Resale price maintenance and online sales restriction practices are under the radar of the French Competition Authority, as illustrated by its recent decision having fined Mobotix (a producer of video surveillance cameras) and several of its wholesalers for agreeing on the resale prices (through minimum advertised prices policy) and for restricting online sales. The Authority imposed a total amount if fine of €1.4 million on the parties involved (Decision No. 21-D-26 of 8, November 2021).
Mobotix wholesale agreements required wholesalers not to advertise prices below the recommended resale prices (so-called “minimum advertised prices policies” or "MAP policies"). Mobotix also instructed its wholesalers to ensure that the resellers effectively complied with the minimum advertised prices.
A MAP policy differs from traditional resale price maintenance practices since pursuant to such MAP policies, the supplier does not prevent its resellers from selling below a minimum fixed price but only limits their ability to advertise prices below a certain price.
The Authority in this decision confirms that such practices are prohibited under French and EU competition law as they are considered as a form of indirect price fixing.
Indeed, resellers contractually bound not to display retail prices below the recommended resale price lose their commercial freedom to set prices and the ability to attract demand by advertising discounted prices. The Authority held that this type of clauses constitutes an infringement of competition by object as it limits or distorts price competition, regardless of the exact degree to which they were implemented.
This reminder is all the more important that this practice is not prohibited in all jurisdictions. For instance, under the US antitrust law, a MAP policy is considered licit if it only restricts the advertised price of a product but not its final sales price.
The Authority also held anticompetitive a set of clauses contained in the wholesaler’s agreement encouraging them to only select resellers which did not sell most of their products online.
The Authority rejected the two arguments raised to justify this practice:
The full decision of the French Competition Authority is available here (in French).