The Italian Competition Authority targets an RPM concerning online sales of stoves

Upon the receipt of a complaint filed by an online dealer, the Italian Competition Authority (ICA) has opened an Article 101 TFEU investigation against Cadel which is part of group that is a European major producer of biomass heaters (Decision no. 26616 of 17 May 2017, Case I813, Restrizioni alle vendite online di stufe). The target of the ICA investigation is the commercial policy that Cadel has adopted at least since 2006 for its online distribution channels with the apparent strategic aim to preserve a proper margin and prevent online dealers from selling Cadel trademarked products at absurdly low prices.
The relevant product market affected by under scrutiny business practices of Cadel is the market for the manufacture and commercialization of pellet stoves and kitchens. The ICA had concerns that some of the rules and terms included in the Cadel online commercial policy would constitute anti-competitive vertical restraints as they would limit to a relevant extent the marketing of the Cadel products via online channels.
More precisely, the ICA attention was attracted by the following terms in the Cadel commercial policy. Apparently, Cadel required online dealers to charge the minimum sale prices, which were the list prices and the maximum discounts indicated by Cadel. The ICA took the position that such arrangements would a RPM which is a competition restraint by object. The ICA also stressed that the alleged RPM concerns the online distribution channels which are considered by the European Commission as powerful tools to reach as many customers as possible.
Further restrictions on online sales imposed by Cadel include: i) the obligation to market the Cadel products only through Italian sites registered with the domain ‘.it’; ii) the prohibition to use languages other than Italian for online offers of Cadel products; iii) deliver of Cadel products shall be limited to the Italian territory; iv) only the dealers admitted to the Cadel distribution network are allowed to offer and sale the Cadel products online.
The ICA had concerns that such terms and rules might give rise to anti-competitive territorial restriction to the online sales of Cadel’s products. These arrangements might put off dealers from expanding their distribution businesses abroad. They might also prevent foreign customers from purchasing the Cadel products from the dealers admitted to its Italian network.


Comments

Post a Comment

Popular posts from this blog

Aspen: The Italian Competition Authority fines a generic manufacturer of drugs for excessive pricing

By the decision made on 29 September 2016 in Aspen [i] , the Italian Competition Authority (ICA) has imposed a fine of more than EUR 5 million on the Aspen group (Aspen), a South African manufacturer of generic drugs. Aspen violated Article 102 TFEU by imposing excessive prices for the supply of the so-called ‘Cosmos drugs’. These drugs included Leukeran, Alkeran, Purinethol and Tioguanine, which included the active principles of chlorambucil, melphalan, mercaptopurine and tioguanine, respectively. All these drugs were used to treat cancer pathologies and included in a wider package of pharmaceutical products, whose marketing rights had been purchased by Aspen from the originator GlaxoSmithKline (GSK) in 2009. Aspen had a dominant position in the relevant product markets for the commercialization of anti-cancer drugs manufactured using the active principles of alkeran, leukeran, purinethol and tioguanine. It had the only one market authorization for the sale of drugs and potential
Read more

Geographical allocation of turnover in aviation mergers: What the European Commission recently hold

The European Merger Control Regulation (ECMR) stipulates that only concentrations with a European dimension fall within the regulatory jurisdiction of the European Commission to review. A concentration is presumed to have such a dimension when it meets the financial threshold in Article 1 of the ECMR. To this end, it is necessary to calculate the turnover generated by the merging parties within the Community or in one or more member states. However, the geographical allocation of the turnover required by Article 1 for the purpose to establish the Commission’s jurisdiction can be a tricky issue in case of mergers between undertakings with a cross-border activity such airliners. In fact, the activities of airlines span several countries as they typically operate flights and sell tickets in many national markets. Recently, the Commission has dealt with the issue at length in the Ryanair/Aer Lingus case. It identified three possible methodologies for geographical allocation of turnover: -
Read more

The European Commission unconditionally clears the Facebook/WhatsApp merger

By a Phase I decision the Commission unconditionally approved the Facebook $ 19 billion acquisition of WhatsApp ( Case No COMP/M.7217,Facebook/WhatsApp) . The Commission was required by the parties to review the transaction by means of a reasoned submission filed on the basis of Article 4(5) of the EU Merger Regulation. Indeed, the merger was not a concentration with EU dimension within the meaning of Article 1 EUMR falling within the Commission jurisdiction, since the EU turnover of WhatsApp in 2013 failed to met the financial thresholds in that provision. The Commission identified three relevant product markets affected by the concentration. It restrained the first relevant market, the market for consumer communication services, to the communication apps for smartphones, because WhatsApp was available only for this device. Following its approach in Microsoft/Skype (Case M.6281), upheld by the General Court in the case T-79/12, Cisco Systems and Messagenet v Commission, the Com
Read more