Sector insights

International Competition Update | January 2018


Written on 29 January 2018

 

As we welcome in 2018, we look back on a year gone by that was dominated by discussions on selective distribution prompted by the growing body of case law on the topic, culminating in the Coty decision handed down on 6 December 2017. The decision confirmed that restricting sales on third-party market places such as Amazon and eBay where the supplier itself does not sell on these platforms can be permissible, although an absolute prohibition on online sales remains unjustifiable.

While Coty has provided some welcome clarification, in 2018, attention will turn to the way that this decision is interpreted by the authorities. The German Competition Authority, for instance, has already been vocal that the decision only applies to luxury brands, and whether or not other authorities support or challenge this interpretation will be a point to keep an eye on this year.

In addition to the on-going ramifications of the Coty decision, it will be worth keeping an eye on the following in 2018:

·         E-commerce and the extent to which cross-border e-commerce is being hindered. New rules on geo-blocking are set to come in by the end of this year, as part of an attempt to lessen discrimination against customers in other Member States. The Commission’s scrutiny of other practices which may be hindering cross border sales online is expected to trigger new cases in 2018 following the close of its enquiry into e-commerce last year.

·         Anticompetitive behaviour, including excessive pricing, in the pharmaceutical industry will continue to be an enforcement priority, following two years of active enforcement by competition authorities. With the European Commission opening a formal investigation into Aspen last year, and the CMA launching four investigations in October alone, it is likely that the practices of pharmaceutical companies will continue to be under the spotlight this year.

·         The extent to which dominant companies can offer rebates is likely to continue to provoke discussion following the CJEU’s finding in the Intel case in September 2017, which appeared to move away from a long line of case law that suggested certain rebates are automatically unlawful so that the actual effects on competition needed to be considered. Like Coty, the interpretation of this finding by competition authorities will be of interest this year: already the Italian Competition Authority has interpreted the decision strictly, finding reason not to apply the economic impact test to single-branding obligations.

·         The progression of damages actions is expected to continue, with the last of the member states to implement the Damages Directive in the final stages of doing so. The impact of the Directive will be one to watch this year, as the regimes based on the directive are examined in each member state, and questions of interpretation potentially referred to the CJEU.

The progress of the Brexit negotiations and its impact on competition and state aid in the UK will of course also be a key focus. The Industrial Strategy White Paper published in November 2017 set out a vision of a future business environment in the UK with “Sector Deals” at the heart of the strategy. This focus on the partnerships between the government and industry is predicated on the expectation of more relaxed state aid rules following the UK’s departure from the EU, but the outcome of what will undoubtedly be a contentious point of negotiation remains to be seen.

Finally, as 2018 pushes us further into a world of smart cities and connected consumers, companies will need to begin to think about the legal challenges that new technologies pose, and whether they are ready to meet these challenges, while law makers actively consider how far the law is fit for purpose in regulating them. The advent of the connected car is but one development which will prompt competition concerns, and while the legal questions may be more familiar than the technology than precipitates them, companies will need to ensure that they keep a firm eye on the law as their technology develops.

The eagerly anticipated Coty-judgment is out | what does it mean for online distribution?

On 6 December 2017, the CJEU published its long-awaited judgment in the Coty case. Finding in favour of Coty, the court ruled that selective distribution networks are permissible in certain circumstances and that suppliers using selective distribution have the ability to restrict selling on third-party marketplaces.

Read more or watch our experts discuss the implications of this decision.

Italian Competition Authority fines Unilever for exclusivity obligations and fidelity inducing rebates in the ice cream sector

Following the long-awaited judgment of the European Court of Justice in the Intel case, which heralded a more lenient approach to rebates,the fining of Unilever by the Italian Competition Authority is notable for the strict interpretation by the ICA of when to apply an economic impact test.

Read more > 

France | Competition litigation in 2018

In this article published in the international comparative legal guides, Osborne Clarke’s Alexandre Glatz and Charles Meteaut discuss the competition litigation environment in 2018.

Read the article in full here.

UK government unveils new Industrial Strategy | tackling the four “Grand Challenges”

The government’s long-awaited Industrial Strategy White Paper was published on 27 November 2017.  The paper focuses on how to boost the productivity and earning power of the UK, with a strong focus on innovation and future technologies. The paper seeks to look beyond Brexit to laying the foundations for a globally successful, innovative, digitised and highly skilled future for the UK potentially predicated, in part, on the expectation of more relaxed state aid rules following the UK’s departure from the UK.

Read more >

Connected cars and competition law

Nicolas Otegui examines in this article the legal issues that are posed by the “connected car” and who might be affected, as well as whether the current law is fit for purpose in the advent of technological change.

Read more >

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*This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.