Restrictions on Selective Distribution Systems on the Internet

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Fryderyk Hoffmann, Oct 29, 2014

The growing significance of the internet as a channel of distribution has made it the subject of increasing scrutiny from both competition authorities and courts across the EU. This is, in particular, the case for various forms of restrictions of distribution through the internet. This article considers the stance of competition authorities, including the European Commission, the German Federal Cartel Office, and the U.K. Office of Fair Trading (recently replaced by the Competition and Markets Authority) as well as the EU and German courts on the issue of distribution restrictions through the internet in systems of selective distribution.

In general, a system of selective distribution involves a supplier who undertakes to sell the contract products only to distributors meeting certain selection criteria; these distributors then undertake not to resell the products to distributors failing to meet the criteria. Selective distribution is usually used to distribute branded final products, in particular luxury and technically sophisticated goods.

 

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