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Ban on internet sales breaches competition law

10/09/18

In a judgment handed down on 7 September 2018, the CAT upheld the CMA’s decision finding that Ping Europe Ltd infringed Article 101 TFEU and the Chapter I prohibition of the Competition Act 1998 by prohibiting its authorised retailers from selling its golf clubs online. 

The CAT held that the CMA was right to find that Ping’s internet policy was a restriction of competition by object and that it failed to qualify for exemption under Article 101(3) and set out the legal principles to be applied when assessing internet sales restrictions.  In so holding, the CAT dismissed Ping’s arguments that the CMA had erred in finding the ban on internet selling was disproportionate, was not objectively justified and did not constitute an ancillary restraint.  The CAT found that the CMA had erred in finding that it was necessary to apply a full proportionality analysis in order to establish a restriction of competition by object but held that this error was not material because the CMA’s analysis of the legal and factual context of the internet policy accords with the case-law of the CJEU and supports a finding that the very nature of the internet policy is to restrict competition.  As regard the penalty imposed on Ping Europe, the CAT reduced this from £1.45 million to £1.25 million.

The judgment is here.

Marie Demetriou QC represented the CMA.

Robert O’Donoghue QC, David Scannell and Tim Johnston represented Ping Europe Ltd.