eBay has expressed its disapproval of the European Commission's draft regulation on brick-and-mortar e-commerce, according to which internet retailers should have brick-and-mortar shops.

If adopted, the rule would allow manufacturers of everyday products to require retailers engaged in selling their products online to also maintain brick-and-mortar stores and to sell at least a certain amount of their products in such stores.

eBay has voiced concern that such a requirement would hurt small firms, keep prices high and stifle e-commerce. "The direction of the general text is very positive toward online commerce. (But) this brick-and-mortar provision is inconsistent with this," according to Tod Cohen, eBay's vice president, cited by Reuters. Cohen also mentioned that the requirement would benefit large retail players at the expense of small players. On the other hand, brand owners believe that such a provision would impede the so-called “free riders”, competitors who benefit from promotions initiated by brand name companies, from shifting stock on the internet on the back of advertising of a brand's products.

The current regulation is due to expire in May 2010. Existing guidelines exempt companies from strict EU competition rules under certain circumstances.