Having a positive narrative towards AI technologies is a prerequisite to unlock Europe’s tech sovereignty.

- The future European framework for AI should be technology-neutral and focus more on achieving desirable outcomes rather than regulating AI tools, as it is already the case with existing legislation such as the General Data Protection Regulation.

- The future EU framework for AI should support the digital development of SMEs. SMEs need to be supported in their digital transformation and provided with the right set of digital skills and training that will help them responsibly use the potentials offered by AI.

- The future European framework for AI should rely on a simple, narrow, clear, and harmonised definition of ‘Artificial Intelligence’.

- The use of already existing AI applications should not be disrupted.

- Careful attention should be paid to avoid overregulation – especially considering recently adopted EU and national legislation, support the use of existing AI technologies and bolster innovation.

- Regulatory sandboxes for testing high-risk AI solutions could potentially enable businesses of all sizes to explore the potential of Artificial Intelligence.

- The European Commission’s priority should be to work towards a global framework that would secure a level-playing field beyond EU borders.

- Competition coming from outside the EU should not be ignored.

- B2B data sharing for the purpose of AI development should remain on a voluntary basis.

- Investing in skills, digital education and research should be a priority of the EU institutions.

This position paper is complementary to EuroCommerce’s contribution to the roadmap and public consultation Digital Services Act – deepening the internal market and clarifying responsibilities for digital services.

EuroCommerce has a broad membership of different types of service providers (B2C, B2B, intermediaries), selling online, offline and omnichannel, who also provide or are users of a wide range of information society services. Our members core business is selling products, and the focus of our contribution will be mainly on this service activity and related issues.

At the core of our discussions is that the EU legal framework should:
(i) ensure high consumer trust;
(ii) provide legal certainty for all market players irrespective of which sales channels they use to offer their services;
(iii) ensure balanced responsibilities for all market players depending on their position in the supply chain; and
(iv) create a level playing field for all businesses that offer products to EU consumers wherever they are established.

Key recommendations

EuroCommerce supports one horizontal framework applying to information society service providers, which takes into account the fundamental digital transformation of our sector and the merging of brick and mortar and online channels i.e. omnichannel. This will support the further development of a real Single Market without physical or digital borders for EU businesses and consumers, and provide clarity to all information society services targeting the EU market.

A new framework should also be flexible, supporting the wide diversity of existing and future business models of information society services providers and the services they offer. One of the most important trends, is the seamless integration of the offline and online world into an omnichannel environment, where consumers enjoy a personalised and connected experience. The digital world has become so divergent and intertwined with the physical world, that depending on the type of activity and associated risk with that activity, more tailormade rules are necessary that should be channel neutral, ensure a level playing field for all businesses and that consumer are safe and consumer trust is high.

EuroCommerce welcomes the opportunity to provide input to the consultations on an ex ante instrument regulating practices of “large online platforms with a gatekeeping role” as part of the DSA consultation. Digitalisation has increased competitive pressure in retail and wholesale and many players now have some form of online offering (pure play or in combination with brick and mortar - omnichannel) creating convenience and value for consumers. The COVID-19 crisis has accelerated the digitalisation of the sector and this trend is likely to continue in the future and should be supported as part of the recovery plans.

To remain competitive, retailers and wholesalers need a regulatory framework that supports strong European retail and wholesale ecosystems in a digital environment and gives them legal certainty and incentives to invest in robust omnichannel strategies. This framework should also enable EU authorities to enforce EU rules towards all players on the European market – including non-EU traders in order to create a level playing field and ensure consumer safety. We ask the Commission to take these factors into account when conducting their impact assessments.

We wish to make the following main points, which we will detail further below:

1. Online platforms are very diverse in the services they offer; they operate in a very dynamic environment and generate significant consumer benefits. This makes a one-size-fits-all approach difficult.

2. The concept “large online platforms with a gatekeeping role” is ill-defined and regulating on this basis could lead to legal uncertainty and disincentives to invest in and grow European platforms.

3. The European competition law tools are currently being revised to make them fit for the digital environment and developments in digital markets. Particularly the revision of the market definition notice is relevant in this context as it is vital for the competition assessment and hence for the way dominance is found. The existing tools allow a flexible approach to the functioning of markets taking into account the specificities of different markets and business models.

4. Before seeking to create an entirely new set of rules we would ask the Commission to consider an alternative approach allowing a case by case scrutiny based on dominance, and refining EU competition law where necessary to address new business models and practices enabled by digitisation.

5. We further highlight that the Platform to Business Regulation is a first step in regulating relations between platforms and business users. We would recommend the Commission to reassess the situation when the regulation, which only entered into force in July 2020, has shown whether it is effective.

EuroCommerce shares the Commission’s aim of ensuring that markets remain open and contestable for innovators, businesses, and new market entrants. Markets, and in particular digital markets, are developing fast and are expected to continue to do so, with new services and business models constantly emerging. It is therefore critical that any possible policy intervention aimed at addressing certain business practices or models does not unintentionally stifle innovation or the dynamism on the market and thus undermine the ability and incentives of European players to grow and compete.

To remain competitive and grow, retailers and wholesalers need a regulatory framework that provides legal certainty and a level playing field and gives incentives to develop their businesses online as well as offline. We ask the Commission to take these factors into account when conducting their impact assessments.

We wish to make the following main points, which we will detail further below:

1. We are, not convinced that a New Competition Tool would contribute to creating such a framework. Rather, we are concerned that this would represent a fundamental change in how markets are assessed, and competition policy enforced, by focusing on market structures rather than on infringements. We would ask the Commission to provide a much clearer justification for the development of a completely new tool, in any of the forms proposed.

2. A new tool allowing the imposition of remedies without a finding of infringement could lead to a disproportionate interference in the market economy and have a chilling effect on innovation, growth and investment.

3. In our opinion, Articles 101 and 102 TFEU and the related EU competition law tools are sufficiently flexible to catch all new forms of conduct that pose a threat to competition and the competition rules toolbox is under review, in particular to adapt it to digital developments. In addition, the Commission has the ability to undertake sector inquiries and regulate in cases of market failure.

4. We are also not convinced, that the legal basis proposed by the Commission is appropriate. Neither Art. 103 TFEU nor Art. 114 seem to be an appropriate legal basis.

5. We would welcome more detail on how the suggested approach could contribute to more competitive and innovative markets and consumer welfare. We also ask whether the same results could not be achieved by adapting some of the existing competition law toolbox through the ongoing review or by exploring self-regulatory instruments; and whether experience from other sectors can provide examples of successful alternative approaches.

6. If the Commission pursues this new tool we underline the importance of imposing proper safeguards and due process, and would recommend to limits its application to areas where competition problems have been observed and there is a significant impact on the EU market. Furthermore, the relationship with Art.101 and 102 would need to be clarified.

The Single Market is still far from complete. In many aspects, the European Union is still a mosaic of 28 different national markets. This overview provides some examples of barriers that retailers and wholesalers face in the Single Market. We ask the Member States, the Commission and the European Parliament to address the barriers identified here. The best way for the retail and wholesale sector to provide jobs and growth is to create a business-friendly environment where there is full competition and consumers can enjoy a wide range of high quality and safe products.

The main problems that the retail and wholesale sector still faces are:

• Flawed implementation and application of the Services Directive that hinders the freedom of establishment, the free movement of services and the freedom to provide a service;
• National trade laws that hinder business in the way they do business. Often these laws hamper competitiveness of the sector, are protectionist and undermine business models that are genuine and legal business models in other Member States. Particularly concerning are developments in Central and Eastern Europe;
• National requirements that hinder the free movement of goods. Member States don’t notify new national technical requirements according to the procedure laid down in Directive (EU) 2015/1535, don’t apply the principle of mutual recognition in non-harmonised areas, gold-plate directives, etc.

We also recognise some of the initiatives taken by the Commission to solve some of the examples mentioned in this paper. However, infringement procedures take a long time, are expensive and the outcome is uncertain. For businesses, this takes too long and they might decide to leave or not enter a market. In the end this deprives consumers of more choice, higher service and lower prices.

EuroCommerce welcomes an open dialogue with the Commission, the European Parliament and the Member States to improve the Single Market for Retail. This document is regularly updated.

The previous update was done on 17 June 2020.

With this statement, BusinessEurope and the signatory European sectoral employers express the clear message to public authorities and trade unions at all levels that European employers are committed to make their best efforts to continually employ and create new job opportunities in Europe, highlighting at the same time their needs to be able to do so.

The EU, in common with the rest of the global economy, is presently experiencing the deepest recession since the Great Depression of the 1930’s. Whilst the situation remains very uncertain, the European Commission forecast is for the EU economy to fall by about 8.3% this year, far deeper than during the Global Financial crisis in 2009.

Europe’s response to the crisis has so far allowed to contain the employment and social impact of the crisis in a more effective way than has been the case in other world regions. Strong and autonomous social partners in Europe have been an asset for rapidly designing and implementing fairly balanced crisis-related solutions, including the role of collective bargaining.

In particular, BusinessEurope and the signatory European sectoral employers have engaged in a variety of initiatives and activities in the last months, with their respective trade union counterparts, aiming to inform the European response to the crisis based on their real time analysis of economic and social trends deriving from the Covid-19 crisis.

Concretely, two trends have coexisted in the last months:

1. On the cross-industry level, there has been a stronger than usual focus on tripartite arrangements between governments, employers and workers

This has proven to be part of Europe’s resilience capacity, demonstrating its unparalleled social dimension, in particular to mobilise or create adapted short-time working schemes.
Short-time working schemes has so far largely saved the EU from the dramatic unemployment increases seen elsewhere, notably in the US. But without strong policy support for businesses and workers, unemployment levels could rise significantly above the 9% level the European Commission has forecasted for the EU in 2020, and will not return quickly to the 7.9% figure they forecast for 2021.

A key priority for cooperation between the European Commission, the cross-industry social partners and national governments in the coming months is to ensure that short-time work schemes are well coordinated at European level and well-performing in all EU Member States, making good use of the European financial support that will be available for countries in need via SURE. At the same time, these schemes are and should remain temporary in nature. They should be lifted in a flexible manner, adapted to the progressive release of containment measures. The role played by national sectoral social partners in their application needs to be taken into account.

The objective going forward is to encourage companies to fully recover their capacities as quickly as possible, ensuring a safe return to work for workers. The recovery plan just agreed by the European Council is a bold first step, and given its financial weight, it has the potential to make a real difference to boost investment and job creation by competitive companies, protect jobs and reduce business closures.

We now need to ensure that it is going to invest the resources made available on important and essential employment-enhancing structural reforms for our countries to strengthen their long-term growth potential. The way ahead is to improve the agility of labour markets, avoiding too strict regulations which act as a barrier to job creation.
While access to liquidity remains a key concern for many companies across Europe, we need to progressively move from a focus on the very short-term survival to the crisis, to investing into the future success of Europe by improving and mobilising our innovation and growth potential.

The European semester will play a key role. We count on the Commission and Council to ensure that the money foreseen in the Next Generation EU recovery instrument is well spent. Resources disbursement should be linked to the implementation of country-specific structural reforms.

2. The effects of this crisis have been far reaching throughout the economy

Some sectors in particular have suffered more dramatic consequences, as an immediate consequence of the lockdown measures. Negative impacts are more diffuse or protracted in other sectors, notably due to the lack of free movement of workers, supply chain disruptions at global level and within Europe and the related actual or expected impacts on production capacity. A high number of social dialogue solutions and initiatives have been introduced at sectoral and company levels as a response to this crisis.

In this context, BusinessEurope and the participating European sectoral employers recall the importance of:

• a growth strategy including the green and digital transitions but not limited to these two crucial transitions.

• a strengthening of key industrial value chains and ecosystems, and for the designing and implementing of a strong single market reform agenda.

• a solution to be designed now to ensure an adequate functioning of free movement of workers in the case of a second wave of Covid-19 or in view of a future similar sanitary crisis. Due to lack of preparation, many mobile and cross-border workers were not able to perform their duties in the last months because of different border crossing restrictions imposed by Member States. The situation has improved recently. But Europe still needs to secure the availability of an appropriate contingency measure that can be applied quickly and effectively if and when a similar situation would occur in future.

• The rolling out of the European skills agenda in close connection to industrial policy objectives and initiatives, as is rightly highlighted in the Commission’s New Industrial Strategy for Europe of March 2020. The nature of skills needs has not been significantly altered by the pandemic, most notably the need to achieve better results in terms of STEM, digital skills, and innovation. This is and remains about promoting a skill set that allows all workers to be able to use the technology they need to master to design and sell new products and services, such as information and data literacy, communication and collaboration, digital content creation, safety, problem solving. However, during this crisis, it became evident that a stronger focus on e-learning is needed due to limitations for in-person training in a context of social distancing. Concrete solutions also need to be found for vocational education and training which requires a lot of on-site exercises and more traditional competences. Moreover, a broadly social partner led approach to employee training and dual learning will deliver more effective and efficient outcomes than a purely individualised support mechanism, such as a learning account. We also consider the sector skills blueprints as a good initiative. European cross-industry and sectoral employers look forward to engaging with the Commission and with their respective trade union counterparts to make the proposed Pact for Skills a successful undertaking serving the needs of enterprises and workers.

• A science-based approach underpinning a safe-return to the workplace of all workers that have either been teleworking or working less due to the crisis’s economic impacts. Employers are committed to act in accordance with their legal obligations and responsibilities, which needs to be embedded into pre-existing employers’ risk assessment approaches. Public authorities at all levels need to avoid creating excessive additional obligations for employers, or unclarity as regards the application of public health crisis-related measures at the workplace. Moreover, effective solutions are needed e.g. for health and safety protocols at work, in line with diverse national industrial relations practices.

The way in which the sanitary situation will evolve in the coming months is to a large extent beyond human control. However, our collective capacities, responsibility and intelligence can help limit the spread of a future virus more quickly in a future occurrence.

In this period of economic difficulties and uncertainty, we have a plea for policy-makers at all levels to limit to the minimum the cost and administrative impacts of the measures they currently contemplate and to postpone their initiatives’ timelines where needed.

To conclude, European employers are ready to play their part, by focusing on what they do best: the design, marketing, production and distribution of innovative products and the provision of services that can offer solutions to the challenges of the 21st century while attracting customers globally and in Europe, to be able to create good and sustainable jobs across our continent.

A decade ago, the European Sectoral Social Partners, EPSU, UNI EUROPA, ETUCE, HOSPEEM, CEMR, EFEE, EuroCommerce, CoESS identified third-party violence and harassment at the workplace as one of the key health and safety challenges to face within the European Economic Area and signed the Multi-sectoral guidelines to tackle third-party violence (TPV) and harassment related to work. In 2018, EUPAE and TUNED joined these organisations in their work to tackle this pressing issue.

Since then, we have seen a progressive increase of awareness and procedures available against harassment and violence as well as to widespread availability of data related to physical violence, sexual harassment, and bullying/harassment at workplaces.

With the Guidelines, the EU social partners supported the creation of a multi-sectoral level playing field, contributing to a result-oriented policy at workplaces, and where practical steps are set up and can be taken by employers, workers, and their representatives.

The signatories acknowledged that, although there are sectoral and organisational differences concerning third-party violence faced by workers in different occupational sectors and workplaces, the key common elements of good practice and steps to tackle it include a social partnership approach, precise definitions, prevention through risk assessment in consultation with workers and their representatives, awareness-raising, training, clear reporting and follow- up, and appropriate evaluation processes.

EuroCommerce Director-General Christian Verschueren commented on today’s publication of the European Commission “Action Plan to fight against tax evasion and to make taxation simple and easy”:

“After 27 years of the supposedly complete single market, a more harmonised taxation system remains one of its major pieces of unfinished business. It should be the easiest thing in the world to operate a company cross-border in Europe, but, on top of other barriers, a burdensome and fragmented tax bureaucracy makes this a real headache.  Many governments have recognised, in the current crisis, that easing tax obligations are vital to supporting and driving economic recovery. If this is true now, it is equally important to address these barriers and burdens on a permanent basis.”

Retailers and wholesalers were hit hard by the outbreak of the COVID-19 pandemic, with many stores being closed and companies not being able to pursue their business. Many governments have provided temporary relief from bureaucratic burdens, be it through simplifying or delaying reporting obligations, or allowing digital filing. EuroCommerce has presented proposals for this to continue after the crisis, to Make VAT and Excise Duties Greener, Fairer and Simpler, including facilitated VAT registration and rules on food and other donations.

The fight against tax fraud, including deliberate undervaluation of goods imported from third countries, needs to be a priority objective of EU tax policy, while avoiding overburdening honest companies with bureaucracy. With all member states having to finance support to industry and employees, stopping revenue leakage through fraud is important now more than ever. It is also vital that Member States ensure a smooth implementation of the VAT e-commerce package by 1 July 2021.

Finally, Verschueren commented on the importance and urgency of securing a global agreement on modernising corporate taxation in the digital age:

 “Retailers and wholesalers across all business models strongly support efforts to find a common mechanism for corporate taxation at global level. We call on all parties to commit to complete the OECD negotiations as soon as possible. The alternative of a patchwork of national digital taxes leading to escalating trade wars and protectionism is definitely not an attractive one.”

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