Keywords

Summary



Keywords

1. Competition – Agreements, decisions and concerted practices – Adverse effect on competition – Selective distribution system – Obligation, under a contractual clause, to sell certain cosmetics and personal care products in a physical space in the presence of a qualified pharmacist – Not permissible if not justified by the properties of the products marketed

(Art. 101(1) TFEU)

2. Competition – Agreements, decisions and concerted practices – Prohibition – Block exemption – Vertical agreements – Regulation No 2790/1999 – Selective distribution contract – Clause prohibiting de facto the internet as a method of marketing the contractual products – Exclusion

(Art. 101(3) TFEU; Commission Regulation No 2790/1999, Arts 2 and 4(c))

Summary

1. Article 101(1) TFEU must be interpreted as meaning that, in the context of a selective distribution system, a contractual clause requiring sales of cosmetics and personal care products to be made in a physical space where a qualified pharmacist must be present, resulting in a ban on the use of the internet for those sales, amounts to a restriction by object within the meaning of that provision if, following an individual and specific examination of the content and objective of that contractual clause and the legal and economic context of which it forms a part, it is apparent that, having regard to the properties of the products at issue, that clause is not objectively justified.

By excluding de facto a method of marketing products that does not require the physical movement of the customer, the contractual clause considerably reduces the ability of an authorised distributor to sell the contractual products to customers outside its contractual territory or area of activity. It is therefore liable to restrict competition in that sector.

There are, however, legitimate requirements, such as the maintenance of a specialist trade capable of providing specific services as regards high-quality and high-technology products, which may justify a reduction of price competition in favour of competition relating to factors other than price. Systems of selective distribution, in so far as they aim at the attainment of a legitimate goal capable of improving competition in relation to factors other than price, therefore constitute an element of competition in conformity with Article 101(1) TFEU. In that regard, the organisation of such a network is not prohibited by Article 101(1) TFEU, to the extent that resellers are chosen on the basis of objective criteria of a qualitative nature, laid down uniformly for all potential resellers and not applied in a discriminatory fashion, that the characteristics of the product in question necessitate such a network in order to preserve its quality and ensure its proper use and, finally, that the criteria laid down do not go beyond what is necessary.

As regards, in particular, the sale of cosmetics and personal care products, the aim of maintaining a prestigious image of those products is not a legitimate aim for restricting competition and cannot therefore justify a finding that a contractual clause pursuing such an aim does not fall within Article 101(1) TFEU.

(see paras 38, 40-41, 46-47, operative part)

2. Article 4(c) of Regulation No 2790/1999 on the application of Article 101(3) TFEU to categories of vertical agreements and concerted practices must be interpreted as meaning that the block exemption provided for in Article 2 of that regulation does not apply to a selective distribution contract which contains a clause prohibiting de facto the internet as a method of marketing the contractual products. However, such a contract may benefit, on an individual basis, from the exception provided for in Article 101(3) TFEU if the conditions of that provision are met.

It follows from Article 4(c) of Regulation No 2790/1999 that the exemption is not to apply to vertical agreements which directly or indirectly, in isolation or in combination with other factors under the control of the parties, have as their object the restriction of active or passive sales to end users by members of a selective distribution system operating at the retail level of trade, without prejudice to the possibility of prohibiting a member of the system from operating out of an unauthorised place of establishment. However, the contractual clause at issue at the very least has as its object the restriction of passive sales to end users wishing to purchase online and located outside the physical trading area of the relevant member of the selective distribution system. Moreover, by referring to ‘a place of establishment’, Article 4(c) of Regulation No 2790/1999 concerns only outlets where direct sales take place. Accordingly, a contractual clause, prohibiting de facto the internet as a method of marketing cannot be regarded as a clause prohibiting members of the selective distribution system concerned from operating out of an unauthorised place of establishment within the meaning of Article 4(c).

(see paras 53-54, 56, 58-59, operative part)