Distribution of products sold under a selective distribution agreement through online marketplaces (Amazon, ebay,…)

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The Pierre Fabre decisions clarified the point about the legality of product’s distribution through the reseller’s website. The question then arises concerning the legality of marketplaces in the context of a selective distribution network.

The most problematic situation concerns manufacturers operating a selective distribution network and facing the growing importance of marketplaces in the distribution of goods and services.

The market dislocation due to ecommerce has already led to many studies focused on these topics, both in France, where the French Competition Authority issued an opinion on September 18th, 2012 and in Germany during a session of the Bundeskartellamt (The German Competition Authority) on October 10th, 2013. Furthermore, the French and German competition authorities have exchanged their views on this matter during one of their biannual meetings on October 1st, 2014.

It must be stressed that Germany and France are known as the two EU member states where most of the selective distribution agreements contain a clause excluding distribution through online marketplaces.

This probably explains the volume of litigation on both sides of the Rhine, which is not stabilised yet. From case to case, the decisions taken in both countries either prohibit or validate clauses which ban the use of online marketplaces.

In the face of these uncertainties, the Court of Justice will have to take position, following 4 requests for preliminary ruling raised by the OLG Frankfurt am Main (Court of Appeal) on April 19th, 2016, and related to the German company Coty GmbH which prohibits its retailers to use online marketplaces.

In its Preliminary Report on the E-commerce sector inquiry, that has been published on September 15th, 2016, the European Commission gives its own contribution on this matter. Following a liberal approach, it states that such clauses prohibiting distribution through marketplaces do not constitute hardcore restrictions within the meaning of Article 4(b) and Article 4(c) of the Vertical Block Exemption Regulation, as they do not have the object of segmenting markets in the internal market based on territory or customers.

The European Commission or the National Competition Authorities may also decide to withdraw the benefit of the Vertical Block Exemption Regulation in cases where the marketplace bans restrict competition within the meaning of Article 101(1) TFEU and may not benefit from the exemption defined in Article 101 (3) TFEU.

The final report on the inquiry should be published in April 2017; in the meantime, the Commission will maintain its liberal position before the Court of justice in the Coty GmbH’s case.

Meanwhile, the French Competition Authorities will pursue their sector inquiry (…).

To be followed…..