On 18 November 2015, the French Competition Authority (“FCA”) issued a press release announcing that it was putting an end to its investigation of the contractual practices of Adidas, one of the largest sporting goods manufacturers, as a result of Adidas’s change in its online sales policy. The FCA investigation, (which was carried out in coordination with its German counterpart), centered on the company’s 2012 prohibition for its selective distributors to distribute Adidas France products through multi-brand online “marketplaces”. These marketplaces are websites such as ebay or PriceMinister-Rakuten where numerous retailers offer goods for sale.
The FCA indicated that it contacted both Adidas France and the selective distributors which were affected by the contractual prohibition to use marketplaces as one of their sales channels.
The FCA action follows a similar decision rendered by the German Competition Authority which had conducted, and dropped in July 2014, administrative proceedings against Adidas AG after the latter modified its policy so as thereafter to allow its selective distributors to create shops at online marketplaces. We commented on this German case in our March 2015 webinar on distribution agreements in Germany, Italy and the UK.
In our February 2015 webinar on French and EU distribution agreements and product pricing, we had highlighted the risk run by suppliers in France which indiscriminately ban on-line marketplace sales by their selective distributors and completely exclude such marketplaces from their permitted channels of distribution. The Adidas withdrawal of the offending clauses, thus obviating an FCA decision, confirms this concern.
In its press release, the FCA reiterated the conclusions drawn from its own opinion of 18 September 2012: “as far as online sales are concerned, the conditions imposed by manufacturers to their distributors should not hinder this types of sales in an unnecessary way and it is prohibited to ban online sales as a matter of principle”. Thus, although the prohibition of using marketplaces does not amount to an all-out prohibition to online sales, the FCA took the view that the online marketplace ban constituted an unnecessary impediment of online distribution, which was disproportionate to the goal of protecting the brand image of Adidas.
On the other hand, the FCA, consistent with its previous opinions, has left open the possibility for retailers to impose valid qualitative criteria which must be satisfied by their selective distributors when operating through such online marketplaces. However, it promises to ensure that selective distributors are allowed to have effective access to online marketplaces.