Distribution of Goods and Services: Differences in regulatory approaches between the EU and Asia through the example of luxury goods

presentation by Jérémy Bernard, partner of Delcade Avocats & Solicitors and Lecturer at Sciences Po (Paris), specializing in EU and French competition law, at the 15^th Annual Conference of the Asian Competition Forum in La Nau on january 20th and 21st 2020.

The European Union (hereafter the “EU”) is one of the few competition law jurisdictions having developed a regulatory approach of the brick-and-mortar and online distribution of luxury goods.  The Coty Germany ruling of the Court of Justice of the European Union of 2017[1] is the last development of this regulatory approach.

The EU regulatory approach mixes regulation of the European Commission and case-law of the EU courts and is rather comprehensive (1.).  It could be a source of inspiration for Asian jurisdictions (2.).

1.              EU regulatory approach of the distribution of luxury goods

The Coty Germany ruling provides for a definition of the notion of “luxury goods” in relation to the issues raised by the distribution of such goods.

EU case law also established and has recently restated that a qualitative selective distribution network of luxury goods conforms to Article 101(1) of the Treaty on the Functioning of the European Union (hereafter the “TFEU”) provided that the network meets two conditions relating to the characteristics of the goods and the selection of the distributors.

The other channels of distribution of theses goods shall comply with the conditions listed in the EU Vertical Block Exemption Regulation[2] (hereafter the “VBER”) to benefit the exemption of Article 101(3) TFEU.

Finally, the Coty Germany and Pierre Fabre[3] rulings and the VBER set up a framework governing the distribution of luxury goods on the Internet.

2.              Implications on Asian jurisdictions

The EU regulatory approach of the brick-and-mortar and online distribution of luxury goods is of interest to Asian jurisdictions since many Asian competition regimes are based on the EU system and a huge market for luxury goods is found in Asian countries.

Its implications on Asian jurisdictions is presented through the examples of Hong Kong and Singapore.

The first jurisdiction developed a distribution regulatory framework like the EU one.  The EU approach of the distribution of luxury goods is therefore likely to be a source of inspiration there.

The second jurisdiction excludes vertical agreements from the scope of application of the local prohibition of anticompetitive agreements.  It is thus unlikely that the EU approach of the distribution of luxury goods would have an impact there.

[1]       Coty Germany v. Parfümerie Akzent, Case C. 230/16 [6 December 2017], Electronic ECR.

[2]       Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, OJEU No. L. 102, 23 April 2019, p. 1.

[3]       Pierre Fabre Dermo-Cosmétique, Case C-439/09 [13 October 2011], ECR, p.I-9419.

If you are interested in receiving the full presentation on this topic please contact us on secretariat@delcade.fr

The Asian Competition Forum was formed in 2005 by a group of Asian-based competition law and economics academics.  It seeks to encourage research and teaching of competition policy, law and economics in the region and to encourage open debate about matters of current interest or controversy.

Web site of the Asian Competition Forum:

• https://asiancompetitionforum.com/

Dedicated web pages to the 15^th Annual Conference of the Asian Competition Forum:

• https://asiancompetitionforum.com/