FCO continues strict approach towards online sales restrictions

The German Federal Cartel Office ("FCO") on 12 April 2021 published a press release according to which household appliances manufacturer Liebherr abandoned certain clauses in its conditions of distribution that in view of the FCO put online sales at a disadvantage. Liebherr primarily sells its household appliances in a selective distribution system via authorised distributors. In the beginning of this year, Liebherr introduced new requirements for its distributors including a performance rebate. Following complaints from market participants the FCO investigated these new conditions. 

The FCO found that the criteria for online shops were stricter compared to offline ("brick and mortar") sales, including staff availability on Sundays and holidays between 9am and 8pm, the delivery period for ordered products that are not in stock as well as the offered range of payment methods. Because so-called "hybrid" distributors with online shops as well as brick and mortar stores had to fully comply with both the criteria for online as well as offline sales to benefit from the new rebate scheme, according to the FCO the changes put them at the same disadvantage as pure online distributors. 

Based on the FCO's preliminary assessment, the differentiation between online and offline sales had the potential to make the price-focused online distribution economically less attractive, weakening the intra-brand competition between Liebherr distributors. 

The FCO's strict approach in this case does not come as a surprise and goes hand in hand with its practice in prior proceedings (e.g. against ASICS, adidas, Scout, Coty etc.). All of these cases have at their core the same conflict of interest. On the one hand, brand manufacturers have to ensure to uphold and cultivate a certain brand image. On the other hand, the FCO has the objective to avoid a discrimination of e-commerce due to its significant competition potential for consumers. In the midst of discussions regarding changes to the regulatory framework at EU level, the FCO sets a sign and underlines its pioneering role with regard to online sales restrictions. It remains to be seen if the European legislator will follow the FCO's lead or introduce more flexible rules balancing out the conflicting interests more equally. For manufacturers, the FCO's continued approach could in the future even lead to new alternative distribution models.