Banning retail sales of goods online, even for seemingly sound business
reasons, is likely to violate EU and UK antitrust/competition law,
McGuireWoods London partner
Matthew Hall wrote in his
for the July 2019 issue of the American Bar Association’s International Antitrust Bulletin.
The column discussed a decision by UK regulators that golf equipment maker
Ping Europe Limited’s practice of selling its custom-fitted clubs only
through face-to-face transactions is anticompetitive. The Competition and
Markets Authority (CMA) ruled in 2017 that Ping breached EU and UK
competition law by banning authorized Ping retailers from selling its clubs
online, and levied a £1.45 million ($1.76 million U.S.) fine.
Ping appealed to the Competition Appeal Tribunal, arguing that in-person
fittings ensure customer choice and quality, are essential to its business
and are impossible via internet sales. The tribunal upheld the CMA, ruling
that Ping’s prohibition constituted an “object restriction” of competition
law, rendering moot Ping’s assertion that online sales would force the
company to sell a product it doesn’t wish to sell: nonfitted clubs.
Hall wrote that the Ping decision that the online sales ban was an
automatic violation of UK and EU law isn’t surprising, given numerous
supporting precedents, including European Court of Justice rulings.
“Clearly, the case again puts companies on notice throughout the EU that an
online sales ban is a dangerous provision to implement,” wrote Hall, a vice
chair of the International Committee of the ABA Section of Antitrust Law.