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ARTICLE · 08 JULY 2024

When Can Protecting The "Customer Experience" Infringe Competition Law?

Gowling WLG
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If a brand owner prevents its authorised resellers from using the internet to make sales, this type of restriction will generally infringe UK or EU competition law...

United KingdomAntitrust/Competition Law
Samuel Beighton
Samuel Beighton
Stefan Dior
Stefan Dior
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If a brand owner prevents its authorised resellers from using the internet to make sales, this type of restriction will generally infringe UK or EU competition law.1

Despite this, competition authorities continue to identify online sales bans, with these types of restriction exposing companies to risks including financial penalties of up to 10% of group worldwide turnover, as well as actions for damages. Under the UK competition law regime, individuals are also exposed to the risk of director disqualification for a period of up to 15 years.

In this article, we take a look at two recent cases where the French competition authority (the "ADLC") fined luxury brand owners for infringing both EU and national competition law by preventing authorised resellers from making online sales. In doing so, the ADLC rejected arguments that these restrictions were necessary to protect the customer experience, as well as the substantial investments made in the brands in question.

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