Since the landmark ruling of the ECJ in the Pierre Fabre case (C.439/09 October 13, 2011), imposing a blanket prohibition on selling via internet in a selective distribution network constitutes a prohibited restriction of competition.
A recent French decision of the Paris Court of Appeal dated February 2nd 2016 (n°15/01542) has likely broadened the scope of this restriction.
In November 2014, the Caudalie cosmetics company applied for an injunction against the "1001pharmacies.com" marketplace platform to compel it to cease selling Caudalie personal care and beauty products via their on-line website. This was on the grounds that 1001pharmacies.com was not an approved distributor of Caudalie and that those pharmacies which were approved Caudalie distributors were authorized to sell on-line only via their own internet sites, as opposed to via an on-line marketplace. The injunction sought was granted by the Paris Commercial Court in December 2014, which considered that the activity of 1001pharmacies.com was in violation of the selective distribution system of Caudalie and thus was "manifestly illicit".
The online pharmacist marketplace lodged an appeal, citing inter alia the pronouncements of the French Competition Authority in the Samsung and Adidas cases (see our previous December 2015 Bulletin: "Sporting goods company bends the knee on marketplace distribution") as well as the recent case law of the German Competition Authority, in favor of on-line marketplaces.
Given the current trend to liberalize online marketplace distribution, the Court of Appeal concluded that the Paris Commercial Court was wrong to have issued the injunction on the grounds that 1001pharmacies.com's activities were "manifestly illicit", notwithstanding the fact that the online marketplace operated in violation of the terms of Caudalie's selective distribution contracts. Thus, even though the Court of Appeal was not ruling on the merits of the underlying case, it recognized implicitly the evolving jurisprudence whereby a blanket prohibition of internet marketplace sales may well be considered an illegal hardcore restraint of trade.
The Court's reasoning clearly goes further in the direction of limiting the possibility for suppliers using selective distribution networks to impose an outright ban on marketplace retailers carrying their products.
