• Professional News
  • 10 September 2015

Illegal restrictions in selective distribution agreements on online sales of ASICS running shoes

It constituted illegal restriction of competition when ASICS, in all its selective Internet distribution agreements, laid down restrictions on distributors, for example prohibiting the use of price comparison search engines (such as www.pricerunner.dk) and online marketplaces (such as www.ebay.com). This has been held by the Bundeskartellamt.

The Bundeskartellamt held that ASICS's competition restrictions in its selective distribution agreements on Internet sales of the company's products constituted an illegal practice.

The decision was made in the wake of the company Adidas choosing to amend all its distribution agreements including similar terms. The Bundeskartellamt assessed that ASICS's terms were particularly restrictive for small and medium-sized businesses and that ASICS had generally applied sales restrictions removing the wide selection of services on various websites. Price competition in online sales was consequently reduced.

The case in brief
In all its selective distribution agreements on online sales of ASICS running shoes, ASICS had inserted several anti-competitive terms.

ASICS had prohibited all distributors from using price comparison search engines (such as www.princerunner.dk) for ASICS products and from using ASICS's brand name on third party websites to the effect that consumers would be directed to the distributor's own website (such as Google advertisements). In addition, no distributors were allowed to use online marketplaces (such as www.ebay.com and www.amazon.com).

The Bundeskartellamt observed that the result of such agreement terms was that small and medium-sized businesses otherwise parties to such distribution agreements would ultimately be excluded from the market in both online and offline sales.

The Bundeskartellamt also concluded in general that selective distribution agreements cannot be made subject to restrictions removing the wide selection of services on various websites since this will reduce online price competition.

The Bundeskartellamt expressed that its decision is supposed to be a move to start a debate at European level on anti-competitive prohibitions in online sales.

 

Comments by Bech-Bruun

The decision shows that businesses selling products on the Internet must ensure that the restrictions made in the agreements with distributors are not too restrictive.

The Bundeskartellamt has expressed that its decision is supposed to be a move to start a debate at European level on prohibitions in online sales contracts. We therefore expect to see more scrutiny in respect of such types of distribution agreements in the future.

Therefore, it may be worth the effort to pay attention to distribution agreements and, in the event of doubt, seek legal assistance.

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