18 November 2015

ASICS to appeal German FCO’s prohibition decision

ASICS recently announced that it will appeal against the decision of the German Federal Cartel Office (FCO) which found ASICS’ online distribution policy to infringe competition rules.

As previously reported in Community Week, ASICS introduced a new selective distribution system in 2011 which contained various restrictions on internet sales prohibiting retailers from:

  • reselling ASICS’ products through third party platforms such as eBay and Amazon without an exception;
  • using ASICS’ trademarks for re-sales over these platforms; and
  • engaging price-comparison sites.

The FCO issued a statement of objections to ASICS on 28 April 2014 regarding its distribution policy. According to the FCO, each one of the prohibitions qualifies as a hard core restriction of competition and together they constitute a de-facto prohibition of internet sales. Moreover, the FCO criticised ASICS for dividing its retailers into more than 20 groups to which different products were supplied so that each retailer could only offer a limited product range.

Despite ASICS revising its online sales policy in early 2015 in response to the statement of objections, the FCO still issued a formal decision on 27 August 2015 which found that ASICS' 2011 distribution policy constituted an infringement of competition law. By issuing a formal decision instead of informally closing the case (as the FCO had previously done in other comparable cases), the FCO has provided guidance to manufacturers of branded goods on how to adapt their selective distribution systems to the peculiarities of internet sales while still complying with competition law.

After having analysed the FCO’s assertions in detail, ASICS has now announced that it will appeal the decision to the Higher Regional Court of Düsseldorf on the grounds that its 2011 selective distribution system was in line with European competition law and in particular with the European Commission’s Vertical Guidelines.  The decision by the Higher Regional Court of Düsseldorf will deal with the specific terms of ASICS’ selective distribution system and may also provide some general guidance for the interpretation of German and European competition law in the context of e-commerce.

In addition, the European Commission is currently undertaking a sector inquiry seeking information on the terms under which products are bought and sold online.The sector inquiry was launched in May 2015 as a result of the European Commission’s general suspicion that there are unlawful restraints in the area of online trade. The sector inquiry will allow the European Commission to assess whether specific investigations into individual companies’ practices will be required. In any event, the European Commission is expected to publish a report setting out its findings of the investigation which may also provide competition guidance in relation to online trade activities of companies throughout the EU.

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