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eBay Urges Rethink On EU Plan's "Brick and Mortar" Vendor Requirement

mernil writes with this snippet from Reuters: "According to a draft regulation drawn up by the European Commission and seen by Reuters, suppliers may be allowed to require that distributors have a 'brick-and-mortar' shop before they can sell online. The proposed rules would replace existing guidelines exempting companies from strict EU competition rules under certain circumstances. Those rules expire at the end of May."

31 of 139 comments (clear)

  1. No words by sopssa · · Score: 5, Insightful

    Living in a EU country and while lately I've been happy with EU's decisions, this is just bullshit. Not just because of eBay, but because there are several online stores in my country too that only have a website and warehouse. This includes the online stores that sell at lower price than you can find in stores and specialized stores like funny items and hot spices, hot sauces and specialized stores that import oversears and sell here.

    Some of the items you can't just on normal stores. This is bullshit.

    1. Re:No words by flyneye · · Score: 2, Interesting

      I can't imagine what they want that provision for, unless, somehow it makes collecting taxes easier. Then it's just plain laziness.
      If its pressure from brick and mortar stores, then it's unfair competition. Any insights as to this backward reasoning?

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    2. Re:No words by houghi · · Score: 2, Insightful

      They have a warehouse, so they can easily make a brick and mortar one out of it. Nobody says it has to be cheaper or easy accesible or even customer friendly. Just make a store the size of a phone booth and explain clearly that it will be more expensive if they buy stuff there and the service will be lousy.

      --
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    3. Re:No words by qnetter · · Score: 2, Insightful

      Did you READ the story? The proposed law does not allow GOVERNMENTS to restrict sales to online retailers that have brick-and-mortar shops. It allows SUPPLIERS to allow their goods to be sold only by online retailers who have brick-and-mortar stores.

      Since suppliers should be free to control who sells their products in any way they choose that does not violate protected-class laws, they should be free to do so. Hell, they should be free to allow their products only to be sold by companies whose names start with an S, or stores on the odd-numbered side of the street.

    4. Re:No words by rtb61 · · Score: 2, Interesting

      Statistics can lie, the better economic indicator is the minimum wage, and what percentage of the population earn the minimum wage and whether that minimum wage is actually liveable, paying for food, clothing, buying accommodation and of course health. Pointless looking at the median income if the majority of people in point of fact actually earn considerably less than that, I know it is their fault for not being born in a family where nepotism ensure earning many many multiples of the average salary.

      Remember producing a functioning healthy and happy society is not about ensuring that the minority can exploit the majority, it is about ensuring that the exploitative minority are isolated from the rest of society in rehabilitative institutions, whilst the rest of society to works together on creating healthy and happy communities.

      When it comes to wages, look at the minimum wage, the number of annual leave holiday days, public holidays, number of paid sick days, the number of long service holiday days, overtime penalty and of course health care provisions. All that added together defines the actual true wage conditions and it behoves a modern controlled social capitalist society to control and enforce reasonable of employment as well as to protect them from external subversion.

      --
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  2. WTF by Jaysyn · · Score: 5, Informative

    This is one of the dumbest ideas I've heard out of a politico in a long, long time.

    --
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    1. Re:WTF by twrake · · Score: 2, Insightful

      Just wait a dumber one is on the way!

  3. Luxury Brands? by odin84gk · · Score: 3, Interesting

    From the article

    Brand owners - often in the high-end or luxury segment - say the provision is necessary to stop so-called free riders, competitors who benefit from promotions carried out by brand name companies, shifting stock online on the back of advertising of a brand's products and services.

    Because "free riders" do not have to pay for the costs of a shop and related overheads, they can frequently offer brand-name products over the Internet at discounted prices.

    "The purpose of a brick-and-mortar shop provision is to help retailers invest in luxury shops," said Antoine Winkler, a partner at law firm Cleary Gottlieb Steen & Hamilton who represents several brand name companies.

    I'm slightly confused. Are they doing this to help the brick-and-mortar stores? Are they doing this to help the brands? I'm confused. It sounds like they are trying to take down low-overhead companies because they are too efficient. Does anyone know why this would be a good idea?

    1. Re:Luxury Brands? by Danse · · Score: 2, Insightful

      From the article

      Brand owners - often in the high-end or luxury segment - say the provision is necessary to stop so-called free riders, competitors who benefit from promotions carried out by brand name companies, shifting stock online on the back of advertising of a brand's products and services.

      Because "free riders" do not have to pay for the costs of a shop and related overheads, they can frequently offer brand-name products over the Internet at discounted prices.

      "The purpose of a brick-and-mortar shop provision is to help retailers invest in luxury shops," said Antoine Winkler, a partner at law firm Cleary Gottlieb Steen & Hamilton who represents several brand name companies.

      I'm slightly confused. Are they doing this to help the brick-and-mortar stores? Are they doing this to help the brands? I'm confused. It sounds like they are trying to take down low-overhead companies because they are too efficient. Does anyone know why this would be a good idea?

      I don't know either. Is the next move to mandate that companies selling "luxury" brands must locate their store in a high-rent part of town too? I mean it just can't be fair if they set up a shop in the bad part of town and pay a fraction of the rent that the luxury stores pay, right? I'm not sure where this madness would end...

      --
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    2. Re:Luxury Brands? by Hatta · · Score: 2, Insightful

      What's to stop Mom and Pop from starting a website instead? There's a difference between being unable to compete, and being unwilling to compete.

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    3. Re:Luxury Brands? by compro01 · · Score: 4, Insightful

      If you owned a mom-and-pop store, I think that you would see it as a good idea.

      And if you owned a mom-and-pop online store, I think you would see it as a horrible idea.

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    4. Re:Luxury Brands? by should_be_linear · · Score: 3, Insightful

      As a EU citizen, I expect Commission will soon figure they did something _really_ stupid _again_. Therefore, next provision will enable *SOME* shops (enumerated in 1200 pages book) to remain online-only. For enumerating all privileged online shops and nagotieting per-member country number, European Online Retail Agency will be established (EORA) in, say, Rome, with huge building and army of translators and other staff.

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    5. Re:Luxury Brands? by Anonymous Coward · · Score: 2, Insightful

      The EU is not requiring that there is a brick-and-mortar store. The luxury brands themselves are doing. It's just that the EU used to prohibit them from discriminating against online retailers. Now they are letting luxury brands make that choice if they feel like it's worth it for their brand image. I don't see why there's such an uproar on slashdot.

    6. Re:Luxury Brands? by Grishnakh · · Score: 2, Insightful

      Your post really doesn't make much sense.

      Random website on the internet competing with megacorps on the internet

      versus

      Random shop down the street competing with megacorps 5 miles away.

      Existing physical presence is invaluable when you're small. It's usually not worth it to buy a physical shop if you don't already have one, but if you already exist, keeping your physical shop open is vital.

      Starting a website instead is a terrible idea.
      You could surf the internet for years without coming across their site.
      Existing customers can't drive around town without seeing their physical shop.

      A physical shop doesn't make any sense if you have a niche market. I was just looking at a website yesterday that appears to be run by one guy, and he sells parts and supplies to refurbish vintage arcade machines, or to build custom arcade machines. What kind of moron thinks this guy would stay in business one month if he had to buy commercial storefront space and signage? No one "driving by" is going to care about vintage arcade machines, no matter how great his location is, but on the internet, I'm sure he's able to find thousands of customers across the world who buy his parts.

      As for "surfing for years without coming across their site", that's why Google was invented. I find small businesses on the web all the time with simple Google searches, or by clicking on Google ads.

      The key, however, is what you're selling. If you're stupid enough to try to compete directly with Wal-Mart on name-brand stuff made in China, you're going to lose. You can't cut your margins thin enough to survive as a small operation on products like that, with so much competition out there from established retailers. The only way small mom-n-pop online businesses survive is by finding niche markets, such as spare parts for vacuum cleaners or somesuch, or custom-made products that can't be found anywhere else.

  4. not the end of the world by circletimessquare · · Score: 5, Funny

    of course its anticompetitive bullshit, i guess department stores are adapting music industry tactics, complete with buying off legislators

    but it would be pretty neat to have an "eBay" showroom

    ebay could pick the wackiest shit: jesus on toast, my 7 year old's baby teeth, this obscene and bizarre plastic thing i bought in bangkok 3 years ago, etc., and put it on prominent display, like million dollar art work. purposefully play off a contrived vibe of reverence and awe, for really crappy mundane shit. it could be funny

    then you can only buy certain stuff at say, 11 am sharp

    and during checkout, if the guy behind you gives the clerk 10 cents more than your price while you are still reaching for your cash, he gets it instead

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
    1. Re:not the end of the world by Amouth · · Score: 2, Funny

      ok that actualy sounds like it would be fun to spend a morning at...

      --
      '...if only "Jumping to a Conclusion" was an event in the Olympics.'
  5. But imagine by jgtg32a · · Score: 3, Interesting

    Going to the Newegg store, where it's a warehouse with a couple of cashiers in the front. The employees aren't there to help you they are there to get stuff to shipping. I'd wander around there for hours.

    1. Re:But imagine by ArhcAngel · · Score: 2, Informative

      Actually it would be more like Directron Their multi-acre warehouse in Houston, Texas has a small store in the front full of PC cases of every conceivable design and off-lease equipment. They also have several kiosks where you can sit down to browse their web site and order what you want. Once you order you walk over to the Will call kiosk and type in your order number to tell them you are there to pick up the merchandise. A few minutes later someone will come out from the warehouse with your stuff and process your order. It was hilarious before they moved to the bigger warehouse because the store was only big enough to fit 3 people before you couldn't open the front door. I can see it now. People opening up "storefronts" in a Public Storage space for a couple of minutes a day to get around a law like this.

      --
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  6. Don't let the States hear about this by Overzeetop · · Score: 2, Insightful

    People have been ducking sales tax in the US by buying online because you generally have to have a physical presence in a state to be required to remit sales tax. I say people, and not businesses/web vendors, since most states have a "use tax" which applies to anything purchased out of state and used within the state, and very few people ever pay the use tax since there is no reporting.

    --
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    1. Re:Don't let the States hear about this by P-Nuts · · Score: 2, Informative

      But that's because sales tax is really complicated in the USA. In the EU there's only VAT (the rates vary between the countries, but it's one tax at one rate within each country). You can't get out of paying it just by buying online.

    2. Re:Don't let the States hear about this by TooMuchToDo · · Score: 2, Insightful

      People have been ducking sales tax in the US by buying online because you generally have to have a physical presence in a state to be required to remit sales tax. I say people, and not businesses/web vendors, since most states have a "use tax" which applies to anything purchased out of state and used within the state, and very few people ever pay the use tax since there is no reporting.

      Bullshit. Flat out bullshit. If I buy something at a brick and mortar store, yes, sales tax should apply because infrastructure is used (local roads, fire, police, etc) for the store. But if I buy something online, sales tax *shouldn't* apply if that infrastructure isn't used (interstate roads are paid by tolls or fuel taxes, not sales taxes). If sales tax means stores can't compete, so be it.

    3. Re:Don't let the States hear about this by davester666 · · Score: 2, Interesting

      unless you are licensing something purely digital, that's not really true.

      If you are buying a physical 'good', presumably it still actually needs to be transported to where you physically are.

      I supposed if they have a large enough trebuchet, they could get around using roads...

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    4. Re:Don't let the States hear about this by Grimbleton · · Score: 2, Informative

      From: http://www.nyc.gov/html/dof/html/business/business_tax_nys_sales.shtml

      City sales tax is imposed on the purchase of clothing and footwear costing $110 or more per item or pair as of August 1, 2009.

      And not precisely what I said about vehicle purchase, but vehicle related: "On Item 10 above, the City imposes a 6 percent tax and an additional 8 percent surtax (on parking, garaging, or storing motor vehicles in Manhattan)."

      I imagine you can find more on your own, using such Google terms as " Vehicle Sales Tax Rate"

    5. Re:Don't let the States hear about this by __aajfby9338 · · Score: 2, Funny

      We have that little annoying thing here called "The Freedom of Speach

      We also have this really cool thing called spelling.

  7. EU arrogance ? by BlueTrin · · Score: 2, Insightful

    I am living in the EU, and I think the EU should maybe start by having a real government before to be so quick on judging on other matters, it feels much like the EU is a group of country trying to chase their lost empire in the 19th century or so ...

    The EU government seems to think that they are the most important in the world while neither China or the US care about them as Obama showed recently.

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  8. Webspace providers, discussion boards by noidentity · · Score: 2, Funny

    This'll be great for webspace providers and discussion boards like Slashdot. I'd love to go to a brick and mortar store for these things. They could have them hanging like gift cards. "Yes, two websites please, a first post, three replies, and two +1 Funny moderations please. How much?"... "Yeah, paper is fine."

  9. Re:Easy to fulfil by oakgrove · · Score: 2, Insightful

    You just ran a significant percentage of the people this law is already aimed at straight out of business. Many people that sell online do it in their spare time often because they just enjoy it. Not a whole lot of money is made. Certainly not enough to pay rent even in the dinkiest hole in the wall and actually pay somebody to stand around in it all day.

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  10. but don't forget by circletimessquare · · Score: 4, Funny

    security guards would not allow you to leave the eBay showroom until you shout "A++++ WOULD BUY FROM AGAIN!!!"

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  11. Unfortunately this has been going on a while now.. by beset · · Score: 5, Informative

    I work in eCommerce, in particular the high end AV and home electricals' market. "Premium" brands have been penalising eCommerce only ventures for a number of years now. It can be as simple as giving traditional retailers better retro (% of turn over paid back once a year) and has harsh as limited stock. The same goes on in online photography. To be clear, we're not an online only brand, we have a number of high street stores with decent turnover. Now, the manufacturers are getting even tougher. The amount of premium brands we've had to take off our website in the past 6 months to keep our decent terms for the traditional is shocking. These weren't small accounts either, they run into 7 figures of the UKs finest GBP. Why? The brands think by selling online you're selling on price (which is largely true thanks to sites like pricegrabber, pricerunner, kelkoo etc) and this devalues their brand. How they control the market is nothing short of cartel like, but it's not going to change, only get worse if this law comes into effect. FWIW, even as someone who is struggling to do online business thanks to these they do have a point. Pure, price comparison based online shopping will eventually leave us with very few trained product experts or the ability to see products in the "flesh" before buying online. A balance needs to be found.

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  12. Turnabout is fair play by noidentity · · Score: 4, Interesting

    I like this requirement. I think they should also require that all brick-and-mortar stores have an online store that sells everything they have in the brick-and-mortar store, and always be up to date.

  13. Re:Unfortunately this has been going on a while no by beset · · Score: 2, Interesting

    I guess you've never worked in retail, nor understand quite how retail works.

    Do you not sell on price alone. If this were the case the world would be full of geeks running e-stores out of bedrooms which allow for the lowest overheads thus the smallest margin.

    Customers (outside of /. (they do exist)) generally want advice, the unwashed masses aren't supergeeks like we are. Bricks and Mortar stores allow customers to compare ranges of products in the flesh and speak to a real person who has likely had years of training and experience.

    We've got to a situation now where these stores are browsed at the weekends, the customer uses the shops expertise, nice warm displays etc then the first thing they do when they get to work on a monday is buy it online. This is obviously not a sustainable model for retail, which a large percentage of our economy is based on.

    Further to counter you point, even the online PRICE COMPARISON engines have been moving away from purely PRICE listings. They all have an element of customer service reviews, and now most of them recommend a "smart choice" which is the cheapest of the retailers with x% positive feedback. As you might have guessed, the retailers operating on the smallest margins are often those who don't provide the service, so this recommended retailer isn't always the cheapest.

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