Court of Appeal delivers significant judgment on restriction of competition by object/legality of bans on internet selling

21/01/20

Today the Court of Appeal (Sir Geoffrey Vos, Chancellor of the High Court, Lord Justice Flaux, Lady Justice Rose) dismissed the appeal brought by Ping, a golf manufacturer, against the judgment of the Competition Appeal Tribunal upholding a decision of the Competition and Markets Authority. The CMA’s decision found that Ping’s internet sales policy which prohibits the retailers in its selective distribution system from selling its golf clubs online constitutes an infringement by object of Article 101 TFEU and the Chapter I prohibition of the Competition Act.

In upholding the CMA’s Decision, the Court of Appeal analysed the case law on restrictions of competition by object, including Cartes Bancaires and the recent opinion of Advocate General Bobek in Budapest Banks.  The Court held that the object of Ping’s internet sales policy is to restrict intra-brand competition between Ping’s retailers by limiting their ability to sell to customers who are outside the geographic range of their premises and softening price competition. The Court rejected Ping’s argument that there could be no object infringement in circumstances where its internet sales policy also had a pro-competitive purpose because it increased the quality of the product for fitted consumers. It also rejected the argument that the CMA and the CAT had failed properly to take account of the selective distribution context of the internet sales policy and the argument that the CMA had failed to establish a sufficient likelihood of competitive harm.

The judgment is here.