Digital Single Market fragmentation by international traders

Digital markets have the potential to be more segmented than traditional markets due to their unique characteristics. Among others, digital platforms enable businesses to reach customers worldwide, allowing for targeting specific niche markets and catering to diverse consumer preferences. Large online and hybrid retailers do segment markets by allowing only shipment to the countries at which their national interfaces are directed. This segmentation is in some cases used to apply different prices that go beyond adjustment to national VAT levels, or to sell country-specific versions of specific products. Moreover, sizes of product catalogues may vary significantly across countries. In this paper, we provide evidence about the potential effects of these practices in terms of availability and price differences. We carry out an analysis to identify and web-scrape the biggest pure e-commerce first-party traders implementing these segmenting practices at the EU level, which run during the second half of 2021 and the first half of 2022. We analyse a number of pure online retailers regarding cross-country differences in catalogue composition and prices. The main results of the exercise indicate that there is a high variability in terms of availability of products with respect to a hypothetical EU-wide catalogue by each of the traders analysed in this exercise. The results also indicate a high variability in terms of the bilateral similarity of catalogues. Finally, we show that the average price differences in relative terms (percentages) can be as large as 10%. However, not many robust conclusions about price differences can be made since the exercise required to perform very different web scraping strategies given the characteristics of the different websites of traders considered.