Since the landmark Pierre Fabre decision, there is no longer any doubt that imposing a blanket prohibition on selling via internet in a selective distribution network will constitute an impermissible restriction of competition. A recent French decision has likely broadened the scope of this restriction in selective distribution.
In November 2014, the Caudalie cosmetics company applied for an injunction against the "1001pharmacies.com" marketplace platform to prohibit them from selling Caudalie personal care and beauty products via their on-line website on the grounds that 1001pharmacies.com was not an approved distributor of Caudalie, that those pharmacies which were approved Caudalie distributors were authorized to sell on-line only via their own internet sites, as opposed to via an on-line marketplace, and therefore that the activity of 1001pharmacies.com was manifestly illicit. The injunction sought was granted by the Paris Commercial Court in December 2014.
1001pharmacies.com appealed, citing, among other things, recent decisions of the French and German Competition Authorities in favor of on-line marketplaces. In February, the Paris Court of Appeal overturned the lower court's injunction, ruling that a blanket prohibition to sell online via a marketplace platform may wellconstitute an impermissible restriction of competition.
The Court's reasoning clearly goes in the direction of prohibiting brands using selective distribution networks from outright banning marketplace retailers from carrying their products. In the luxury space, this could have far-reaching implications for brand owners, who will at the very least need to devise clear qualitative criteria for on-line distribution if they want to be able to maintain control over the websites on which their products can be sold.