Distribution via online marketplaces between brand strategy and antitrust law
Manufacturers and brand owners often have an interest in controlling the manner in which their products are distributed. This also includes the question of whether and under what conditions authorized dealers can be prohibited from offering goods on certain internet platforms – such as large online marketplaces. Such a sales ban regularly touches on antitrust law requirements and is therefore to be judged only within narrow legal limits.
Selective distribution systems as a starting point
Purpose and basic structure
In practice, bans on platform distribution are often embedded in selective distribution systems. Such systems aim to organize sales through selected distribution partners and to set qualitative requirements for presentation, service, or sales environment. Thus, sales are not completely prohibited but are tied to certain criteria.
Binding the dealer to contractual requirements
To the extent that dealers are incorporated into an authorized distribution system, requirements for the distribution channel are typically based on contractual agreements. Regardless of whether an agreement is validly concluded under civil law, the antitrust question arises of whether such restrictions are to be classified as inadmissible competition restrictions or whether they may be permissible under certain conditions.
Antitrust standards for platform bans
Competition restriction and justification approaches
A ban on offering goods on certain online platforms can be classified as a restriction of distribution freedom and thus as a competition-relevant measure. The antitrust assessment particularly depends on whether the restriction follows objective, uniformly applied criteria and whether it is used for legitimate purposes – such as protecting a certain brand image or defined quality standards.
Distinction to blanket online bans
Rules that effectively amount to a comprehensive exclusion of online distribution are legally particularly sensitive. If online sales are completely prohibited or access to online customers is cut off in a way that significantly hinders sales, this can be subject to stronger antitrust objections than a channel-specific guideline that continues to allow online distribution via its own shops or other permissible ways.
Significant judicial classification of sales bans
Basic lines of case law
The legal discussion on platform bans is significantly shaped by case law. Judicial evaluation regularly focuses on whether a selective distribution system is based on comprehensible quality requirements and whether a ban on certain platforms can be suitable to ensure the desired standard of product presentation or brand perception without exceeding the necessary extent.
Importance of concrete design
Decisive here are not abstract buzzwords, but the concrete contractual design and its practical effect: Uniform application of the criteria, transparency, proportionality, and the actual opportunity for dealers to continue selling online are regularly points that play a role in the assessment. It may also be relevant whether the regulation operates without discrimination and stands in a coherent system of qualitative requirements.
Legal risks at the intersection of contract, antitrust law, and competition
Conflict situations between manufacturer and dealer
Platform bans can have significant economic impacts on dealers if they restrict access to customer groups on certain marketplaces. On the manufacturer’s side, there is often the desire to control distribution channels and presentation uniformly. This conflict of interests can trigger civil law and antitrust follow-up questions, such as contractual enforcement or competition law implications in market behavior.
Relevance of accompanying competition law issues
In addition to antitrust aspects, competition law issues may also be involved depending on the situation, for instance, if measures in distribution lead to disputes over market behavior, equal treatment, or the legality of certain requirements. The classification always depends on the circumstances of the individual case, the market environment, and the specific contractual design.
Classification and outlook
Whether a sales ban for online marketplaces is permissible cannot be assessed in isolation from the system, purpose, and effect of the respective regulation. Key are particularly the structure of the distribution system, the quality of the criteria, their uniform application, as well as the actual effects on competition and the sales opportunities of dealers.
Anyone seeking legal clarification in connection with platform bans, selective distribution systems, or related competition law issues may contact MTR Legal Attorneys for individual assessment. Further information can be found at Legal advice in competition law.
