German Federal Cartel Office: Restriction of online sales of ASICS running shoes was unlawful

The decision

On 27 August 2015, the German Federal Cartel Office (FCO) concluded its proceedings against ASICS Deutschland with the finding that ASICS Deutschland restricted online sales of running shoes in an anti-competitive manner.
ASICS Deutschland had imposed several restrictions on its authorised dealers within a selective distribution system. For instance, the dealers were not allowed to use price comparison engines for their own online presence, or to use the manufacturer’s brand names on third-party websites to guide customers to their own online shops. According to the FCO, both prohibitions must be regarded as excessive sales restrictions which particularly restrict the online sales activities of small and medium-sized authorised dealers and therefore constitute infringements of competition law.

Third-party platform bans

Interestingly, the FCO has not decided whether a general prohibition of the use of third-party online market places such as eBay or Amazon Marketplace (“third-party platform ban”) is anti-competitive but left this question open in the decision. In its “preliminary view” in 2014, the FCO had classified such a sales restriction as an infringement of competition law. It also took a similar position in its probe against adidas. However, the FCO’s press release mentions that the present decision is intended to trigger a discussion process, also at the European level, specifically on this question. A reassessment appears to be appropriate given that there is currently no consistent approach with regard to the legality of third-party platform bans within the EU.

European perspective

From a European perspective, each dealer should, in principle, be free to use the Internet for selling its products or commercial services . However, according to the European Commission (Commission), a supplier which applies a selective distribution system may require that its dealers abide to certain quality standards with regard to their online activities. Such quality standards may comprise, in principle, third-party platform bans (cf. the Commission’s Guidelines on Vertical Restraints, OJ 2010 C 130/1, para. 54).

However, in its Pierre Fabre judgment of 13 October 2011, the European Court of Justice (ECJ) held that a de facto prohibition of online sales in a selective distribution system constitutes a “hard-core restriction” that infringes EU competition law. The Court took a particularly critical position vis-à-vis the possibility of justifying such a restriction with the need to maintain the prestigious image of a product (case C-439/09). Referring to this decision, the FCO had previously questioned whether the Commission would still uphold its position on third-party platform bans as expressed in the 2010 guidelines. In addition, there is currently no guidance at the European level concerning the admissibility of third-party platform bans which are not combined with a selective distribution system.

Earlier this year (i.e., in May), the Commission launched a sector inquiry into e-commerce. This may, inter alia, provide the Commission with the opportunity to reassess its position regarding the admissibility of third-party platform bans.

Conclusion

The FCO’s decisions concerning restrictions on online distribution as well as the Commission’s e-commerce sector inquiry exemplify that antitrust authorities are more than ever focusing on online sales restrictions and particularly third-party platform bans. While the FCO has adopted a restrictive position on these issues, it remains to be seen what the future position of the Commission will be. That said, the decision means, once again, that companies which distribute their products or commercial services via a selective distribution system in Germany should align their distribution contracts with the FCO’s current legal position.