The French Competition Authority has fined Bikeurope €250,000 for restricting online sales of its bicycles by its distributors.
In its decision of 01 July 2019, the French Competition Authority (the FCA) evaluates practices implemented by a bike manufacturer to restrict the online sale of its products within the EU.
Given an increasing number of selective distribution networks, the only distribution channels which enable to regulate online sales to some extent, the FCA is sending a powerful signal that it is not possible to directly or indirectly restrict the ability of distributors to sell products on their own websites.
Bikeurope is a company that assembles, sells and distributes high-end bicycles through a network of authorised distributors. Between 2007 and 2014, it introduced specific provisions in its general terms and conditions of sale which indirectly prohibit online sales.
More specifically, although distributors were allowed, under certain constraints, to develop a website and advertise products online, in practice Bikeurope’s general terms and conditions of sale explicitly required them to resell (or deliver) the products at the point of sale declared to the supplier, ie the distributor's physical warehouse.
According to the FCA, "as soon as the consumer has to go beyond the area in which he is normally willing to travel to make a purchase, the general terms and conditions of sale remove de facto the essential advantages of selling on the Internet and therefore always amount to a prohibition of these sale terms".
The respect of this prohibition was guaranteed by a monitoring system of the authorised distributors. Those who did not comply with these rules were threatened by the possibility of their contractual relations terminated.
Bikeurope argued that the obligation to deliver in store was imposed by French regulations on the prevention of risks resulting from the use of bicycles, which stipulate that bicycles must only be distributed fully assembled by the book.
However, the FCA noted that these requirements laid down by a 1995 decree did not prohibit distance selling and that they did not require assembly and adjustments to be carried out in the presence of the buyer.
According to the FCA, these practices lasted for nearly seven years. However, the FCA took into account of the uncertainty as to the qualification of a prohibition of online sales by law and case law before the 2011 judgement of the EU Court of Justice “Pierre Fabre”. The FCA also outlined the limited damage to the economy and derogated from the application of the sanctions notice by imposing a moderate fine of €250,000.
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