Commission welcomes letter from Mitsotakis urging action on multinationals

The European Commission has welcomed a letter from Prime Minister Kyriakos Mitsotakis querying territorial supply constraints (TSCs) “as a contribution to the overall reflection on the future of the single market.”

A spokesperson for the Commission said that it would reply “to the letter in due time.”

In the letter, which was addressed to Commission President Ursula von der Leyen, Mitsotakis referred to the “asymmetric power of some large multinational companies in terms of their differentiated pricing policy vis-a-vis individual member states.”

“The Commission remains constantly committed to bringing down unjustified regulatory and non-regulatory barriers to ensure a better functioning of the single market,” the spokesperson said, describing TSCs as “non-regulatory barriers to a better functioning of the single market.”

A 2020 study by the Commission confirmed the existence of TSCs, which prevent retailers from sourcing goods in the country of their choice.

The Commission estimates that TSCs cost EU consumers more than €14 billion a year.

“Under competition law, these agreements are illegal and these unilateral practices are prohibited if the manufacturer is dominant in the importing market,” the spokesperson added, pointing out that the Commission “has and is pursuing a number of such cases.”

The Commission saw the investigation of these cases as a matter of “priority.”

The spokesperson said that several member states have asked the Commission to look into this issue and to identify a single market solution beyond competition rules, adding that the “cost-of-living crisis makes the issue of prices to consumers even more sensitive.”

In its Transition Pathway for the Retail ecosystem published in March, “the Commission proposed to initiate a dialogue between the stakeholders concerned, i.e. international suppliers of branded products, retailers and consumers, to try to find solutions,” the spokesperson said.