The ECJ has given a preliminary ruling following a reference from the Paris Court of Appeal, with regards to whether certain selective distribution agreements containing an absolute ban on internet sales of cosmetics and personal care products to consumers breached Article 101 TFEU.
The agreements contained a requirement that all sales be made in a physical space in the presence of a qualified pharmacist. The ECJ considered this amounted to a de facto prohibition from any form of internet selling, which was liable to be restrictive of competition (by “object”) as it significantly undermined the ability of distributors to sell to consumers outside their contractual territory, unless it could be objectively justified. The enquiry into “objective justification” of a particular clause, said the ECJ, should involve an individual and specific examination of the content and objective of the clause, in its legal and economic context (which includes the properties of the products in question).
Having considered that an absolute ban on internet selling was contrary to Article 101(1) TFEU, the ECJ then commented on the potential application of the automatic exemption granted by the safe harbour under the EU Vertical Agreements Block Exemption Regulation (VABE). The ECJ noted that a general and absolute ban on internet sales restricted active and passive sales, with the effect that the VABE could not apply. The ECJ commented that it did not have sufficient information to provide a preliminary ruling or guidance on the potential for individual exemption under Article 101(3) TFEU.