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Competition Law

Analysis - debate - current awareness

19 MAY 2014

Run, Competition Law, Run!

John Cassels

Partner

Run, Competition Law, Run!

A few weeks ago, the German competition law regulator, the 'Bundeskartellamt', set out its preliminary view that the way sports footwear manufacturer Asics distributed its products to consumers restricted competition.


Many companies throughout the EU sell their products to distributors usually through exclusive or selective supply channels. In this instance, Asics was reported to be using a selective distribution system. In summary, in selective distribution systems the supplier (Asics) agrees to appoint distributors according to specified criteria. There are additional restrictions that can be imposed by suppliers like Asics on distributors including the restriction of sales to unauthorised distributors.


One important restriction that the Commission and national competition regulators have identified as a hot topic relates to banning sales of products through particular internet platforms. In this case, it is alleged that Asics banned their resellers from using online marketplaces, eBay and Amazon to sell Asics shoes.


The German regulator believes such a ban would be classified as a 'hard-core' competition law restriction. Interestingly, it is believed sportswear company Adidas is also under investigation with regard to their online distribution agreements.
However, the Bundeskartellamt appears to have offered an olive-branch to Asics and Adidas by stating that:


“If manufacturers have concrete questions on how to create a selective distribution system in line with competition law, the Bundeskartellamt is also available for discussions and to review suggestions."


This suggests that an amicable resolution to its investigation may be possible. Indeed, Asics announced that it had already started drafting changes to its current distribution system. It appears likely that such an investigation will end in changes to the way both sportswear companies sell their goods in the EU.


If you would like to discuss any of these issues please do not hesitate to contact us.

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