Matthew Hall Addresses Antitrust Perils of Banning Online Product Sales

August 6, 2019

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 column 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.