On April 20th the European Commission adopted a new Vertical Agreements Block Exemption Regulation and a revised set of accompanying guidelines on vertical restraints (VBER). The new rules are due to become effective on June 1st, 2010. Among other significant changes in the antitrust rules, the ones that are relevant for our course are the ones that apply to Online Distribution.
In particular, the following situations even if not automatically prohibited will very likely be viewed as antitrust violations:
-Preventing customers located outside a distributor's territory from viewing its Web site or automatically re-routing such customers to their national Web sites
-Limiting the proportion of overall sales made over the Internet
-Requiring that a higher price be paid for products sold online
-Requiring termination of Internet transactions if credit card data reveal an address outside the distributor's territory
Furthermore and even more importantly online distributors may be required to have one or more physical locations ("bricks and mortar" shops) or showrooms as a condition for becoming a member of a selective distribution system. Having one of more shops should give the opportunity to consumers to physically see and try or test their products.
These new rules have been read as a response to the Luxury brands lobbying. Luxury goods manufactures have always been concerned about online stores selling their brands at a discount and taking advantage of the investment they have to make to build and maintain their brand equity.
Effectively from the 1st of June in Europe Luxury brands will be able to prevent online stores from selling their goods.
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article7107211.ece
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