Cartel Office Cracks Down on Internet Sale Restrictions

Manufacturers of brand products have never been exceptionally happy with sales conducted via the internet, given that prices for products sold online are generally lower than is the case in ordinary retail stores. A number of manufacturers consequently try to restrict or prohibit the sale of their products via the internet. This is legally problematic. Thus the Federal Cartel Office recently objected to two manufacturers of sports shoes attempting to prohibit the sale of their products via online platforms. While the distributors were permitted to sell products via their own internet platforms, they were not allowed to support price machines. The Federal Cartel Office considered this to be an impediment to internet sales, with the objective of restricting competitive pricing. One of the manufacturers has meanwhile ceased the conduct complained of; the other manufacturer is still negotiating with the Federal Cartel Office.

In another matter, a manufacturer of sanitary products was convicted for restricting online sales, as it had practically compelled its wholesalers to provide products only to ordinary retailers by way of the functioning of the applicable discount-conditions. The distribution contract provided for an additional discount only for and in relation to turnover generated with retailers in ordinary brick-and-mortar stores. Pursuant to a lawsuit initiated by a disadvantaged online trader, the Higher Regional Court of Düsseldorf sentenced the manufacturer to damages in the amount of EUR 820,000. The managing director was also convicted, given that he was personally liable for the cartel violation on account of being responsible for the distribution of the products.