On 9 June 2016, the Competition and Markets Authority (‘CMA’) issued a Statement of Objections to Ping Europe Limited, a European subsidiary of US-based golf equipment manufacturer Ping. This follows a seven-month investigation initiated in November 2015.
The CMA alleges that Ping breached antitrust rules by preventing its distributors from selling its golf clubs online, in what the regulator says may have been an attempt to stifle online competition to benefit bricks-and-mortal retailers.
The CMA reiterated that while “suppliers may be tempted” to restrict online competition, retailers must not be “unduly restricted”.
Online sales channels
In its announcement, the CMA noted that the internet was an increasingly important distribution channel that had stimulated competition amongst resellers to the benefit of consumers, and that the use of that channel should not be unjustifiably restricted.
This allegation comes amidst increased scrutiny of online sales channels and vertical agreements generally by the CMA. It comes only a few weeks after the UK watchdog imposed large fines on a fridge supplier and on a supplier of bathroom fittings for enforcing minimum online resale prices.
Companies that restrict online sales in the UK - in any sector - should carefully consider justifications for doing so and assess whether these are compliant with competition law.
Ping will now have an opportunity to respond to the allegation before the CMA reaches its final conclusion.