Thank you for downloading this transcript to Nota Bene Podcast Ep. 135: Europe Q3 Check In: Brexit, Data Protection, and Block Exemption Regulations with Oliver Heinisch.
Listen to the original podcast released July 21, 2021 here: www.notabenepodcast.global
We’re checking in with our Europe-based expert Oliver Heinisch on the latest European updates and upcoming changes for the third quarter of 2021 including updates on Brexit, European Union data protection policies, block exemption regulations, and the United Kingdom’s immigration policies.
Guest:
Joining us for this conversation is Oliver Heinisch. Oliver is a partner in the Antitrust and Competition Practice Group in Sheppard Mullin’s London and Brussels offices. Oliver advises on all areas of EU, UK and German competition law with a focus on international cartel and abuse of dominance procedures including related antitrust litigation matters as well as merger control law. He also regularly advises clients on questions relating to the UK’s decision to leave the European Union.
Transcript:
Michael P.A. Cohen:
Welcome to Sheppard Mullin's Nota Bene. A weekly podcast for the C-suite, where we tackle the current national and international legal headlines affecting multinationals, doing business without borders. I'm your host, Michael P.A. Cohen. Let's get started.
Michael P.A. Cohen:
Welcome to episode 135 of the Nota Bene podcast. And thank you so much to all of our listeners in more than 100 nations around the globe. We so appreciate your continued participation in our ongoing conversations and your feedback. Please do keep it coming. It continues to help influence our program weekly, quarterly, and yearly and monthly, and however you want to look at it. We are continuing this week with our quarterly check-ins on the worlds, leading economic and geopolitical markets. Today turning our attention to Europe with our regular guests, Oliver Heinisch who joining us today from London. Oliver is one of my favorite people on the planet and a recurring guest on the show. I am so grateful to have him with us today and returning to the Nota Bene podcast for our listeners.
Michael P.A. Cohen:
Oliver received his undergraduate and legal degrees in Germany at Humboldt University in Berlin. He received his LLM degree at University College in London. Oliver is admitted to practice in England, Wales, Germany, and Belgium. He speaks fluent German, his native tongue, as well as fluent English, French and Italian. Oliver specializes in European and multinational competition law from his seat there in London and the United Kingdom. His bio will be linked to our show notes as always, and any listener who would like to explore Oliver's life history, background, qualifications, honors, achievements, and awards, all of which there are many can simply click through on the show notes and find Oliver instantly. Oliver Heinisch, welcome back to the Nota Bene podcast.
Oliver Heinisch:
Thanks Michael. It's great to be back.
Michael P.A. Cohen:
It is so great to have you with us. Without much more, I think we'll just jump right into our quarterly focus on the European markets. So, tell us, what do we need to know about legal and regulatory developments in those European markets over the past quarter and looking ahead and Q3, Oliver?
Oliver Heinisch:
Yes, absolutely look a lot has happened. And I think this podcast has started with an update on Brexit and I think it wouldn't be the same if we weren't to cover Brexit, at least for initial five minutes. It's been six months since Brexit has happened since probably worth just taking stock. It's clear we didn't have a complete disaster on the borders with lots of Flores getting stuck and banks are still in London. The city of London is still alive and we also get still some French cheese here in the shops and French wines. So, all hasn't been that bad as some predicted. But of course with the COVID crisis, I think the impact of Brexit has been a little bit blurred and things become clearer and clearer as we go along. As we know the exit has happened fairly promptly, a deal was rushed through with the European Union. But that was just really to take the political advantage of such a step and it doesn't mean that the exit has actually really dealt with all the various multiple issues that have to be dealt with.
Oliver Heinisch:
So, Brexit in a sense is an ongoing process and the UK is negotiating trade deals with other jurisdictions and is finding it difficult to strike deals, which are particularly beneficial for the UK. And the overall economic performance of the UK since the Brexit is still, I mean, I think it's minus 4.3%. Whereas, the EU over that time has grown by 1.3%. And they will likely remain, I mean, the EU remains the UKs biggest trading partner and it's just outside its door steps. The negotiations in relation to Northern Islands are ongoing. There's Northern Ireland protocol, whether we have customs checks in the Irish sea so that they don't have to be any checks on the island of Ireland just to preserve the peace agreement. And that has been now put on hold and the EU has gone to that another three months extension that meat it's called the sausage war, that sausages can basically go from the UK from the mainland to Northern Ireland.
Oliver Heinisch:
But that's just something that has to be dealt with and will have to be dealt with. And the parties are quite sort of apposed and the tone is quite rough. So, I think we'll see how that goes. But certainly the government has lost quite a lot of credibility and some trust with the EU. And the EU keeps moving closer together, the Union as such. And I think all countries in the Union do not want to give the UK the cake to eat it. And that remains to be the case. So, we're still waiting for equivalence decisions in relation to financial services recognition of judgments under the Lugano Convention, et cetera. And the EU is not moving forward, if the UK doesn't move on other areas. So, it remains quite a complicated relationship. Of course, the UK is looking to other markets such as China. But now with the stance of its allies, such as the US that has obviously become much more difficult.
Oliver Heinisch:
And so a lot of things are open and politically quite challenging for both sides. In terms of more concrete issues, when we look at competition law, for instance, of course, European law doesn't apply anymore in the UK. But we have laws that have been implemented into UK law, such as vertical agreements, distribution agreements. We're going to talk about that later on a little bit. But the UK is reviewing that at the moment and for people who do business in the UK, but also in Europe, there's an interesting point to note that under European law, when you place a product onto the European markets, you have intellectual property rights attached to these products, trademark rights, patent rights, design rights.
Oliver Heinisch:
Once you place it on the European market, these IP rights are exhausted and these products can then circulate freely within the Union. You cannot use IP rights anymore to prevent the circulation. The UK has said, okay, if a product is placed on the EU market, UK IP rights are exhausted. But the other way around doesn't work. So, the EU has said, the UK is a third country. We don't accept exhaustion of our European IP rights once a product is put onto the market in the UK. And that has obviously given rise to either concerns. On the other hand, it also gives companies advantages to really shut out the UK market from a distribution system that applies differently in the UK and in the EU. That's ongoing challenges we see, and the competition markets authority is looking at these things at the moment.
Oliver Heinisch:
It's also reviewing, it's finding guidelines here and interesting, probably just to note that while you were able to get a discount from your fine in the UK, when you had a functioning well designed compliance program, they're now suggesting to take that out and make it even similar to the EU whatever the EU says, while you have a compliance program, that's great. But you have nevertheless entered into in cartel agreement, which is a sign that your compliance program didn't work. So, why should you get any discount? And I think the UK is now moving into that same direction. But that being said, I think designing compliance programs for clients, it is just very important to have these properly designed and achieve highest level of compliance, even if you don't get any discounts from clients. So, just to mention also a couple of good news since Brexit, I think on the data privacy side. The European Union has recently issued a long awaited adequacy decision by which it has established that the UK system of data protection is of adequate standards and to similar standards as it is under the European Union's general data protection regulation.
Oliver Heinisch:
And therefore data can flow freely between the EU and the UK and no further measures have to be taken by companies. That's good news because of course the UK in particular for American companies is often a data hub and data flows from the EU member states back to the UK, back to the US. So, the exchange between EU and UK is okay. And on that note, it's probably worth mentioning that there is an ongoing discussion in the UK about alleviating the burden as they sort of say for businesses from the GDPR and make life easy in the UK. And they are quite strong voices, but that hasn't really been advanced much. But if that continues, then EU could, of course, withdraw its decision of adequacy, and then companies would have to put other measures in place. While we're at privacy, I can probably just briefly mentioned also another tool to allow for data, to be transferred out of the EU, European Union.
Oliver Heinisch:
You can rely on what's called a Standard Contractual Clauses. And the European Commission has just issued new Standard Contractual Clauses, which companies can copy and paste into their agreements. They shouldn't amend them. There are more detailed Standard Contractual Clauses as there were before. And they deal with a transfer between a controller and a processor who's not in the European Union. Or a controller to a controller who's not in the European Union. Or a processor to a controller, or processor to a processor. So, you can take a modular approach but importantly, I think this is all come about the challenge to successful challenge of the EU–US Privacy Shield under which data was being able to transfer to the European court of justice has acknowledged that. And hence there was a need for a more sophisticated Standard Contractual Clauses.
Michael P.A. Cohen:
Multinationals are no longer, from what I'm hearing you say, multinationals are no longer dependent on state treaties between say North American countries like the United States and Europe. But they can indeed adopt on their own Standard Contractual Clauses that the European Union has deemed will be sufficient for data privacy, without regard of having to follow the intricacies of negotiated agreements between member nations and the European Union. Is that the gist of that?
Oliver Heinisch:
That is the gist somehow, yes. However, as a US company that has signed up to the EU–US Privacy Shield. Under US law, it still has obligations under that Shield. Whereas, that Shield is not deemed sufficient anymore from a European point of view. So, you would breach European data protection rules if you were to transfer data out of the European Union into the US. So, you need a different legal basis for that transfer. And a different legal basis can be either an adequacy decision as we just received it from the Union in relation to the UK. Or it can be Standard Contractual Clauses, which have been approved by the European commission and they have just come out.
Oliver Heinisch:
So, companies actually need to do something about that. They might've relied on old Standard Contractual Clauses. There's a grace period, but I think it's a good time to start reviewing those and reviewing the international data flow mechanisms they have in place. And that's definitely following the judgment from the European Court of Justice, there's an increased requirement for review of the protections individuals get when that data comes for instance to the United States. The big concern at the time in that challenge was the excess of US Government Agencies to private data, personal data of European citizen once it has been transferred to the US. Companies will have to do some due diligence just to see whether they have adequate protection in place. And then formalize that in the sense of Standard Contractual Clauses
Michael P.A. Cohen:
That sounds like a pretty big deal given the fact that the European Union and the United States are two of the three largest economic and geopolitical markets on the planet currently as humans occupy it. And there is no shortage of relationship and multinational business between those two, not only given their size to each other, but they're co-dependent histories and the European world seeding much of North America, at least economically and culturally.
Oliver Heinisch:
Absolutely.
Michael P.A. Cohen:
I think that's a big note for our multinational audience. I'm hearing Oliver say, if you are doing cross border business between the European and United States markets, it is time to do a diligence review of your data transfer under the relative privacy developments that are recent and new over past Q2, because things can get dicey for you if you don't, and could be easier for you if you do. So, it's a win-win to do it, I think. Right, Oliver?
Oliver Heinisch:
I fully agree with you and it's, I think there's no way around it. And I think as you say, our multinational listeners will be aware of these issues. But now this has basically just come out and we also published a blog article on that, on the Eye Of Privacy Blog of the firm. And I think it's just worth getting ahead of that with that, because time's running out.
Michael P.A. Cohen:
I'm super glad you mentioned that blog. We will link that blog in the show notes so that listeners can once again, just click through and obtain it instantly at their fingertips, by clicking through the link in the show notes. I know you have some topics you might like to transition to, but I wanted to go back to Brexit, which I think you described in our pre-con is boring Brexit. But I still find it a little bit fascinating only because of the twisted logic that I simply can't seem to assess. It seems to me that, what I was struck by most notably, I think, is your citation to the statistics that the European Union, even with all of the COVID fiasco and the bickering that's occurred, and many other things that I'll describe as background noise. But certainly non-trivial. But background noise. The European Union was largely rowing together and group economically, right?
Michael P.A. Cohen:
I mean, this is a market term from the economic downturns that we experienced worldwide with the exception of China, which continued to grow throughout the pandemic. And now we know may have seeded it. We have no idea. They won't tell. They're certainly behaving like they did if they didn't, that's a weird way to behave, but put all that aside. The European Union grew and the United Kingdom did not. The United Kingdom continued to shrink. I'll go back to saying this and I've long viewed Brexit just from the outside. And I often welcome perspectives beyond the US borders about the United States, because I feel that they can add a dimension of objectivity that comes from no place in emotion. And I try to distance myself a little bit that from here. But to objectively look at the decision of Brexit, I could never figure it out. But I've often viewed the United kingdom's market completely codependent on the European Union, completely codependent.
Michael P.A. Cohen:
It does not have an independent trade relationship with America big enough to be sustaining in any way. And the BBC is the only news service that China recently kicked out. So, that probably shows you something about its relationship with China. The Tiny Island that colonized that empire for years is not going to be high up on their list to help for any particular reason currently. I mean, there are centuries old scars there that the Chinese are not going to just gloss over and pretend that go away. So, if they're hanging hope on things like Germany's status, as a leading trade partner with China. I think they're in for a big surprise. And they also don't have much that China wants or needs. So, there's really no leverage there, even in financial markets, frankly. So, I have long viewed the United Kingdom as very codependent economically on the European Union and the European members co-dependent on each other.
Michael P.A. Cohen:
I mean, that's why they formed a common market. That's why it's worked in many ways. Well, that's one of the reasons they formed a common market and certainly a strong contributor and why it's worked. It seems to me that all they've done is now become codependent on the European Union without any ability to influence economic policy amongst that common market that benefits them in any way. And so what did they trade that for? I keep saying, why would you do that? Why would you leave the market that you are entirely codependent on and just abandoned any ability to influence it? And the only thing I can come up with, and this is why all this is leading to, I'm going to throw this out to you for your reaction, is that they really traded the ability to influence the economic Union that they are most dependent on for immigration policy. It's one of these fictions to talk about it as something else. I mean, they just wanted to control their own immigration policy. What's your reaction to that?
Oliver Heinisch:
No, absolutely. Look, I think immigration was the key driver for the vote on Brexit that was accelerated or overemphasized the fear of European Union citizens coming to the UK and taking jobs away from the UK labor markets. And so that was the big concern. But then if you look around, I have three building sites in my road, who is doing the building work? There's not a single, British national on these building sites, everybody is from Eastern Europe, Bulgaria, Romania, and they're doing the hard work. And it's sort of the question, but then interestingly enough immigration was definitely the key driver for people to vote in favor of Brexit. Everything else, taking back control, keeping all that money that we have to send to the European Union, these were all stories and headlines they were riding on.
Oliver Heinisch:
But I think interesting there was on the 30th of June was the deadline for EU citizens living in the UK to apply for what the call Settled Status. So, you can enshrine your rights, which you have under previous rules, under European rules, enshrined for the long-term. So, you can stay in the UK without having a UK passport on the basis of your Settled Status. That deadline ran out on the 30th of June and they estimated between 3.2 and 4.1 million European citizens to be in the UK. But it was actually 5.3 million people applied for Settled Status. The numbers we had in terms of the reliance of the company on foreign labor were wrong. A lot of the data was wrong, and now you have all these people having applied for Settled Status. And of course, European immigration has collapsed, has gone down dramatically.
Oliver Heinisch:
But that doesn't mean that overall immigration has gone down. It stayed roughly the same. It's just people come from different areas of the world, right? So, immigration from Asia has rapidly increased since Brexit. Look, I share your view. Obviously I'm the wrong person to ask being, having both passports a UK and a German passport. But I'm obviously a European citizen and I never understood the decision. But you're right. It was immigration was the key driving factor for many voters.
Michael P.A. Cohen:
Look, I mean, immigration is certainly a legitimate national policy of sorts. I don't think it's a legitimate national policy decision in America. America is an immigrant nation. And all of a sudden say, you're not, is just so backwards that I can't even begin to address it. In Europe it has always been an issue of sorts. The European Union seems to be over it, seems like the United Kingdom acted from immigration policy in ways that still appear to me to be very xenophobic. And I use that word, not as a judgmental word, but as a fact that the country was fearful of losing something that it valued from the folks populating and coming in to the nation to work and to live and all these other types of things.
Michael P.A. Cohen:
Personally, I think fear is a really bad reason to do things. And so far for the UK, you told me that there were no big traumas, but the big traumas are punted. You listed off five things that matter most to the United Kingdom that the European Union hasn't budged on. And these were all the things in the "Agreement" that they decided just to not agree on and leave. And until those things are resolved, their economy is already declining. And if those things don't get resolved in their favor, I see a lot of trouble ahead.
Oliver Heinisch:
I agree with you. And I think the final part that immigration is what I hadn't seen at the time was basically just the jobs that actually are being filled by people from the European Union, such as nurses, people picking the fields in the countryside, et cetera. I mean, who's going to fill these jobs. Do we have the capacity? Do we have educated people for the various business areas? Or are we actually relying on immigration to fill these jobs? I didn't really see that sort of information being objectively shared when we were talking about EU immigration, because obviously that will be lack of labor and qualified labor. And nobody knows how this is going to be dealt with. But then I guess it's immigration from elsewhere, whether that's a good reason to shut yourself out of the European Union.
Michael P.A. Cohen:
We'll see whether that trade works for them. I mean, to see it in both places holding both passports. So, sorry to distract you. But I did think that that was worth a pause, big picture points on my end there would be number one, the privacy point that you mentioned. But number two on Brexit, I don't think you can say that anybody's out of the woods. I think there's a lot of breaths to be held and see how the big issues turn out. What else should our multinational listeners need to know about the European markets? How about in the competition, do we know anything else where you feel there is some particular multinational interesting emphasis?
Oliver Heinisch:
Yeah, absolutely. Look just very briefly probably moving to the European Union. The cartel enforcement has always been the most important thing on the European Union's agenda and there have been less cases, but there still have been a lot of cases nevertheless. And I think one thing to notice that given the COVID crisis and where we are, I think the authorities have started to rate again companies and using the information they have collected over the periods. And now investigating companies onsite. Germany has recently rated companies and the European Union as well. That's going to continue. In terms of merger control I think, there's an ongoing debate about the need for new merger control regime in the European Union. But I do not expect anything to happen very soon. But I'm just mentioning the issue of killer acquisitions. That's something which European Union feels it can't deal with properly, at least under the merger regime, but we have the ongoing debate around the digital markets agreement and to see whether the European Union can deal with it under that regime.
Oliver Heinisch:
That's ongoing, that's going through the process. In the European Parliament it's being debated. The scope's being changed. What is a gatekeeper remains a big topic. So, these rules are still very much draft and work in progress. And probably just to mention on digital markets, I think interestingly, the European Union, the French Authority, the German Authority, as well as the UK Authority have launched investigations into the ad tech market, all with slightly different scopes. But it is about how data's being collected through the placing of cookies. Who can place these cookies. It was all prompted by Google's decision to change its away that allows third party cookies onto its browsers, and that has prompted several investigations. It's early days, but interestingly here in the UK, the CMA, the Competition and Markets Authority is collaborating closely with the information commissioner officer, the data protection regulator, and together, they're now supervising Google's ways of dealing with its proposed changes.
Oliver Heinisch:
These regulators now work closely together and that's the first. And I think it's an interesting process and other authorities are looking closely at how this cooperation and oversight will work in practice. That's basically broadly what I wanted to say about these cases. What I wanted to move on to, if you agree, is the area of vertical agreements or distribution agreements, which is a big topic in the European Union at the moment because the law relating to these agreements is being currently reviewed and new rules are coming into the next year and the commission is preparing for that and is running consultation process. In that area of course, that's important for all companies selling products into the European Union to distributors or to retailers. And these sorts of distribution, we call them vertical agreements, between companies and different levels of trade, they can benefit from what we call a block exemption.
Oliver Heinisch:
So, if they fulfill certain conditions and comply with the vertical block exemption regulation, these agreements fall outside the scope of competition law. And that has been a very successful tool and companies still need to self-assess whether they actually fulfill the conditions, but once they do, then they have the legal certainty that they do not fall within the scope of the competition prohibitions of anti-competitive agreements. That's a nice thing to have. You have that regulation, and that regulation is accompanied by guidelines, which are quite detailed that help you with the self-assessment. Either to self-assess, whether you fall within the safe harbor of this block exemption, or what happens if you fall outside and what you have to do to make your agreements in line with the law. This is currently being reviewed. The existing rules are 10 years old and no need to say that the market has significantly changed in these last 10 years.
Oliver Heinisch:
Not least because of the emergence of the internet, which of course has changed consumer behavior. And it has changed the way in which products are bought and sold in the European Union. And so, without going into detail on all the different areas that are being discussed, but I think a couple of property points, which have come out of the consultation process in which are currently subject to a heated debate. I mentioned a couple of three of those. One is steel distribution. That is an increasing phenomenon where you have manufacturers selling directly to consumers, their branded products, and at the same time sell to consumers through retailers, distributors, or retailers too. In that sense, you have the manufacturer who sells to consumers is a direct competitor to the other retailers and distributors it sells to. And so you have a vertical relationship and a horizontal relationship.
Oliver Heinisch:
And so far the rules exempted these types of scenarios from the scope of competition law provided the other conditions were met. And now because of the increase of direct sales to consumers and the increased data flow, there was a concern that manufacturers could use data they received from retailers for their own online or direct sales business. And the question was whether you should take these exemptions out of the existing rules and add additional thresholds. That's being discussed at the moment. But I think there are broad consensuses at the moment is that the exemption should stay because otherwise many companies, many manufacturers would have to change their go to market approach, and it would make things extremely complicated and expensive to change. So, hopefully we're advocating for keeping this exemption in the rules and to deal with any concerns of an information flow, confidential information flow through mechanisms, such as clean teams, et cetera.
Oliver Heinisch:
That's one area. The other area, which is a complex and complicated and therefore there are lots of voices that say that more guidance is needed is these active and passive sales distinction. And you can have restrictions in distribution agreements where you can restrict active selling from one distributor in one territory to customers in another territory. So, you can have territorial exclusivity, but only in relation to active sales. So, you can prevent active sales from one territory into another territory. However, you cannot restrict passive sales, which are sales, which responding to unsolicited requests for purchase. In relation to a territorial restrictions, they are popular, but of course they are slightly in challenged with the overall policy objective of integrating the European markets. So, what the European Commission wouldn't want is that companies divide national markets up by the national boundaries and shut them up.
Oliver Heinisch:
So, they wanted to keep the market open. That's why you only have active sales restrictions allowed. But with the emergence of the internet, consumers are obviously clever, they can go through the internet into other countries and buy from there. And so the whole territorial restriction system doesn't really work anymore. And while that can make a lot of business sense for companies to have territories allocated, to distributors, to incentivize distributors, to invest, to protect them somehow from competition, with the emergence of online selling, which you cannot restrict because they're considered passive sales. It's become very complicated and that's why companies have moved away. And we've often helped companies to move away from exclusive distribution to what we call selective distribution.
Oliver Heinisch:
Where you have a system of authorized retailers regardless where they are, but they are basically selected on the basis of objective criteria. And that has been used much more. But companies want to use exclusive and selective in combination, which is currently not allowed. So, the Commission is looking at that and we'll see whether the rules will become a little bit more flexible and clearer on what is possible and what is not possible.
Michael P.A. Cohen:
That is super interesting. In America, when it comes to territorial restriction, that is generally in a vertical relationship. In a horizontal relationship that would be per se, criminal. In America, you would go to prison for that, federal prison for that meaning. If Coke and Pepsi said, oh, you take east of the Mississippi, we'll take west of the Mississippi. A lot of executives are going to be a right in the middle in Leavenworth, Kansas in a federal prison. That's not going to happen everybody. Both of those companies as well versed in that it would have very little actual incentive to do that in the modern world as well. But in a vertical relationship taking that same example, Coke can absolutely appoint and restrict territories for its bottlers and Pepsi owns its bottlers and can do the same thing and does, and many other walks of life from tractor sales to everything else. In America there is a pretty bright line rule that you can restrict vertical sales, territorially active and passive so long as there is sufficient interbrand competition.
Michael P.A. Cohen:
So, as long and Coke and Pepsi are competing, as long as GM and Volkswagen compete, as long as John Deere and Caterpillar are competing, they can each have exclusive outlets and exclusive territorial outlets. And the economic rationale behind that very clear rule in America is that competition really occurs at the manufacturing level. Then at the retail level, yeah, there are car dealers. But it's really Volkswagen competing with GM. It's not Johnny's Ford or John ... I'm sorry, Johnny's Chevy competing with Jerry's VW. They really don't have the means to do that. They're the channels, if you will, where somebody can purchase those products, but the competition is going on at the manufacturing level.
Michael P.A. Cohen:
And so consequently, those restrictions don't impact that competition, just the opposite. They intensify it. But Europe, when I heard you talk about the act of passive distinction in the internet, what struck me as fascinating and important for folks to understand is that Europe's rationale behind its territorial restrictions isn't solely economic in the traditional competition sense, but also has a European Union common market integration goals that its rules serve. So, you can't really look at things purely in kind of the economic rationale without looking at that policy as well. And that struck me as super interesting to note.
Oliver Heinisch:
And I think you mentioned that, you made a good point about Intra-Brand competition. The European Union is concerned about Intra-Brand competition, so that the competition between the products of the same brand. So, a Coca-Cola bottle, you say if you will, is sold through one retailer and they compete with another retailer, who also sells a Coca-Cola bottle. And online selling has been a good way for market integration because consumers could just shop around Europe online and that helped the integration. However, I think there is an exception that this might've gone all a little bit too far, and you have the issue with the dying streets, retail shops disappearing, and now one other area they're looking at is, which is being discussed, which we are discussing at the moment here in Europe is the question of whether you can now incentivize again, brick and mortar stores through, for instance, having dual pricing, which is currently prohibited so that you have different pricing for different channels in order to give retail shops the incentive to run beautiful retail shops on the high street and prevent them from disappearing.
Oliver Heinisch:
Because of course, many businesses rely on in-person shopping experience and presenting their products in well-established retail shops. That's also being currently discussed. And the Omni channel approach we're now living with is just the reality. And I think the European Commission accepts that, that we have consumers that go on the internet to shop around prices, go into a shop to look at the actual product and then buy it somewhere else in a different country. So, that's a reality and companies have to deal with that and incentivize the various channels accordingly.
Michael P.A. Cohen:
That's super interesting. I mean, you certainly see that physical presentation presence and desire to meet the customer on the street in luxury brands. I mean, we see it all over the place. And luxury brands aren't just for the luxurious anymore. Luxury brands are really just a way to note distinct brands, I'll call them, something that is unique by its design and presentation. And that runs across all kinds of things now. And particularly, even digital works where we're now seeing uniqueness and distinctness arise in the marketplace. And I think we'll have to keep an eye on that as Europe tames the 21st century world, consistent with its policies for a common market. And that is a super fascinating thing to watch. I do often raise the question on the show, whether or not certain forms of government might be more adept to manage social welfare.
Michael P.A. Cohen:
And I don't mean that in a dependency way. I just mean the benefit of the population in some way, more or better than others. And Europe's very open and transparent goal of commonality, and inclusiveness, and integration is a super interesting primary objective to perhaps give it an edge in some ways and managing forward rather than the wild west policies that have benefited certain continental markets, America for sure, in the past. And this is another area where I think that that rubber meets some road and one we'll keep a close eye on it and maybe talk about it again in Q3. Oliver, I've had you for as always longer than I promised you. And I am so grateful for you staying for that time, but also mindful of it. Is there anything else that we should know for this Q3 check-in?
Oliver Heinisch:
Well, look, I think the only important thing to notice that most big European nations have exited the European Football Championship and that the UK is the only, well the UK and Italy are the only, and Denmark are the only nations left in the European championships. UK will play tonight and we'll see how that whole competition will end. Otherwise, there's of course, many other things to talk about, but I suggest we're going to cover that in our next update. And I might have some further news on the various topics we discussed.
Michael P.A. Cohen:
Well, that's great. And it's a great note to end on. Thanks so much as always for joining us around the world on the Nota Bene Podcast.
Oliver Heinisch:
Thank you very much for having me, Michael Cohen.
Michael P.A. Cohen:
That's it for this week folks. Next week, we will be looking in on the African continent with our regular guest, Andreas Stargard, who I am looking forward to speaking with. As always stay tuned and thank you so much for listening.
Resources Mentioned:
Oliver’s blog post - Free Data Flow to the UK May Continue – EU Adopts Adequacy Decision
Contact Information:
Oliver’s Sheppard Mullin attorney profile
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