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Together with 11 trade associations, EuroCommerce states its concern about the European Data Protection Board’s latest guidelines on consent. In light of recent decisions of the French Conseil d’Etat on cookies – highlighting that the GDPR does not ban cookie walls – the signatories call on the EDPB to uphold the flexibility of the GDPR and not to recommend more stringent norms.

More details can be found in the letter.

Ecommerce Europe and EuroCommerce today jointly launched the European Ecommerce Regional Report 2020. Growth in ecommerce sales reached €636 billion in 2019, up by 14.2% from the previous year. European ecommerce turnover is forecast to grow at around 12.7% and to hit €717 billion in 2020. The full impact of the COVID-19 pandemic on the sector will, however, only show next year.

This report comes out at a time of uncertainty all over the world. The COVID-19 outbreak, and the restrictions it has led to, have had a major impact on business and consumer confidence. While physical shops have maintained supplies of essentials, ecommerce has played a crucial role in maintaining economic activity in Europe. Retailers of all sizes have accelerated their digital transformation, further developing existing and new omnichannel commerce solutions.

Luca Cassetti, Secretary General of Ecommerce Europe, commented: “We are very proud of the resilience our sector has shown these last months and are delighted to see that the ecommerce industry has been successfully contributing to keeping the Single Market open. While the COVID-19 pandemic has revealed the strength of the digital commerce sector, it has also exposed the challenges online merchants still come across. Given the increasing cross-border nature of ecommerce, European businesses have struggled to implement new solutions across the Union due to regulatory fragmentation and diverging national approaches towards the crisis. In light of the current acceleration of the digital and green policy agendas, we need to step up our ambitions for building a stronger European Union with a truly harmonized Single Market.”

Christian Verschueren, Director-General of EuroCommerce, commented: “The COVID-19 pandemic has accelerated the pace of digital change in retail and wholesale. This trend will continue, and to gather further speed. People are now used to buying online, and will continue to do so. Our members are responding to this, but with difficult months - and probably years - ahead, we need urgent help nationally and at EU level to boost resilience and accelerate our sector’s digital transformation.”

The Ecommerce Regional Report 2020 sets out the main facts and figures related to the ecommerce sector in Europe, with country-by-country and sectorial analysis, interviews with heads of leading national ecommerce associations and other valuable information for merchants, policymakers and other stakeholders. Ecommerce Europe and EuroCommerce would like to thank the research institute RetailX for preparing and finalising this report and all the sponsors for their support.

To obtain the full version of the report, please visit this website.

NOTES FOR EDITORS

The 2020 report shows that Western Europe is still the most developed ecommerce market in Europe with 70% market share of the total B2C online turnover and the highest number of e-shoppers (83%), followed by Southern Europe with a 15% market share of the total B2C online turnover and the highest e-GDP (7.69%). Northern Europe (7%), Central Europe (6%) and Eastern Europe (1%) have the lowest market shares.

Other key trends identified in the report show that in 2019, the top three countries showing the most significant B2C ecommerce turnover growth were Romania (30%), Bulgaria (30%) and Spain (29%). Belgium (7%), Ireland (7%), Austria (4%) and Iceland (3%) showed the least growth in ecommerce turnover in the last year. Furthermore, the findings show that the country with the highest percentage of eshoppers (94%) in 2019 is the United Kingdom, followed by Denmark (86%) and Germany, The Netherlands and Sweden (all at 84%). The lowest percentages for online shopping were registered in 2019 in Bulgaria (31%) and Romania (29%). In terms of national and cross-border purchases, shoppers in The Netherlands (95%) and Poland (94%) mostly bought from national sellers, while Maltese (96%) and Cypriot (95%) e-shoppers are most likely to order cross-border (both from within the EU and non-EU).

Finally, the report includes interviews with leading national ecommerce associations, providing qualitative insights into the national ecommerce markets.

EuroCommerce thanks the Commission for the opportunity to contribute to the roadmap on the pharmaceutical strategy. EuroCommerce represents retailers and wholesalers in Europe. This contribution reflects the views of our full line pharmaceutical wholesale members.
EuroCommerce supports the broad objectives that the Commission puts forward with the strategy. The Covid 19 crisis has demonstrated the importance of ensuring universal health coverage and access to safe, consistent quality and affordable medicines for patients across Europe. Full line pharmaceutical wholesalers play a key role in the pharmaceutical eco-system and their role needs to be fully reflected when developing the strategy.
This paper focuses particularly on the role of full line pharmaceutical wholesalers and their role in the chain and the need for a resilient and well-functioning pharmaceutical eco-system to serve the needs of patients across Europe.

Full-line wholesalers play a key role in the pharmaceutical eco-system

Pharmaceutical wholesalers represent a vital link in the pharmaceutical eco-system, acting as a “one stop shop” for pharmaceutical products thanks to:

• Their sophisticated delivery systems covering the territory of all member states ensure that patients have access to vital medicines within hours of orders;
• Their negotiating power to ensure that patients have access to affordable medicines.
• Their contribution to the functioning and resilience of the pharmaceutical eco-system needs to be taken fully into account when designing and executing a pharmaceuticals strategy for Europe.

Pharmaceutical wholesalers employ 140,000 people and distribute 15 billion orders of medicines and a wide range of healthcare products in Europe every year. They provide facilities for the purchase and sale, warehousing, storage, and rapid order preparation and delivery of medicines. These wholesalers carry and distribute the full assortment of products to meet the needs of their customers and to deliver their medicines where and when they are needed. This ensures that patients’ needs are provided for efficiently and in real time. Similarly, manufacturers benefit from this timely, safe and reliable service to get their products to the patients who need them. In most countries, distribution of medicines is part of a public service function, largely performed by full-line wholesalers, and in some are subject to formal Public Service Obligations covering wholesalers and pharmacists. In this way, even in the most remote areas, patients can have access to the most vital medicines in a timeline manner. Classic full-line wholesalers earn a small percentage of the price of the medicines supplied. Delivering a full range of medicines allows for some cross-subsidiation, so that less expensive medicines, which carry a low margin, can be supplied at exactly the same quality and speed as expensive medicines.

Pharmaceutical wholesalers play an important role in ensuring patients have access to affordable medicines. They can use their negotiating power, volumes and assurance to manufacturers of efficient and timely delivery to promote competition on price and service levels to the benefit of patients.

Resilience during the COVID-19 crisis

The health crisis has hit European economies hard. In all member states, pharmacies, doctors and hospitals have been confronted with unprecedented levels of demand from patients. Full-service healthcare distributors were able to respond to the immense number of orders (some 2 to 3 times normal levels) in a timely manner through redoubling their efforts to ensure that confidence in the supply chain could be maintained.
The COVID-19 crisis has shown to policy makers and the general public the complexity of the supply chain. It has highlighted, sometimes through temporary shortages caused by bottlenecks or export bans in third countries, the global nature of manufacturing and product sourcing. It also underlined the importance of a well-functioning single market and the impact of public tendering practice on ensuring timely access to safe, quality and affordable medicine across Europe. Pharmaceutical wholesalers are part of the solution and are keen to see increased impetus for cooperation with other key stakeholders.

The crisis has also had a massive impact on pharmaceutical wholesalers’ margins. Wholesalers have worked hard to maintain continuity of supply against the background of extraordinary levels of demand. Any benefit of increased sales has been offset by higher costs due to disrupted supply chains, the need for additional staff and deliveries at short notice, and the measures to ensure safety of staff and customers. Pharmaceutical wholesalers have high fixed costs, and operate with low margins and regulated prices. The sustainability of their business model, and their margins, are under immense pressure.

Addressing shortages

The crisis highlighted the importance of the Single Market as a central driver of recovery. A recent study for the European Parliament estimated a potential economic gain of a properly-functioning Single Market of up to €713bn.

The free circulation of products is key to the resilience of the pharmaceutical eco-system, ensuring access to medicines across the European market and allowing a rapid and flexible response to shocks in supply or demand.
Export bans and trade restrictions are not an appropriate response to shortages of medicines, hit SMEs particularly hard and risk worsening the very situation which governments are seeking to solve:

• the accessibility of medicines across the world is linked to global manufacturing and product sourcing. These are complex supply chains, that can be easily disrupted, by e.g. availability of raw materials and active pharmaceutical ingredients, location of manufacturing sites and the need to ensure diversification of sourcing, pressure on cost management or external events disrupting the supply chain;
• a number of factors can cause medicines to become scarce or unavailable in a country, including market dynamics (e.g. low prices, low volumes, change in demand or manufacturers imposing quotas to gain better control of the supply of medicines in a given market) and regulatory and other issues (e.g. new regulation impacting costs, the availability of substitutes, licence withdrawal or export bans);
• governments’ tendering practices can have unintended consequences: where, for example, a tender gives the winning manufacturer the exclusive right to supply a specific medicine or category of medicines, the absence of alternative suppliers will cause shortages if the exclusive manufacturer suffers sudden production disruptions.

Parallel trading plays a key role in ensuring access to affordable medicines, by fostering competition and counteracting any producer and patent holder strategies to demand excessive prices in one territory. Parallel distributors find excess stocks in one country and offer them at a lower price in another. This creates competition and leads to significant savings. Parallel trade is not a significant cause of supply chain disruption and, by facilitating circulation of medicines, contributes to meeting shortages in one country by moving supplies from another.

We would further suggest the Commission to consider seeking to strengthen the WTO Pharmaceutical Agreement which was established in 1994 by a number of countries, including the EU. These countries cut tariffs on pharmaceutical products and chemical intermediates used for their production (the "zero-for-zero initiative"), including all active ingredients with a WHO International Non-proprietary Name (INN). The EU could consider, as part of the initiative, the possibility to call non-participating countries to join the WTO Pharmaceutical Zero-for-Zero Initiative and extend it to all pharmaceutical and medical goods.

Conclusion

On the basis on these points, we ask the Commission to take full account, when considering its pharmaceuticals strategy, of the role of full line pharmaceutical wholesalers as a central part of the supply chain, both in ensuring timely access to safe and affordable quality medicine to patients in Europe and in strengthening the resilience of the pharmaceutical ecosystem. We further ask the Commission to fully recognise the importance of a well-functioning single market and diversification of sourcing as key to the future of the ecosystem and the reliable and affordable supply of medicines across Europe, and to shape subsequent action to reflect and support this vital role.

EuroCommerce Director-General Christian Verschueren today welcomed the official launch of the new European Payment Initiative (EPI) consortium, to create a new unified payment scheme and solution, allow them to process instant or mobile payments, and set an alternative by-pass the major non-European card schemes.

“A new, fully European, payment scheme, independent of Visa and Mastercard, has been needed for many years in order to provide real competition. This is increasingly important now that merchants are seeing further increases in costs which are not regulated and by the reluctance of the Commission to expand the scope of the current Interchange Fee Regulation to address them. This initiative is therefore most welcome. However, at least four previous initiatives have all failed; this one will as well, if merchants, who are key to its success, are not full participants in the final solution being proposed.”

From a retail point of view, there are still significant areas of outstanding concern:

Customer journey. A seamless and simple user payment experience within physical stores, and in e&m-commerce, and supported by strong customer authentication (SCA), is deemed a critical merchant requirement.

Business case. We are unaware of the business model that the banks will adopt and whether there is a robust enough and transparent business case within it for merchants or to bring added value to their customers.

Governance. Is still a major concern. We don’t know what the final proposed governance structure will be and to what extent retailers will be represented or have a voice on the governance board.

Features & functionality. We still don’t have a clear idea of what the full scope of the EPI project will be, or the exact features their proposed new payment method will have or how it intends to embrace the benefits offered by Open Banking. For example, will it include payment reversals, notification of payment execution, dispute mechanisms, etc., from the outset?

Bank participation. In order for any proposal to be widely adopted throughout Europe, all banks need to participate; we consider pan-European reachability as critical to the success of the scheme.

Regulatory oversight. Regulators need to take active interest and be prepared to step in and take pro-active measures to address any issues or differences that may arise.

With the proper engagement of retailers and other users, this initiative creates a unique opportunity for real collaboration, for introducing effective competition into the payments arena and disrupting the current dominance of the two major schemes. This will, in turn, help ensure a seamless customer journey with benefits to all parties and substantially reduce the high cost of payments that our members and customers ultimately have to bear.

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Welcoming the updated EU Skills Agenda for Europe published today, EuroCommerce Director-General Christian Verschueren said:

“In our joint statement with our social partner UNI Europa at the height of the COVID crisis, we paid tribute to the millions of people working in our sector and called on national and EU authorities provide financial support in helping our workforce to up- and reskill. We will be looking to the Next Generation EU Recovery Fund, to help the retail and wholesale ecosystem in accelerating its digital and sustainability transformation and bolster its resilience in the face of the damage sustained during the crisis. One in seven Europeans works in retail or wholesale. We will need the European Social Fund and European Globalisation Adjustment Fund to be focused on helping our workforce in weathering these challenges.”

The lockdown due to the pandemic has accelerated and consolidated the shift to online sales. Employees now need to master digital systems and tools, and, in order to attract customers back into stores, to hone their interpersonal skills and the ability to offer informed advice.

Verschueren continues: “People must be equipped with the skills needed to take on new roles due to digitalisation, and to interact with new systems using blockchain and artificial intelligence. But they need also to enhancing their soft skills; retail and wholesale will remain a people’s business. So, it is about combining high tech and high touch.”

Our sector employs 29 million Europeans. Retailers and wholesalers are leaders in innovative Vocational Education Training (VET), for example, apprenticeships for retail professions are ranked first and second for young people in Germanyin popularity among all schemes across industry.  Employees in the sector are already trained in core employability skills. At company level, training programs have been tailored to the needs of employees and are teaching basic digital skills essential to their future employability.

Bipartite training funds are often part of collective agreements. The e-commerce merchant apprenticeships and related follow-on professional qualification adopted by Austrian and German social partners in retail and wholesale, are a prime example of social partner-induced innovation to meet the growing skills needs of employers in retail and wholesale.  Ongoing experiments in the Dutch retail sector with individual learning accounts in sectoral and company collective agreements, are another example of how these challenges can be met.

Yet, our sector faces skills gaps in many member states. National education and training systems urgently need updating to create curricula and qualifications to meet the needs of employers, and to give young people the best chance of getting a rewarding job. Private sector initiatives by retailers and wholesalers will continue to take up their role in meeting this challenge, but this will not be enough. Co-financing by the ESF+, especially for SMEs, will be vital for offering training for as many people as possible.In allocating EU funding from ESF+ to national programs, EU and national policy-makers should work with retailers and wholesalers to leverage the success of these private sector schemes to ensure that our employees obtain the right skills at the right time.

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EuroCommerce welcomes the opportunity to provide input to the roadmap consultations on an ex ante platform instrument and a possible new competition tool. Both areas are of high importance to the future and competitiveness of the retail and wholesale sector in an increasingly digital environment.

The Commission’s communication accompanying their proposal for a recovery package recognises that the retail and wholesale ecosystem has been hit particularly hard by the COVID-19 crisis. Confinement measures have significantly accelerated the move to online shopping and digitalisation, both for food and non-food products. Digitalisation has increased competitive pressure in our sector and the COVID-19 crisis has required immediate and substantial investment by retailers and wholesalers to meet unprecedented levels of demand or continue to serve customers. The crisis also illustrated that European retailers are exposed to competition from operators established outside the EU and selling direct to European consumers.

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 must 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.

EuroCommerce welcomes the opportunity to provide input to the roadmap consultation on ‘deepening the Internal Market and clarifying responsibilities for digital services.’ Digital services have become an essential part of the retail and wholesale landscape: online sales have been growing faster than total retail sales in the past years but is still in most countries below 10% of total retail sales; with the Covid 19 crisis, many consumers have switched to on-line and are expected to continue to do in the future. Retailers and wholesalers are also exploring new opportunities arising from the digital economy to offer consumers affordable services.

The Commission’s communication accompanying its proposal for a recovery package recognises that the retail and wholesale ecosystem has been hit particularly hard by the COVID-19 crisis. Confinement measures have significantly accelerated the move to online shopping and digitalisation, both for food and non-food products. Food retail businesses faced unprecedented demand online and many non-food businesses experienced a sharp decline in their offline sales which an increase in online sales only partially compensated. The sector invested substantially to ensure the safety of customers, employees, the deployment of new e-commerce capabilities and the reopening of their stores.

To remain competitive, retailers and wholesalers need a regulatory EU framework that supports strong European retail and wholesale ecosystems in digital and physical environments and gives them legal certainty and incentives to invest in robust omnichannel strategies. We need a true Omnichannel Single Market, seamlessly integrating the online and offline environment.
This contribution sets out a description of the impact of digitalisation on retail and wholesale, and preliminary views on the proposed options in the inception impact assessment on ‘Deepening the Internal Market and clarifying responsibilities for digital services’.
Note that we envisage that some of the problems we have identified cannot only be dealt with in the context of the Digital Services Act package, but may require further review or amendments of other EU law and initiatives.

EuroCommerce Director-General Christian Verschueren today expressed regret and disappointment that the Commission’s report on the functioning of the Interchange Fee Regulation did not take account of the mounting evidence of massive rises in card fees not covered by EU regulation:

“Nearly 80% of card transactions in Europe are handled by two American companies with global reach. Merchants in retail and wholesale, as well as in hospitality, tourism, and air travel, who have already been hit commercially by COVID-19, have seen these companies raise fees not covered by the Interchange Fee Regulation by some 50%. Over the last 18 months alone this has taken an additional €800 million out of the pockets of merchants, and ultimately consumers. This allows these card schemes to consolidate their position by making competing schemes less attractive to banks. We note that the Commission will continue to monitor the situation and hold a stakeholder meeting at the end of the year. We call upon the Commission to act on the basis of this new evidence, and not wait for even more economic damage to be caused by these two card schemes using their market power to extract further duopoly profits from consumers”.

We have submitted evidence from independent antitrust and payments consultants Zephyre and CMSPi, showing that card schemes have, since the Commission’s consultants EY stopped gathering data in 2018, raised their fees not covered by the IFR by some 50% - one scheme even raising fees by 150%. We want to see more competition in payments through innovation and proposals under the European Payments Initiative.  But as we have seen in other industries, unregulated powerful incumbents can neutralise competitors if regulators do not act. We have already seen four European initiatives offering alternatives to major card schemes fail. This could happen again if no action is taken now. 

EuroCommerce has already brought a series of complaints against the card schemes over the last twenty years, which led to the Interchange Fee Regulation among various other actions. We are heavily reliant on the Commission to legislate as they have told us other avenues for complaint are not open to us. In particular, we believe it imperative that the Commission looks to act to introduce:

- Regulation of the total fees charged to payment card acquirers and which are, in turn, passed through to merchants and ultimately their customers;
- Removal of all substantive exemptions in the Regulation so as to cover commercial cards, three-party card schemes, cash withdrawals at ATMs, inter-regional cards, and virtual card transactions;
- Independent acquiring of three-party card schemes;
- Mandatory minimum interchange fees for cash withdrawals and deposits at ATMs in order to maintain consumer choice and cash alternatives and
- Strong and dissuasive penalties for non-compliance with the regulation.

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Commenting today on the publication of the Commission’s report on the functioning of the General Data Protection Regulation (GDPR) EuroCommerce Director-General Christian Verschueren said:

“The GDPR is a major EU achievement and a valuable contribution to assuring European citizens that their personal data is being protected and properly used. This is particularly important as we see the digital transformation accelerating.  We therefore see no need, only two years after the GDPR came into force, to change it. However, we want to see the Regulation better enforced, and support the Commission in calling for adequate resources for national authorities, and more consistent application of the rules. We also call for more transparency and better involvement of stakeholders in the work of the European Data Protection Board (EDPB) in preparing guidelines consistent with the regulation and important to its proper implementation.”

Our sector strongly supports the vital role of the GDPR in protecting personal data and building consumer trust.  We also welcome the significant influence it has had in setting a global benchmark for data protection. The COVID-19 crisis and the need to trace infectious contacts effectively has underlined the need for data protection to be applied consistently across Europe, based on common understanding of the rules. Since the GDPR entered into force two years ago, companies have devoted significant resources to ensuring their compliance with the regulation. We therefore have a real stake in it working properly and achieving its objectives.  In response to the Commission report and in line with suggestions we have shared with the Commission and the EPDB, therefore we are keen to see action to ensure:

- Better enforcement: We have seen a tendency to look at creating new rules rather than enforcing the existing ones. This is important in making best use of the GDPR, creating legal certainty and avoiding overlaps or conflicting legislation.

- Time to fulfil its potential: rather than rush to add to the GDPR, it is important to let the regulation bed in and national data protection authorities and the Commission have time to use it effectively.

- Harmonised interpretation of the GDPR’s provisions: The EBPB plays an important coordinating role, but we increasingly see divergence between member states’  interpretation of the GDPR in practice, and in some cases contradictory guidelines that make compliance a headache, leaving companies and consumers uncertain on how to act. This needs closer coordination between national authorities and more harmonised and consistent application of the rules.

- Guidelines consistent with the provisions of the GDPR:  in a number of cases, guidelines have gone beyond what the GDPR provides for, leaving our members uncertain of whether they are acting legally in applying them. To avoid this uncertainty, the EDPB should take account of practical examples provided by business when writing their guidelines.

- More transparency and stakeholder involvement: In drawing up guidelines, the EPDB is creating a form of implementing legislation similar to rules elaborated by EU agencies under other legislative acts. Yet the consultation process is often unsatisfactory, the processes and decisions of the EDPB lacking transparency and providing too few opportunities for stakeholders to understand the processes and contribute to more effective guidelines. In line with better regulation principles we would ask for this to change, for their very restricted workshops to be advertised and open to more stakeholders, and for the minutes of EDPB’s plenary sessions to be published.

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Speaking today, EuroCommerce Director-General warned of the consequences of the decision by the European Banking Authority (EBA) and Commission to maintain mandatory Strong Customer Authentication (SCA) by December 2020:

“The recent decision not to allow any further extension of the deadline for the mandatory introduction of SCA may mean a lot of customers finding their transactions declined and merchants losing the sale. We appreciate that the Commission and the EBA had already extended the initial deadline. But, because of the COVID crisis, many merchants, particularly small-and-medium-sized enterprises have not had the time to install and thoroughly test all the systems needed to ensure SCA will work smoothly by the December deadline.  At a time when our sector and others such as hospitality and travel have been badly hit by the economic consequences of the crisis, and many organisations facing bankruptcy, this decision goes in the opposite direction to the Commission’s very welcome efforts to encourage consumption and aid the EU’s recovery.”

At present, only 20% of online transactions go through with SCA. To move towards 100% without any glitches in the next six months is quite a challenge. CMSPI, an independent global payments consultancy group, estimates that this decision could cost merchants €90 billion in lost sales if mandatory SCA is launched without being optimised. This risk is very real,  and the UK Financial Conduct Authority has recognised this and extended the deadline to September 2021.

Retailers remain committed to delivering the right solutions for the EU economy and share the priority of all players of tackling fraudulent transactions. 

Most retailers will need to have SCA thoroughly tested and successfully deployed by mid-October in advance of any system freezes and the start of peak trading over the Christmas period, upon which, given the massive impact of the COVID crisis, their future survival may depend.

Many merchants have been actively testing the systems needed to allow for SCA, and are still encountering a large number of problems resulting in very high abandonment rates of e-commerce transactions where these should have gone through without difficulty. The COVID crisis has diverted management attention away from resolving these problems , and presents real challenges to our sector and travel & hospitality, the two ecosystems identified by the Commission as worst hit by the crisis. 

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