Online Sales Restrictions Under EU Competition Law

1. Introduction

Online sales restrictions are contractual or commercial restrictions imposed by manufacturers, suppliers, platforms, or dominant undertakings on the ability of distributors or retailers to sell products through the internet.

They may include:

• complete bans on internet sales;
• restrictions on sales through online marketplaces such as Amazon or eBay;
• restrictions on price-comparison websites;
• restrictions on online advertising and search-engine advertising;
• requirements for prior approval before selling online;
• restrictions on selling to customers in other territories;
• restrictions on the use of particular websites or platforms;
• selective-distribution requirements that effectively exclude online-only retailers;
• restrictions designed to direct customers to the supplier's own online store.

Under EU competition law, the principal framework is Article 101 TFEU, together with Regulation (EU) 2022/720 (VBER) and the 2022 Vertical Guidelines. Article 101 prohibits agreements that have the object or effect of restricting competition, while Article 101(3) permits qualifying agreements that produce sufficient efficiency and consumer benefits.

2. Why Online Sales Restrictions Matter

The internet has substantially changed distribution.

Online selling:

1. expands the geographical reach of retailers;
2. increases price transparency;
3. facilitates cross-border sales;
4. enables consumers to compare competing products;
5. allows smaller retailers to reach consumers without physical stores;
6. increases intra-brand competition between authorised distributors.

The European Commission's e-commerce sector inquiry examined approximately 8,000 distribution contracts and found widespread use of restrictions concerning online marketplaces, price comparison tools and the participation of online-only retailers in distribution networks.

Consequently, competition law attempts to balance:

Supplier's legitimate interests
↓
brand image, quality control, customer service, prevention of counterfeits

against

Competition interests
↓
consumer choice, lower prices, cross-border sales, retailer competition and market access.

3. Legal Framework

A. Article 101(1) TFEU

Article 101(1) applies to agreements between undertakings that have as their object or effect the prevention, restriction or distortion of competition and which may affect trade between Member States.

An online-sales restriction can therefore be unlawful where it materially restricts the ability of distributors to compete through the internet.

B. Article 101(3) TFEU

Even if an agreement restricts competition, it may qualify for exemption where it:

• improves production or distribution;
• promotes technical or economic progress;
• gives consumers a fair share of the resulting benefit;
• imposes only indispensable restrictions; and
• does not eliminate competition.

The burden is therefore not simply whether the restriction exists; its economic and legal context matters.

4. Vertical Block Exemption Regulation 2022/720

Regulation (EU) 2022/720 provides a safe harbour for qualifying vertical agreements.

Generally, the VBER applies where both the supplier's and buyer's market shares do not exceed 30%, provided that the agreement does not contain prohibited hardcore restrictions.

Importantly, Article 4(e) treats restrictions that prevent the buyer from making effective use of the internet to sell the contract goods or services as hardcore restrictions, subject to the regulatory framework's specific exceptions.

Thus:

A supplier normally cannot use a distribution agreement simply to eliminate effective internet selling.

5. Main Types of Online Sales Restrictions

A. Complete Internet Sales Ban

The most obvious restriction is a clause preventing authorised distributors from selling products online.

This is particularly problematic because the internet constitutes an important alternative distribution channel.

A complete ban will normally attract very serious Article 101 scrutiny.

B. De Facto Internet Ban

A supplier does not necessarily have to write:

"The distributor may not sell online."

A collection of contractual conditions may have the same practical effect.

Examples include:

• requiring physical stores with expensive specifications;
• requiring disproportionate staffing;
• imposing impossible delivery requirements;
• prohibiting website sales;
• requiring prior individual approval for every online transaction.

The legal analysis therefore focuses on economic substance rather than contractual wording.

6. Online Marketplace Restrictions

A supplier may prohibit or restrict sales through online marketplaces.

For example, a supplier may require an authorised retailer to sell through its own website rather than through Amazon.

Under the 2022 Vertical Guidelines, restrictions on marketplace use can potentially benefit from the VBER if the relevant conditions are satisfied. The Guidelines expressly recognise that suppliers may have legitimate reasons concerning brand positioning, counterfeit prevention, customer relationships and quality standards.

However, the restriction cannot indirectly prevent the effective use of the internet.

The key distinction is therefore:

Marketplace restriction ≠ automatically unlawful

but

Marketplace restriction that effectively prevents internet sales = substantially greater competition concern.

7. Price-Comparison Website Restrictions

Price-comparison services can make it easier for consumers to compare competing retailers.

Restrictions on their use can therefore reduce:

• price transparency;
• consumer search;
• retailer visibility;
• intra-brand price competition.

The 2022 Vertical Guidelines specifically address restrictions concerning price-comparison services as a distinct category of vertical restraint.

The legality depends upon the precise restriction, market structure and economic effects.

8. Online Advertising Restrictions

A supplier may prevent retailers from:

• purchasing Google Ads;
• bidding on brand-related keywords;
• using the supplier's trademark in search advertising;
• advertising particular products online.

Such restrictions can be especially problematic where they substantially reduce the ability of authorised distributors to attract customers.

The Guess case is particularly important in this respect.

9. Territorial Restrictions and Cross-Border Online Sales

Online sales make territorial restrictions particularly significant.

A distributor physically located in France may receive an online order from Germany, for example.

A contractual prohibition on such sales may amount to a restriction of cross-border trade.

Competition law therefore distinguishes between legitimate allocation of distribution territories and restrictions that prevent distributors from responding to unsolicited customer demand through online channels.

10. Selective Distribution and Online Selling

Selective distribution permits a supplier to choose distributors according to specified criteria.

It can legitimately serve objectives such as:

• product quality;
• specialist advice;
• technical assistance;
• luxury-brand positioning;
• customer service.

However, selective distribution cannot automatically be used as a mechanism to eliminate internet competition.

The Commission's guidelines recognise that online restrictions must be assessed within the entire selective-distribution system.

11. Important Case Laws

1. Pierre Fabre Dermo-Cosmétique v Autorité de la concurrence

C-439/09 (2011)

Facts

Pierre Fabre operated a selective distribution system for cosmetics and personal-care products.

Its contracts required products to be sold in physical premises in the presence of a qualified pharmacist.

The practical consequence was that authorised distributors could not effectively sell the products through the internet.

Issue

Whether the restriction constituted a restriction of competition under Article 101(1).

Decision

The Court of Justice held that such a clause could constitute a restriction by object, particularly where it effectively prohibited internet sales and was not objectively justified by the characteristics of the products.

Principle

A supplier cannot disguise an internet-sales prohibition through requirements concerning the physical location or manner of sale.

Importance

Pierre Fabre is the foundational EU case on complete or de facto internet-sales bans.

12. Coty Germany GmbH v Parfümerie Akzente GmbH

C-230/16 (2017)

Facts

Coty operated a selective distribution system for luxury cosmetics.

It prohibited authorised distributors from selling through third-party online marketplaces in a manner that made the marketplace relationship apparent to consumers.

Issue

Whether a marketplace restriction was contrary to Article 101.

Decision

The Court distinguished the marketplace restriction from the complete internet ban considered in Pierre Fabre.

A prohibition on discernible third-party marketplace sales could, in appropriate circumstances, be compatible with Article 101 where it was aimed at preserving the luxury image of the products and applied without discrimination and proportionately.

Principle

A marketplace ban is not automatically equivalent to an internet-sales ban.

Importance

Coty is critical for understanding the distinction between:

prohibiting internet sales
and
regulating the manner in which authorised distributors sell online.

13. ASICS Deutschland Case

The German competition authorities examined restrictions imposed by ASICS on its authorised distributors.

The restrictions included limitations concerning:

• price-comparison websites;
• online marketplace sales;
• the use of the ASICS brand in online advertising.

The restrictions substantially limited distributors' ability to market products online.

The authorities considered that the restrictions were not protected by the applicable vertical block-exemption framework. The EU Commission's review of national online-sales cases records that the restrictions were considered hardcore restraints and that the decision was upheld on appeal.

Principle

A supplier cannot impose a collection of online restrictions that, taken together, substantially impair the distributor's ability to compete online.

Importance

The case illustrates that partial restrictions can collectively amount to a serious restriction of online competition.

14. Guess – European Commission Decision (2018)

Facts

The Commission investigated Guess's distribution arrangements.

Among the restrictions examined were limitations concerning:

• online sales;
• use of Guess trademarks in search advertising;
• prior authorisation for online selling;
• cross-border sales;
• cross-selling between authorised distributors.

Online advertising issue

Guess restricted authorised retailers' ability to use Guess brand names and trademarks for online search advertising.

The Commission considered that this reduced retailers' ability to generate traffic to their websites and thereby affected their ability to sell online.

Principle

Online competition is not limited to the physical act of accepting an internet order.

Visibility and customer acquisition can themselves be essential elements of effective online competition.

Importance

Guess demonstrates that restrictions on online advertising and search visibility can constitute competition restrictions even where distributors are technically permitted to operate websites.

15. Adidas – Online Sales Restrictions

The German competition authorities examined Adidas' distribution restrictions concerning online sales.

The case concerned restrictions that affected authorised retailers' ability to distribute Adidas products through online channels.

The case contributed to the developing European approach that restrictions on internet distribution must be examined according to their practical impact rather than merely their contractual formulation.

Principle

A supplier cannot unnecessarily restrict an important online distribution channel where the restriction significantly reduces distributors' ability to compete.

Importance

The Adidas proceedings are useful when analysing:

• sportswear distribution;
• selective distribution;
• marketplace restrictions;
• online-only retailers;
• brand protection arguments.

The European Commission's compilation of national online-sales cases treats Adidas alongside other important EU online-distribution cases.

16. Nike – Online Distribution Restrictions

Nike was also examined in the European enforcement context concerning restrictions affecting authorised distributors and online sales.

The broader enforcement experience involving branded goods demonstrates the competition concern arising when suppliers combine:

• selective distribution;
• territorial restrictions;
• restrictions on online sales;
• restrictions on advertising;
• limitations on cross-border sales.

Principle

Brand protection does not give a supplier unrestricted authority to control every aspect of an authorised distributor's online activity.

Importance

Nike-related enforcement is particularly relevant to analysing the interaction between:

intellectual-property protection + selective distribution + online competition.

17. Comparison of the Major Cases

18. Objective Justification

An online restriction is not necessarily unlawful merely because it limits a particular method of internet selling.

Relevant considerations can include:

1. Nature of the product

Luxury products, technically complex products and products requiring specialist services may justify certain quality requirements.

2. Legitimate quality requirements

A supplier may impose genuine quality standards concerning:

• presentation;
• customer service;
• product information;
• delivery;
• after-sales assistance.

3. Proportionality

The restriction should not go further than necessary.

4. Market power

The greater the supplier's market power, the greater the potential competition concern.

5. Inter-brand competition

Strong competition between different brands can reduce the competitive significance of certain intra-brand restrictions.

The 2022 Guidelines specifically emphasise the need to assess restrictions according to their context rather than mechanically applying a single rule to every agreement.

19. Market Share and the 30% Safe Harbour

Under the VBER, the general safe harbour requires:

• supplier market share ≤ 30%, and
• buyer market share ≤ 30%.

But the 30% threshold does not mean that every restriction below 30% is automatically lawful.

If the agreement contains a hardcore restriction, the VBER safe harbour can be lost.

Thus:

30% threshold → safe-harbour condition

not:

30% threshold → automatic legality.

20. Online Marketplace Ban: Legal Analysis

A useful examination framework is:

Step 1 — Identify the restriction

Is it:

• total internet ban?
• marketplace ban?
• advertising restriction?
• price-comparison restriction?
• territorial restriction?
• prior-approval requirement?

Step 2 — Identify the parties

Are they:

• supplier and distributor?
• manufacturer and retailer?
• competing undertakings?
• dominant undertaking and retailer?

Step 3 — Define the relevant market

Consider:

• product market;
• geographic market;
• online/offline substitutability;
• brand competition;
• consumer behaviour.

Step 4 — Apply Article 101(1)

Determine whether the restriction has an anti-competitive object or produces restrictive effects.

Step 5 — Examine VBER

Check:

• 30% market-share threshold;
• hardcore restrictions;
• excluded restrictions;
• type of distribution system.

Step 6 — Examine Article 101(3)

Consider:

• efficiencies;
• consumer benefits;
• indispensability;
• remaining competition.

Step 7 — Consider proportionality

Ask whether a less restrictive mechanism could achieve the same legitimate objective.

21. Online Sales Restrictions and Dominant Undertakings

The analysis can also arise under Article 102 TFEU where the undertaking imposing the restriction is dominant.

A dominant undertaking cannot use exclusionary conduct to prevent competitors from accessing customers or distribution channels.

Potential concerns include:

• foreclosure of competing online retailers;
• discriminatory access to online platforms;
• tying online sales to other services;
• exclusionary exclusivity;
• discriminatory ranking;
• refusal of access to essential digital infrastructure.

Article 102 addresses abusive conduct by dominant undertakings, including exclusionary conduct capable of excluding competitors.

22. Relationship with E-Commerce

Online sales restrictions are especially significant because e-commerce changes the competitive structure of distribution.

The Commission's sector inquiry identified:

• increased direct manufacturer-to-consumer sales;
• increased selective distribution;
• marketplace restrictions;
• price-comparison restrictions;
• exclusion of pure online players;
• increased price transparency. 

Therefore, an online restriction may have effects beyond a single contractual relationship.

It can potentially affect the structure of the entire distribution market.

23. Key Distinction: Internet Ban vs Marketplace Ban

This distinction is central.

Internet ban

"The distributor cannot sell the products online."

This is highly problematic and was central to Pierre Fabre.

Marketplace restriction

"The distributor may sell online through its own website but may not use specified third-party marketplaces."

This can potentially be permissible, particularly within a legitimate selective-distribution system, as illustrated by Coty and the 2022 Guidelines.

Therefore, competition law does not treat every online-sales restriction identically.

24. Key Competition Concerns

Online sales restrictions may produce:

A. Reduced intra-brand competition

Authorised distributors have fewer opportunities to compete against each other.

B. Higher prices

Reduced retailer competition can weaken price pressure.

C. Reduced consumer choice

Consumers may have fewer sellers from whom to purchase.

D. Reduced cross-border trade

Territorial restrictions can fragment the internal market.

E. Foreclosure of online-only retailers

Online-only businesses may be excluded from important distribution networks.

F. Reduced price transparency

Restrictions on price-comparison services can make consumer comparison more difficult.

G. Reduced retailer visibility

Restrictions on search advertising can make authorised retailers less discoverable.

25. Defences Available to Suppliers

A supplier may argue that an online restriction is necessary to:

• preserve product quality;
• protect brand reputation;
• prevent counterfeiting;
• ensure specialist customer service;
• maintain appropriate product presentation;
• protect consumers from misleading sales practices;
• ensure proper after-sales support.

These arguments are not automatically sufficient.

The critical question is whether the restriction is genuinely connected to a legitimate objective and proportionate to achieving it.

The 2022 Guidelines expressly recognise legitimate supplier interests in regulating marketplace environments, while also warning against restrictions that prevent effective internet use.

26. Practical Examples

Example 1 — Complete ban

A manufacturer tells every authorised retailer:

"You may sell our products only from physical shops."

High competition concern.

Example 2 — Marketplace restriction

A luxury manufacturer permits online sales but prohibits sales through third-party marketplaces.

Requires contextual analysis.

Coty demonstrates that such a restriction can potentially be compatible with EU competition law.

Example 3 — Search advertising

A manufacturer permits retailers to sell online but prohibits them from purchasing search advertising using the manufacturer's trademarks.

Potential competition concern, particularly where the restriction substantially reduces customer acquisition.

Guess is particularly relevant.

Example 4 — Quality standards

A supplier requires online retailers to provide:

• secure payment;
• adequate product information;
• customer support;
• specified delivery standards.

Such requirements are more likely to be viewed as legitimate where they are objective, proportionate and genuinely connected to quality.

27. Six Core Case Laws to Remember for Examination

For a short-answer or examination response, the following six cases provide a strong foundation:

1. Pierre Fabre Dermo-Cosmétique v Autorité de la concurrence, C-439/09 — de facto prohibition of internet sales.
2. Coty Germany GmbH v Parfümerie Akzente GmbH, C-230/16 — restrictions on third-party online marketplaces.
3. ASICS Deutschland — restrictions involving marketplaces, price-comparison services and online advertising.
4. Guess, European Commission, 2018 — online sales and search-advertising restrictions.
5. Adidas — restrictions affecting online distribution in selective distribution.
6. Nike — restrictions concerning online distribution and authorised distribution networks.

The first two are particularly important CJEU authorities, while the latter cases illustrate the practical enforcement of EU competition principles at Commission and national-authority level.

28. Conclusion

Online sales restrictions occupy an important position in modern EU competition law because the internet is a major channel for distribution and cross-border trade.

The basic legal approach can be summarised as:

Internet sales restriction
↓
Article 101(1) TFEU
↓
VBER 2022 / 30% safe harbour
↓
Check hardcore or excluded restriction
↓
Assess legitimate objectives and proportionality
↓
Article 101(3) efficiency analysis where applicable
↓
Consider Article 102 where a dominant undertaking is involved

The central lesson from Pierre Fabre, Coty, ASICS and Guess is that competition law distinguishes between legitimate regulation of online distribution and restrictions that effectively eliminate or substantially impair online competition. The 2022 VBER and Vertical Guidelines now provide the principal framework for making that distinction.Online Sales Restrictions Under EU Competition Law

1. Introduction

Online sales restrictions are contractual or commercial restrictions imposed by manufacturers, suppliers, platforms, or dominant undertakings on the ability of distributors or retailers to sell products through the internet.

They may include:

• complete bans on internet sales;
• restrictions on sales through online marketplaces such as Amazon or eBay;
• restrictions on price-comparison websites;
• restrictions on online advertising and search-engine advertising;
• requirements for prior approval before selling online;
• restrictions on selling to customers in other territories;
• restrictions on the use of particular websites or platforms;
• selective-distribution requirements that effectively exclude online-only retailers;
• restrictions designed to direct customers to the supplier's own online store.

Under EU competition law, the principal framework is Article 101 TFEU, together with Regulation (EU) 2022/720 (VBER) and the 2022 Vertical Guidelines. Article 101 prohibits agreements that have the object or effect of restricting competition, while Article 101(3) permits qualifying agreements that produce sufficient efficiency and consumer benefits.

2. Why Online Sales Restrictions Matter

The internet has substantially changed distribution.

Online selling:

1. expands the geographical reach of retailers;
2. increases price transparency;
3. facilitates cross-border sales;
4. enables consumers to compare competing products;
5. allows smaller retailers to reach consumers without physical stores;
6. increases intra-brand competition between authorised distributors.

The European Commission's e-commerce sector inquiry examined approximately 8,000 distribution contracts and found widespread use of restrictions concerning online marketplaces, price comparison tools and the participation of online-only retailers in distribution networks.

Consequently, competition law attempts to balance:

Supplier's legitimate interests
↓
brand image, quality control, customer service, prevention of counterfeits

against

Competition interests
↓
consumer choice, lower prices, cross-border sales, retailer competition and market access.

3. Legal Framework

A. Article 101(1) TFEU

Article 101(1) applies to agreements between undertakings that have as their object or effect the prevention, restriction or distortion of competition and which may affect trade between Member States.

An online-sales restriction can therefore be unlawful where it materially restricts the ability of distributors to compete through the internet.

B. Article 101(3) TFEU

Even if an agreement restricts competition, it may qualify for exemption where it:

• improves production or distribution;
• promotes technical or economic progress;
• gives consumers a fair share of the resulting benefit;
• imposes only indispensable restrictions; and
• does not eliminate competition.

The burden is therefore not simply whether the restriction exists; its economic and legal context matters.

4. Vertical Block Exemption Regulation 2022/720

Regulation (EU) 2022/720 provides a safe harbour for qualifying vertical agreements.

Generally, the VBER applies where both the supplier's and buyer's market shares do not exceed 30%, provided that the agreement does not contain prohibited hardcore restrictions.

Importantly, Article 4(e) treats restrictions that prevent the buyer from making effective use of the internet to sell the contract goods or services as hardcore restrictions, subject to the regulatory framework's specific exceptions.

Thus:

A supplier normally cannot use a distribution agreement simply to eliminate effective internet selling.

5. Main Types of Online Sales Restrictions

A. Complete Internet Sales Ban

The most obvious restriction is a clause preventing authorised distributors from selling products online.

This is particularly problematic because the internet constitutes an important alternative distribution channel.

A complete ban will normally attract very serious Article 101 scrutiny.

B. De Facto Internet Ban

A supplier does not necessarily have to write:

"The distributor may not sell online."

A collection of contractual conditions may have the same practical effect.

Examples include:

• requiring physical stores with expensive specifications;
• requiring disproportionate staffing;
• imposing impossible delivery requirements;
• prohibiting website sales;
• requiring prior individual approval for every online transaction.

The legal analysis therefore focuses on economic substance rather than contractual wording.

6. Online Marketplace Restrictions

A supplier may prohibit or restrict sales through online marketplaces.

For example, a supplier may require an authorised retailer to sell through its own website rather than through Amazon.

Under the 2022 Vertical Guidelines, restrictions on marketplace use can potentially benefit from the VBER if the relevant conditions are satisfied. The Guidelines expressly recognise that suppliers may have legitimate reasons concerning brand positioning, counterfeit prevention, customer relationships and quality standards.

However, the restriction cannot indirectly prevent the effective use of the internet.

The key distinction is therefore:

Marketplace restriction ≠ automatically unlawful

but

Marketplace restriction that effectively prevents internet sales = substantially greater competition concern.

7. Price-Comparison Website Restrictions

Price-comparison services can make it easier for consumers to compare competing retailers.

Restrictions on their use can therefore reduce:

• price transparency;
• consumer search;
• retailer visibility;
• intra-brand price competition.

The 2022 Vertical Guidelines specifically address restrictions concerning price-comparison services as a distinct category of vertical restraint.

The legality depends upon the precise restriction, market structure and economic effects.

8. Online Advertising Restrictions

A supplier may prevent retailers from:

• purchasing Google Ads;
• bidding on brand-related keywords;
• using the supplier's trademark in search advertising;
• advertising particular products online.

Such restrictions can be especially problematic where they substantially reduce the ability of authorised distributors to attract customers.

The Guess case is particularly important in this respect.

9. Territorial Restrictions and Cross-Border Online Sales

Online sales make territorial restrictions particularly significant.

A distributor physically located in France may receive an online order from Germany, for example.

A contractual prohibition on such sales may amount to a restriction of cross-border trade.

Competition law therefore distinguishes between legitimate allocation of distribution territories and restrictions that prevent distributors from responding to unsolicited customer demand through online channels.

10. Selective Distribution and Online Selling

Selective distribution permits a supplier to choose distributors according to specified criteria.

It can legitimately serve objectives such as:

• product quality;
• specialist advice;
• technical assistance;
• luxury-brand positioning;
• customer service.

However, selective distribution cannot automatically be used as a mechanism to eliminate internet competition.

The Commission's guidelines recognise that online restrictions must be assessed within the entire selective-distribution system.

11. Important Case Laws

1. Pierre Fabre Dermo-Cosmétique v Autorité de la concurrence

C-439/09 (2011)

Facts

Pierre Fabre operated a selective distribution system for cosmetics and personal-care products.

Its contracts required products to be sold in physical premises in the presence of a qualified pharmacist.

The practical consequence was that authorised distributors could not effectively sell the products through the internet.

Issue

Whether the restriction constituted a restriction of competition under Article 101(1).

Decision

The Court of Justice held that such a clause could constitute a restriction by object, particularly where it effectively prohibited internet sales and was not objectively justified by the characteristics of the products.

Principle

A supplier cannot disguise an internet-sales prohibition through requirements concerning the physical location or manner of sale.

Importance

Pierre Fabre is the foundational EU case on complete or de facto internet-sales bans.

12. Coty Germany GmbH v Parfümerie Akzente GmbH

C-230/16 (2017)

Facts

Coty operated a selective distribution system for luxury cosmetics.

It prohibited authorised distributors from selling through third-party online marketplaces in a manner that made the marketplace relationship apparent to consumers.

Issue

Whether a marketplace restriction was contrary to Article 101.

Decision

The Court distinguished the marketplace restriction from the complete internet ban considered in Pierre Fabre.

A prohibition on discernible third-party marketplace sales could, in appropriate circumstances, be compatible with Article 101 where it was aimed at preserving the luxury image of the products and applied without discrimination and proportionately.

Principle

A marketplace ban is not automatically equivalent to an internet-sales ban.

Importance

Coty is critical for understanding the distinction between:

prohibiting internet sales
and
regulating the manner in which authorised distributors sell online.

13. ASICS Deutschland Case

The German competition authorities examined restrictions imposed by ASICS on its authorised distributors.

The restrictions included limitations concerning:

• price-comparison websites;
• online marketplace sales;
• the use of the ASICS brand in online advertising.

The restrictions substantially limited distributors' ability to market products online.

The authorities considered that the restrictions were not protected by the applicable vertical block-exemption framework. The EU Commission's review of national online-sales cases records that the restrictions were considered hardcore restraints and that the decision was upheld on appeal.

Principle

A supplier cannot impose a collection of online restrictions that, taken together, substantially impair the distributor's ability to compete online.

Importance

The case illustrates that partial restrictions can collectively amount to a serious restriction of online competition.

14. Guess – European Commission Decision (2018)

Facts

The Commission investigated Guess's distribution arrangements.

Among the restrictions examined were limitations concerning:

• online sales;
• use of Guess trademarks in search advertising;
• prior authorisation for online selling;
• cross-border sales;
• cross-selling between authorised distributors.

Online advertising issue

Guess restricted authorised retailers' ability to use Guess brand names and trademarks for online search advertising.

The Commission considered that this reduced retailers' ability to generate traffic to their websites and thereby affected their ability to sell online.

Principle

Online competition is not limited to the physical act of accepting an internet order.

Visibility and customer acquisition can themselves be essential elements of effective online competition.

Importance

Guess demonstrates that restrictions on online advertising and search visibility can constitute competition restrictions even where distributors are technically permitted to operate websites.

15. Adidas – Online Sales Restrictions

The German competition authorities examined Adidas' distribution restrictions concerning online sales.

The case concerned restrictions that affected authorised retailers' ability to distribute Adidas products through online channels.

The case contributed to the developing European approach that restrictions on internet distribution must be examined according to their practical impact rather than merely their contractual formulation.

Principle

A supplier cannot unnecessarily restrict an important online distribution channel where the restriction significantly reduces distributors' ability to compete.

Importance

The Adidas proceedings are useful when analysing:

• sportswear distribution;
• selective distribution;
• marketplace restrictions;
• online-only retailers;
• brand protection arguments.

The European Commission's compilation of national online-sales cases treats Adidas alongside other important EU online-distribution cases.

16. Nike – Online Distribution Restrictions

Nike was also examined in the European enforcement context concerning restrictions affecting authorised distributors and online sales.

The broader enforcement experience involving branded goods demonstrates the competition concern arising when suppliers combine:

• selective distribution;
• territorial restrictions;
• restrictions on online sales;
• restrictions on advertising;
• limitations on cross-border sales.

Principle

Brand protection does not give a supplier unrestricted authority to control every aspect of an authorised distributor's online activity.

Importance

Nike-related enforcement is particularly relevant to analysing the interaction between:

intellectual-property protection + selective distribution + online competition.

17. Comparison of the Major Cases

18. Objective Justification

An online restriction is not necessarily unlawful merely because it limits a particular method of internet selling.

Relevant considerations can include:

1. Nature of the product

Luxury products, technically complex products and products requiring specialist services may justify certain quality requirements.

2. Legitimate quality requirements

A supplier may impose genuine quality standards concerning:

• presentation;
• customer service;
• product information;
• delivery;
• after-sales assistance.

3. Proportionality

The restriction should not go further than necessary.

4. Market power

The greater the supplier's market power, the greater the potential competition concern.

5. Inter-brand competition

Strong competition between different brands can reduce the competitive significance of certain intra-brand restrictions.

The 2022 Guidelines specifically emphasise the need to assess restrictions according to their context rather than mechanically applying a single rule to every agreement.

19. Market Share and the 30% Safe Harbour

Under the VBER, the general safe harbour requires:

• supplier market share ≤ 30%, and
• buyer market share ≤ 30%.

But the 30% threshold does not mean that every restriction below 30% is automatically lawful.

If the agreement contains a hardcore restriction, the VBER safe harbour can be lost.

Thus:

30% threshold → safe-harbour condition

not:

30% threshold → automatic legality.

20. Online Marketplace Ban: Legal Analysis

A useful examination framework is:

Step 1 — Identify the restriction

Is it:

• total internet ban?
• marketplace ban?
• advertising restriction?
• price-comparison restriction?
• territorial restriction?
• prior-approval requirement?

Step 2 — Identify the parties

Are they:

• supplier and distributor?
• manufacturer and retailer?
• competing undertakings?
• dominant undertaking and retailer?

Step 3 — Define the relevant market

Consider:

• product market;
• geographic market;
• online/offline substitutability;
• brand competition;
• consumer behaviour.

Step 4 — Apply Article 101(1)

Determine whether the restriction has an anti-competitive object or produces restrictive effects.

Step 5 — Examine VBER

Check:

• 30% market-share threshold;
• hardcore restrictions;
• excluded restrictions;
• type of distribution system.

Step 6 — Examine Article 101(3)

Consider:

• efficiencies;
• consumer benefits;
• indispensability;
• remaining competition.

Step 7 — Consider proportionality

Ask whether a less restrictive mechanism could achieve the same legitimate objective.

21. Online Sales Restrictions and Dominant Undertakings

The analysis can also arise under Article 102 TFEU where the undertaking imposing the restriction is dominant.

A dominant undertaking cannot use exclusionary conduct to prevent competitors from accessing customers or distribution channels.

Potential concerns include:

• foreclosure of competing online retailers;
• discriminatory access to online platforms;
• tying online sales to other services;
• exclusionary exclusivity;
• discriminatory ranking;
• refusal of access to essential digital infrastructure.

Article 102 addresses abusive conduct by dominant undertakings, including exclusionary conduct capable of excluding competitors.

22. Relationship with E-Commerce

Online sales restrictions are especially significant because e-commerce changes the competitive structure of distribution.

The Commission's sector inquiry identified:

• increased direct manufacturer-to-consumer sales;
• increased selective distribution;
• marketplace restrictions;
• price-comparison restrictions;
• exclusion of pure online players;
• increased price transparency. 

Therefore, an online restriction may have effects beyond a single contractual relationship.

It can potentially affect the structure of the entire distribution market.

23. Key Distinction: Internet Ban vs Marketplace Ban

This distinction is central.

Internet ban

"The distributor cannot sell the products online."

This is highly problematic and was central to Pierre Fabre.

Marketplace restriction

"The distributor may sell online through its own website but may not use specified third-party marketplaces."

This can potentially be permissible, particularly within a legitimate selective-distribution system, as illustrated by Coty and the 2022 Guidelines.

Therefore, competition law does not treat every online-sales restriction identically.

24. Key Competition Concerns

Online sales restrictions may produce:

A. Reduced intra-brand competition

Authorised distributors have fewer opportunities to compete against each other.

B. Higher prices

Reduced retailer competition can weaken price pressure.

C. Reduced consumer choice

Consumers may have fewer sellers from whom to purchase.

D. Reduced cross-border trade

Territorial restrictions can fragment the internal market.

E. Foreclosure of online-only retailers

Online-only businesses may be excluded from important distribution networks.

F. Reduced price transparency

Restrictions on price-comparison services can make consumer comparison more difficult.

G. Reduced retailer visibility

Restrictions on search advertising can make authorised retailers less discoverable.

25. Defences Available to Suppliers

A supplier may argue that an online restriction is necessary to:

• preserve product quality;
• protect brand reputation;
• prevent counterfeiting;
• ensure specialist customer service;
• maintain appropriate product presentation;
• protect consumers from misleading sales practices;
• ensure proper after-sales support.

These arguments are not automatically sufficient.

The critical question is whether the restriction is genuinely connected to a legitimate objective and proportionate to achieving it.

The 2022 Guidelines expressly recognise legitimate supplier interests in regulating marketplace environments, while also warning against restrictions that prevent effective internet use.

26. Practical Examples

Example 1 — Complete ban

A manufacturer tells every authorised retailer:

"You may sell our products only from physical shops."

High competition concern.

Example 2 — Marketplace restriction

A luxury manufacturer permits online sales but prohibits sales through third-party marketplaces.

Requires contextual analysis.

Coty demonstrates that such a restriction can potentially be compatible with EU competition law.

Example 3 — Search advertising

A manufacturer permits retailers to sell online but prohibits them from purchasing search advertising using the manufacturer's trademarks.

Potential competition concern, particularly where the restriction substantially reduces customer acquisition.

Guess is particularly relevant.

Example 4 — Quality standards

A supplier requires online retailers to provide:

• secure payment;
• adequate product information;
• customer support;
• specified delivery standards.

Such requirements are more likely to be viewed as legitimate where they are objective, proportionate and genuinely connected to quality.

27. Six Core Case Laws to Remember for Examination

For a short-answer or examination response, the following six cases provide a strong foundation:

1. Pierre Fabre Dermo-Cosmétique v Autorité de la concurrence, C-439/09 — de facto prohibition of internet sales.
2. Coty Germany GmbH v Parfümerie Akzente GmbH, C-230/16 — restrictions on third-party online marketplaces.
3. ASICS Deutschland — restrictions involving marketplaces, price-comparison services and online advertising.
4. Guess, European Commission, 2018 — online sales and search-advertising restrictions.
5. Adidas — restrictions affecting online distribution in selective distribution.
6. Nike — restrictions concerning online distribution and authorised distribution networks.

The first two are particularly important CJEU authorities, while the latter cases illustrate the practical enforcement of EU competition principles at Commission and national-authority level.

28. Conclusion

Online sales restrictions occupy an important position in modern EU competition law because the internet is a major channel for distribution and cross-border trade.

The basic legal approach can be summarised as:

Internet sales restriction
↓
Article 101(1) TFEU
↓
VBER 2022 / 30% safe harbour
↓
Check hardcore or excluded restriction
↓
Assess legitimate objectives and proportionality
↓
Article 101(3) efficiency analysis where applicable
↓
Consider Article 102 where a dominant undertaking is involved

The central lesson from Pierre Fabre, Coty, ASICS and Guess is that competition law distinguishes between legitimate regulation of online distribution and restrictions that effectively eliminate or substantially impair online competition. The 2022 VBER and Vertical Guidelines now provide the principal framework for making that distinction.