Regulatory risk update: online sales restrictions under scrutiny of European Antitrust Authorities
Competition authorities in Europe are clamping down on restrictions or bans on online sales, especially sales over internet platforms such as Amazon and eBay.
As a general principle, the EU Commission considers that every distributor must be allowed to use the internet to sell products (Vertical Guidelines). However, in the case of third-party internet platforms, the EU Commission accepts that a supplier may restrict sales over those platforms by requiring that customers do not visit the distributor’s website through a site carrying the name or logo of the third-party platform (paragraph 54 of the Vertical Guidelines). Other competition authorities, including the German FCO, appear to diverge from this approach and require ‘objective reasons’ for banning sales via certain online platforms.
The prohibition on anti-competitive agreements (article 101(1) Treaty of the European Union, TFEU) does capture vertical agreements that try to limit or ban online sales. However, the prohibition can be exempted (i.e. be lawfully implemented) if the Vertical Agreements Block Exemption (VABE) is applicable, and providing there are no hardcore restrictions…
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