Limiting sales by distributors through third party platforms is highly topical in the EU and particularly in Germany where the German Competition Authority and the Courts have taken different positions.

The issue is whether a supplier may prohibit its selective distributors from using third party internet platforms for the sale of its goods.

While the German Competition Authority regards such restrictions as prohibited vertical restraints[1], the German Courts tend to find that suppliers of branded goods are in principle free to decide under which conditions its products are sold, provided that these conditions are necessary to meet its quality standards.

Very recently the Court of Appeal (“Oberlandesgericht”) of Frankfurt has asked the European Court of Justice (“ECJ”) to clarify the application of competition rules to online sales and whether a distributor within a selective distribution system can be prohibited from selling on online marketplaces[2].

The decision of the ECJ on the legality of prohibitions imposed by suppliers on their selective distributors to sell via third party online platforms, will give a long awaited clarification on this issue. The practical relevance will be considerable given the fact that many luxury brand suppliers have implemented a selective distribution system over the years and may often also restrict their distributors in relation to sales through third party online platforms like Amazon or eBay.

[1] Article 4 (c) EU Regulation 330/2010

[2] ECJ, C-230/16