Online selective distribution and platforms bans: The Coty judgment of 6 December 2017

Law & Economics Workshop organized by Concurrences Review in partnership with Mayer Brown and MAPP.

Nathalie Jalabert Doury

The Coty judgment was eagerly awaited for a number of reasons, starting with the length of the Court’s case law on the conditions for the application of Article 101 to selective distribution networks, and even its lack of clarity. The founding case-law dates back to the 1970s and 1980s, while more recent pronouncements have been few and far between and have sometimes raised questions. Thus, in the Pierre Fabre case of 2011, the Court of Justice stated that "the objective of preserving the prestigious image of these products cannot constitute a legitimate objective for restricting competition", which could be read restrictively even if this point was made in relation to an absolute ban on online resale.

At the same time, in several Member States questions have arisen about the prohibition of resale on platforms to selective distributors, even though the Vertical Guidelines provide for the supplier’s right to subject such use to standards and conditions. In its opinion on e-commerce in 2012 and in its Samsung decision in 2014, the Competition Authority indicated that an absolute ban on resale on platforms "could" possibly be an indication of a restriction of competition. In Germany, in a Deuter Sport decision, the legitimate interest of the supplier to prohibit resale on platforms was upheld, whereas in the Adidas, Asics and Coty cases it was considered that such a prohibition could constitute a hardcore restriction.

Photos © Léo-Paul Ridet

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