On 31 January 2013, the Paris Court of Appeal upheld the fine of
€ 17,000 imposed by the French Competition Authority
(Autorité de la concurrence) on Pierre Fabre for
banning online sales of its cosmetics, following guidance provided
by the Court of Justice of the European Union ("ECJ") in
a preliminary reference ruling handed down on 13 October 2011 (see
VBB on Competition Law, Volume 2011, No. 10, available at
In the national proceedings, the French Competition Authority
had found that Pierre Fabre breached Article 101 TFEU and the
equivalent provision of French law by de facto prohibiting
its distributors in its selective distribution system from selling
cosmetic products over the internet through the requirement that
its products had to be sold in a physical space where a pharmacist
was present. The French Competition Authority found that the total
ban on internet sales imposed by Pierre Fabre amounted to a
restriction of active and passive sales which constituted a
hardcore restriction within the meaning of the 1999 Vertical
Agreements Block Exemption ("1999 VABER") and which could
not benefit through an individual assessment from the exemption
under Article 101(3) TFEU.
Pierre Fabre appealed the decision to the Paris Court of Appeal,
which subsequently made a reference for a preliminary ruling to the
ECJ, essentially asking it to rule on whether a ban on internet
sales amounted to a hardcore restriction of competition. On 13
October 2011, the ECJ found the de facto prohibition on
online sales imposed by Pierre Fabre in the context of its
selective distribution for its cosmetic products would amount to a
restriction of competition by object within the meaning of Article
101(1) TFEU unless it could be objectively justified. While such an
obligation could not benefit from the applicable exemption under
Regulation No 2790/1999, it was for the national court to decide
whether or not it could benefit, on an individual assessment, from
the exemption under Article 101(3) TFEU (see VBB on Competition
Law, Volume 2011, No. 10, available at
The judgment of the Paris Court of Appeal is of particular
interest in a number of respects. The Court first recalled that the
prohibition of online sales constitutes a restriction by object, as
confirmed by the ECJ in its preliminary reference ruling. The Court
then went on to consider whether the prohibition could be
objectively justified. In making this assessment, the Court
referred to EU case-law on the free movement of goods, where the
ECJ had not been persuaded that a need to provide advice and
protect consumers against incorrect use of the product was
sufficient to justify a ban on internet sales. The Court further
noted that personalised advice and information on products could
instead be offered via an interactive video link or an online
discussion with a pharmacist. Accordingly, Pierre Fabre's
clause prohibiting online sales was not objectively justified.
The Court then turned to the question of whether the clause
could nevertheless benefit from exemption under Article 101(3) TFEU
and examined the three arguments put forward by Pierre Fabre in
this respect relating to the need to provide tailor-made advice to
consumers, prevent counterfeiting and overcome free-riding.
Regarding personalised advice, the Court recalled that a
prohibition of online sales was not indispensable to the provision
of personalised advice and that this aim could be achieved by
other, less restrictive ways. Regarding counterfeiting, the Court
considered that a prohibition of online sales was not a solution to
counterfeit products and that, quite to the contrary, some
competitors of Pierre Fabre had decided to fight against
counterfeiting by allowing online sales. Regarding free-riding, the
Court considered that Pierre Fabre had not provided sufficient
evidence to demonstrate that allowing online sales would result in
consumers taking advantage of the advice and service provided in
bricks and mortar shops but ultimately choosing to make their
purchases online. The Court therefore concluded that the clause
could not benefit from exemption under Article 101(3) TFEU.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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