According to a recently published judgment of the lower regional court of Frankfurt (the "Court") of 18 June 2014, a general ban on sales by distributors over third party Internet platforms and a prohibition on the use of price-comparison sites constitutes a hardcore restriction of competition law.
The case concerns a dispute between a sports bag manufacturer, Deuter, and one of its resellers. Deuter is one of the world's leading sports bag manufacturers and has a market share of 45% in Germany.
Deuter decided to change its distribution structure and to sell its bags through a selective distribution system as of 1 March 2013. It sent a letter to all resellers selling its bags announcing the change in the distribution policy and supplying them with a selective distribution agreement. According to the agreement, the authorised resellers were prohibited from: (1) selling Deuter's bags through Internet platforms and from making Deuter's products available to such platforms; and (2) using price-comparison sites or make pricing information available to such sites. One of Deuter's resellers challenged the above-mentioned clauses on competition law grounds.
Considering the ban on using third party platforms, the Court noted that, based on existing case law, it was unclear whether such a ban could be considered legitimate as different German courts have taken divergent views on that matter. The Court concluded, however, that a general ban on using third party platforms is a hardcore restriction within the meaning of Article 4 (c) VABER, which applies to restrictions on active or passive sales to end-users in a selective distribution system.
In particular, the Court noted that paragraph 54 of the Vertical Guidelines allows a supplier to require that customers do not visit a distributor's website through a site carrying the name or logo of a third party platform. This wording suggests that manufacturers should in principle be free to ban sales over third party platforms as such platforms usually carry their own logo in addition to the logo of the manufacturer. The Court found, however, that such an interpretation of the Vertical Guidelines cannot be reconciled with either Article 101 TFEU or with Article 4 (c) VABER. This is especially true after the ECJ's 2011 judgment in Pierre-Fabre, which held that a ban on online sales is both a restriction by object and a hardcore restriction under the VABER. The general ban on sales over third party platforms imposed by Deuter was considered to be a hardcore restriction as it would lead to a de facto ban on a significant part of online sales.
The Court took the view that the restriction on sales over third party platforms introduced by Deuter cannot be justified by any efficiencies. In any event, even if there were to be some underlying quality considerations, there should be less restrictive means to safeguard them, e.g. by devising a set of qualitative requirements for third party platforms.
Concerning the ban on using price-comparison sites, the Court took the view that, in light of the above-mentioned considerations, such a ban is equally unacceptable and should be viewed as a hardcore restriction within the meaning of Article 4 (b) and (c) VABER. The Court ordered Deuter to continue supplying the reseller with Deuter's bags and to stop using the restrictive clauses. If Deuter failed to do it, it would have to pay € 250,000 for each violation of the Court's order.
The judgment is of particular interest in that it expressly contradicts the Vertical Guidelines.
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