On January 23, 2018, the European Court of Justice (CoJ) handed down an interesting judgment in the Hoffman-La Roche / Novartis case (C-179/16). For the first time, the CoJ takes a stance on an emerging hot topic in EU antitrust law: disparagement – or, in more trendy terms, fake news. And the CoJ’s message is clear: the EU will show no mercy for businesses engaging in such practices.

In our view, the judgment conveys three key messages:

  • Disparagement can come in many forms and shapes. The Hoffmann – La Roche / Novartis case arguably features a rather unconventional and somewhat counterintuitive disparagement scenario, that is, one where the disparaged party is also part of the collusion. As such, this case illustrates the huge variety of scenarios that can fit under the header ‘disparagement.’ However, that is not to say that any form of criticism towards your competitors will get you in trouble. In practice, all cases to date deal with well-organized disparagement campaigns. Thus, a few negative comments in passing are unlikely to give rise to an investigation.
  • Disparagement goes beyond fake news, at least in certain sectors. As noted above, the concept of disparagement extends beyond the dissemination of incorrect information. The dissemination of correct information, but in a partial way, may also raise issues, especially when it impacts an economic sector that is highly risk-adverse. In this regard, we note that most precedents on disparagement – if not all – featured misleading health claims. It remains to be seen whether a similar theory of harm could be argued in relation to less sensitive sectors or in relation to practices unrelated to human health.
  • If prosecuted under Article 101 TFEU, effects do not need to be proven since disparagement can be a “by object” infringement. As a result, failed disparagement strategies may also trigger antitrust enforcement.

Want to learn more about the judgment? Check out our briefing.

A few days after the Coty judgment,[1] the German Federal Court of Justice[2] (Bundesgerichtshof or BGH) upheld the decision of the Higher Regional Court of Düsseldorf in the Asics case,[3] confirming that Asics, the sport shoes manufacturer, may not prevent its selective distributors from cooperating with price comparison engines to promote the Asics branded products.

1. Background

From 2012 to 2015, the German subsidiary of Asics set up a selective distribution system which imposed a number of limitations on the online sales activities by authorized dealers in Germany. In particular, Asics prohibited its authorized distributors from (i) selling through online marketplaces such as Amazon and eBay, (ii) using price comparison engines, and (iii) using Asics trademark on the distributor’s online search advertisements.

Continue Reading I Want to “Run” Free: Authorized Dealers Cannot Be Prevented from Using Price Comparison Websites

Following an inquiry in July 2017, the House of Lords’ European Union Committee published on February 2, 2018, a report titled – ‘Brexit: competition and State aid’ – on the future of the UK’s competition law regime after Brexit.

The House of Lords report provides a detailed account of the most pressing issues that the UK’s competition law regime is facing ahead of Brexit. It also shows the high levels of uncertainty that businesses operating between the EU and the UK face.

This uncertainty suggests that businesses should – at least for now – adopt a cautious approach, for example, when formulating their distribution and acquisition strategies in the UK.

Whatever the statutory changes to the UK’s competition law regime after Brexit are, EU law will still remain an important factor to consider when taking business decisions, especially because of the geographical proximity and close trading relationships between the UK and the EU. This means that going forward businesses need to have guidance.

Steptoe has years of experience in successfully advising businesses on their strategic decisions in the EU and the UK. Our experienced lawyers can help your business to successfully navigate the demands and potential opportunities of Brexit.  Continue Reading House of Lords Report on Brexit and Competition: What Does it Mean for Businesses?

Please join Steptoe partner Jonathan Sallet and Professor Jonathan Baker on Wednesday, February 28, for a discussion of antitrust enforcement activity in the US and what could be in store as we move into 2018.  Key issues to be discussed include enforcers’ new emphasis on vertical theories of harm when reviewing mergers; how two-sided markets should be assessed when defining product markets; and renewed questions about the nature and evidence of competitive harm that must be shown, particularly regarding prospective buyer power.

Recent mergers have prompted regulators and courts to consider how best to analyze the potential competitive effects arising from increased buyer power created by a merger.  Agencies, judges, and antitrust commentators have taken different approaches to buyer power issues in this quickly-developing landscape.  Steptoe partner Jonathan Sallet explores these perspectives in his article “Buyer Power in Recent Merger Reviews.”  Sallet frames the discussion by highlighting tension between the analyses of recent mergers before the FTC and DOJ.

The article also raises key antitrust questions for companies that may potentially augment their buying power through combination:  Continue Reading Jon Sallet Publishes “Buyer Power in Recent Merger Reviews”

Steptoe has been following the Coty case closely and is the reason why we held the first debate only 24 hours after the Court of Justice made its judgment. Therefore, we have been pleased to contribute to the developing debate by publishing our article on the Coty case for Kluwer’s Competition Law Blog.

Click here to visit their blog and to read our article.

24 hours after the delivery of the eagerly awaited Coty judgement, the Steptoe EU Competition team is pleased to invite you to an in-person event to debate with lead stakeholders on the consequences of this judgment for the online resale of branded goods in the EU.

The event will be held at our premises in Brussels on December 7 from 5:00 pm to 6:00 pm and it will also be video live streamed for those who cannot attend in person.

More information in this link.

(Participation is free of charge)

Are platform bans anti-competitive? While brand owners, distributors, platforms and the antitrust community are clinging to the edge of their seats waiting for the final determination from the European Court of Justice (CoJ) in the Coty judgment awaited on December 6, 2017, we are reporting on an interesting development in France on this topic.

On September 13, 2017, the French Supreme Court (Cour de cassation) delivered its judgment in the Caudalie case. The judgment overturns a previous ruling of the Paris Court of Appeal (Cour d’appel de Paris) which found that platform bans may be restrictive of competition. Check out our briefing to learn more about the judgment, as well as its practical implications (spoiler alert: Caudalie does not settle the debate on platform bans).

Please join our Brussels antitrust team this week, for two events focused on hot topics in EU distribution law.

On October 25, we will host the fourth in a series of webinars tackling recent enforcement developments affecting the distribution of goods and services in Europe. This webinar will provide practical insights on most favoured nation clauses (MFNs), in particular how such clauses have been stigmatized by enforcers in Europe, and whether and to what extent there is scope to include such parity mechanisms in your distribution and supply contracts. Participation is free of charge. Sign up here to join us.

On October 26, Steptoe partner Yves Botteman will participate in the ERA conference on hot issues on anticompetitive practices in the online world. Yves will share his views on how the digital age is reshaping the European approach to price and non-price restraints. Among other topics, he will discuss the upcoming Coty judgment, which should shed light on the admissibility of marketplace bans imposed on selective distributors; limitations on cross-border sales (in particular contractual geoblocking); as well as new forms of price limitations, such as minimum online advertised prices. To join the conference, either in person or via livestream, please click here.

Please join Steptoe’s Antitrust Team on Wednesday, November 1, for an in depth discussion of criminal antitrust enforcement against employee no-poaching agreements. As detailed in our earlier blog post, on September 12, two high-level officials of the US Department of Justice (DOJ), Antitrust Division confirmed the Trump Administration’s continued enforcement efforts against agreements among companies not to “poach” each other’s employees or on setting employees’ wages. Two such investigations are going on now, and more may arise. The Obama Administration’s decision to make violations criminal dramatically raised the risks for human resources and other senior company executives who set employee policies for their companies. In this webinar, we will delve into how these developments affect your business.