anticompetitive agreements

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

Find more interesting content in our Antitrust News & Briefs on the Steptoe website, where we provide you with more in-depth analyses on current antitrust & competition developments in the EU and the US. See below for some of our most recent publications.


Intel: ‘A Whole New World’

The European Court of Justice just came back to business with a bang. On September 6, 2017, it finally unveiled its long-awaited judgment in the Intel exclusivity rebates case. Click here to read more.


AG Wahl Delivers Opinion in the Coty Case

On July 26, AG Wahl delivered his opinion in the Coty case, addressing the legality of contractual third party platforms bans. Click here to read more.


Online Distribution: Are You Ready?

Following the conclusion of the e-commerce sector inquiry in May 2017, the European Commission has aggressively opened probes into online restrictions imposed by suppliers of branded goods and services. Click here to read more.

In an open letter published shortly before the opening of the London Fashion week on September 12, 2017 (see here), the UK Competition and Market Authority (CMA) sent a strong reminder to creative industries that they are prohibited from engaging into price coordination and information sharing between competitors.

The CMA Letter: What’s In It?

The letter draws on the 2016 model agencies cartel case, in which the CMA fined five businesses and their trade association over £1.5 million for breaking competition law. According to the CMA, the agencies: (1) discussed prices for modeling services, and, in certain cases, agreed to fix minimum prices or to adopt a common approach to pricing, and (2) systematically exchanged sensitive information. As to the trade association, it circulated confidential information to the model agencies.

The case is currently under appeal. But, for the CMA, the take-away is already clear: creative industries must be reminded that the CMA takes price collusion very seriously and will not hesitate to take action if businesses operating in this sector break competition law.

A Serious Warning for Creative Industries

The CMA letter is a serious warning to the creative industry.

In its May 2017 decision regarding resale price maintenance in the light fitting sector, the CMA considered for the first time that failure to comply with competition law following receipt of a warning letter was an aggravating factor. Therefore, the regulator increased one of the investigated parties’ fines by 25%. The CMA justified this approach as follows:

“It is important that warning letters are taken seriously and that recipients read any such letters carefully […] the CMA considers that it is appropriate and proportionate to increase the penalty for the Endon infringement by 25% in this case for failure to comply with competition law following receipt of a warning letter”.

Based on this precedent, the CMA letter to those active in the creative industries should be taken very seriously, as any price collusion practices in the sector could well generate increased fines, due to the existence of a prior warning letter.

The CMA letter refers to the model agencies case. However, we assume that any business, engaged in the creative sector should be deemed included within the scope of the letter, given that it refers to the UK’s creative industries in very general terms. Also, given the timing of publication of the letter, we conclude that fashion industries are among the prime targets of the CMA.

On the Use of Open Letters to Ensure Compliance with Competition Law

This is not the first time that the CMA has sent an open letter to a wide range of industry participants. For instance, in June 2016, it published an open letter to retailers and suppliers regarding a particular practice, namely online resale price restrictions (see here). In December 2015, it warned medical practitioners about their obligations under competition law (see here).

The use of these letters is designed to achieve a greater level of UK awareness regarding the scope of competition law. The use of open letters allows the CMA to deal with an economic sector, in a didactic way and without first engaging in expensive sector-wide antitrust investigations, whilst at the same exposing those businesses who persist with non-compliant strategies to the risk of enhanced fines. Following Brexit, we expect the CMA to make increased use of this tool, in order to conserve its limited resources and given that it will face an increased workload in dealing with matters that might otherwise have been addressed by EU regulators.

Steptoe partners Jonathan B. Sallet, Anthony J. LaRocca & Yves Botteman authored an article titled “Turning The Corner: The Internet Of (Moving) Things” for Competition Policy International. The article explores the intersection between the development of the Internet of Things and competition law, both from a US and a EU perspective. The article is available here.

On September 15, Steptoe and Japanese law firm Iwata Godo will conduct a joint antitrust seminar in Tokyo addressing the international management of antitrust risks for Japanese companies.

The speakers (Ken Ewing, Pat Linehan and Jean-Nicolas Maillard from Steptoe and Akira Matsuda and Takaki Sato from Iwata Godo) will provide to the audience an overview of recent enforcement trends in the US, the EU and Japan, with a specific focus on international civil and criminal antitrust litigation strategies.

If you would like to participate in this seminar, we invite you to register ‎through the link in the invitation here.