In May 2015, the European Commission launched a two-year, industry-wide inquiry into the e-commerce sector to gather data on the functioning of e-commerce markets, so as to identify possible competition concerns. This sector inquiry focuses particularly on potential barriers erected by companies to cross-border online trade in goods and services where e-commerce is most widespread (e.g. electronics, clothing and shoes), as well as in digital content.
While the European Commission intends to provide specific guidance on European e-commerce issues when it publishes its final report in 2017, early insights can be found in national competition authorities’ recent decisions, particularly in France and Germany.
In France, the French Competition Authority (FCA) announced on 18 November 2015 the closure of an investigation into the contractual practices of the sporting goods manufacturer Adidas, as a result of Adidas’ change in its online sales policy.
This FCA investigation, which had been carried out in coordination with the German Bundeskartellamt (BKA), centered on the company’s restriction of online sales for its selective distributors. The conditions for online sales, which were introduced in 2012, included restrictions on retailers from selling via large online platforms such as eBay and Amazon Marketplace.
In the course of the investigation, Adidas decided to remove the prohibition from its selective-distribution agreements for its distributors to use online marketplaces. In doing so, Adidas will still maintain a measure of control by subjecting its distributors to certain quality-related criteria. The FCA will continue to monitor the sector to ensure that authorized retailers actually benefit from effective access to online marketplaces.
Similar decisions were reached in Germany, notably in July 2014, when the BKA ended administrative proceedings against Adidas after the latter modified its policy so as thereafter to allow its selective distributors to create shops at online marketplaces, and more recently in August 2015, when the BKA issued a declaratory decision accusing Asics, the market leader for running shoes in Germany, of having restricted the online sales activities of small and medium-sized authorized dealers in particular, a practice which Asics also ended before the decision was issued.
It should be noted that, in the context of the FCA investigation, Adidas’ decision to remove certain clauses from its agreements is not a “commitment,” to the extent that it was not taken following the FCA’s formal commitments procedure. In particular, it occurred before the opening of the formal investigation (i.e. before any statement of objections was sent). The FCA merely decided to close its investigation following Adidas’ decision to remove the restrictions from its selective-distribution agreements.
Nevertheless, in its statement announcing the closure of the investigation, the FCA also recalled the conclusions of its 2012 opinion resulting from its own sector inquiry into e-commerce in France: “As far as online sales are concerned, the conditions imposed by manufacturers to their distributors should not hinder these types of sales in an unnecessary way and it is prohibited to ban online sales as a matter of principle.”
Thus, according to the FCA—and in line with previous assessments from the BKA—although the restriction against using marketplaces does not amount to an all-out prohibition of online sales, such a restriction constituted an unnecessary impediment of online distribution, which was disproportionate to the goal of protecting the brand image of Adidas. Following Adidas’ decision to amend its online sales policy by removing certain clauses from its agreements, the FCA decided to close its investigation.
These decisions from national competitions authorities should be considered as part of a process of discussion at the European level on the assessment under competition law of the prohibition of the use of online marketplaces and other restrictions of online sales, an issue on which the European Commission’s e-commerce sector inquiry will also possibly provide further insights.
These decisions from national competitions authorities should be considered as part of a process of discussion at the European level on the assessment under competition law of the prohibition of the use of online marketplaces and other restrictions of online sales, an issue on which the European Commission’s e-commerce sector inquiry will also possibly provide further insights.
