According to the EU E-commerce sector inquiry, over 50% of Internet marketplaces and 36% of retailers supply data-feeds to price search engines such as Idealo, Google Shopping, or Shopzilla. By contrast, around 10% of dealers are subject to price comparison engine bans (see Commission Staff Working Document SWD(2017) 154 final, S. 32 Figure B. 4 and p. 37 European Commission, Final report on the E-commerce Sector Inquiry, p. 10).
However, the Federal Court of Justice recently confirmed a price comparison engine ban as anti-competitive and void. In the concrete case, Asics generally banned retailers in Germany from supporting price search engines in online distribution:
“In addition, the authorized … dealer shall not … support the functionality of price comparison engines by providing application-specific interfaces (“APIs”) for these price comparison engines.”
In addition, the agreement contained an extensive ban on advertising on third-party platforms: Asics prohibited its authorized dealers from allowing third parties to use Asics’ trademarks in any form on the third party’s website to direct customers to the authorised Asics dealer’s website.
Asics’ distribution agreement was first investigated by the German competition authority Bundeskartellamt as a pilot case (another pilot case was started against Adidas because many sports retailers complained about the Internet resale restrictions of sports equipment manufacturers). In 2015, the Bundeskartellamt decided that Asics’ ban on price comparison engines was contrary to antitrust law, as it would infringe Article 101 (1) TFEU, sec. 1 Act against Restraints on Competition. Reason given was that such ban would primarily aim at controlling and limiting price competition at the expense of consumers. This decision was first confirmed by the Higher Regional Court of Düsseldorf (decision of 5 April 2017, case no. VI-Kart 13/15 (V), see the Legalmondo article here).
Now, the decision has been reconfirmed by the Federal Court of Justice (decision of 12 December 2017, case no. KVZ 41/17). This Asics ruling is particularly noteworthy because it is the first German court ruling following the Court of Justice of the European Union’s Coty ruling on platform bans (see the Legalmondo article here). It is therefore a first indication of how the courts will deal with Internet resale restrictions in the future.
Thus, the Federal Court of Justice states that the general ban on price search engines “at least” restricted passive sales to end consumers (para. 23, 25) – such a restriction would even be the intended purpose of such ban. According to the court, the admissibility of general platform bans pursuant to the Coty judgment (see here) would not imply the admissibility of general price comparison bans (para. 28 et seq.). In particular, the “combination of restrictions” – i.e. ban of price comparison engines and advertising on third-party platforms – would make the difference. For it did not ensure that prospective customers got “practically substantial access” to the dealer website (para. 30) – whereby the Federal Supreme Court leaves open what is sufficient or necessary to provide such “substantial access”; in such case, general price comparison engine bans could continue to be permissible.
- At EU level, neither the Court of Justice nor the European Commission have taken a position on the validity of general bans on price comparison engines. In the United Kingdom, however, the Competition and Markets Authority takes a similarly critical view of price search engine bans (“BMW changes policy on car comparison sites following CMA action“) as German administrative practice and jurisdiction.
- In practice, the following differentiation, already indicated by the Higher Regional Court of Düsseldorf (Asics) and the Higher Regional Court of Frankfurt (Deuter), is thus likely to apply according to the Federal Supreme Court:
- General price comparison engine bans are – according to the Federal Court of Justice – anti-competitive and therefore generally void – although they may still be permissible if they are not combined with a broad advertising ban, so that prospective customers are guaranteed access to the dealer website.
- Individual price comparison engine bans and other milder restrictions / criteria for the use of price comparison portals are permissible, for example with regard to product illustrations or descriptions and the product environment (such as the requirement that dealers may only offer new products).
Further details: Rohrßen, Internetvertrieb: „Nicht Ideal(o)“ – Kombination aus Preissuchmaschinen-Verbot und Logo-Klausel, in: ZVertriebsR 2018, 118 ff.
- Moreover, manufacturers may – within an exclusive distribution network – prohibit their distributors active online advertising to customers reserved to the manufacturer or allocated by the manufacturer to another distributor and specify the languages used. In principle, all other conceivable quality criteria are also permissible, provided that they are equivalent to the criteria for offline distribution (because “the Commission considers any obligations which dissuade appointed dealers from using the internet to reach a greater number and variety of customers by imposing criteria for online sales which are not overall equivalent to the criteria imposed for the sales from the brick and mortar shop as a hardcore restriction”, Guidelines on Vertical Restraints, para. 56).
For more information, see
- the overview of the current state of practice including model contract clauses: Rohrßen, Vertriebsvorgaben im E-Commerce 2018: Praxisübersichts und Folgen des “Coty”-Urteils des EuGH, in: GRUR-Prax 2018, 39-41 as well as
- especially on platform bans and the possible drafting of distribution agreements: Rohrßen, Internetvertrieb von Markenartikeln: Zulässigkeit von Plattformverboten nach dem EuGH-Urteil Coty – Auswirkungen auf Fachhändler- bzw. Selektiv-, Exklusiv-, Franchise- und offene Vertriebsverträge –, in: DB 2018. 300-306.
- For the permissibility of the use of trademarks and company logos within a search function embedded in an Internet sales platform, see the press release of the Federal Court of Justice on its two very recent decisions of 15.02.2018 (case no. I ZR 138/16 re “Ortlieb” and case no. I ZR 201/16 re “gofit“).