The Italian Competition Authority opens an enquiry into vertical restraints allegedly put in place by a manufacturer of food supplements

In the Enervit case (Case I718, Enervit – Contratti di distribuzione) the Italian Competition Authority (ICA) has opened an Article 101 TFEU investigation against into allegedly anticompetitive vertical agreements. The holder of a pharmacy and of an on-line sale web site reported to the ICA a number of Enervit vertical arrangements as for the distribution of its food supplement products. The markets affected by such arrangements were the markets for food supplements for athletes as well as the markets for food supplements for fitness and well-being in each of which Enervit had a 15-20% share.
The ICA applied the principles in the Guidelines on Vertical Restraints of the European Commission to assess the distribution agreement entered by Enervit with the complainant. The agreement provided for a maximum discount to be applied on Enervit products. The producer also granted a further 10/15% discounts to retailer that applied the minimum resale prices indicated in the pricing list. According to the ICA, this arrangement amounted to a resale price maintenance (RPM) clause that is a hard core restriction under the EU competition law.
The ICA also considered the communication of 18 May 2011 sent by Enervit to the complainant. In the communication, sent to the members of the whole network of on line retailers, Enervit invited the addressees to carefully bear in mind the official pricing lists and not grant to consumers discounts higher then 20-25%. On the basis of the communication the ICA took the view that Enervit might have imposed a RPM to all internet retailers. Moreover, the ICA believed that Enervit intended to prevent on line retailers from charging lower prices than brick and mortar retailers.
Finally, the ICA had a look at the communication from Enervit to not sell the Enervit branded products to non Italian customers and not to promote the sales of the products to the latter. Considering the wording of the communication, the ICA feared that Enervit put in practice a ban of active and passive sales prohibited by Article 4 of EU Regulation 1/2003.

The ICA decision on Enervit will be eagerly awaited since in only a few cases the ICA examined intrabrand vertical restraints and vertical restraints affecting the on-line distribution system.

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