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Blocking online product sales may breach EU competition law
- — 04 March, 2011 05:38
The European Court of Justice (ECJ) looks set to rule that companies blocking online product sales are breaching European Union competition law.
The ECJ's Advocate General Ján Mazák gave his opinion on a case involving cosmetic products, saying that Pierre-Fabre's absolute refusal to allow its French distributors to sell its products on the Internet is "disproportionate."
Pierre-Fabre's selective distribution network policy insists that a pharmacist be present when its products are sold, effectively preventing any online sales. The advocate general said that this "goes beyond what is objectively necessary" in controlling a product's aura and image, and restricts competition.
He added that a ban on Internet sales eliminates a modern means of distribution that would allow customers outside the catchment area of a physical outlet to buy these products. This opinion could have wide ramifications for online consumers across the E.U. as they gain access to products previously withheld.
A general and absolute ban on Internet sales could only be proportionate in very exceptional circumstances, according to the opinion announced on Thursday. Although the opinion is not legally binding, more than 80 percent of the opinions of advocates general are upheld by the court.