adidas abandons ban on sales via online market places

The Bundeskartellamt has closed its proceedings against adidas AG (adidas) after the company amended its conditions for online sales in such a way that they comply with competition law.

adidas operates a selective distribution system which only allows authorised retailers to sell adidas products to consumers. The conditions for online sales, which were introduced in 2012, included a far-reaching prohibition for retailers to sell via the large online market places eBay and Amazon Marketplace, as well as other platforms such as Rakuten.de, Yatego.de, Hitmeister.de and meinPaket.de. The Bundeskartellamt had initiated proceedings after it had received numerous complaints by sports retailers.

Andreas Mundt, President of the Bundeskartellamt: "The trading possibilities offered by the Internet create new challenges for both manufacturers and retailers. In this dynamic market environment, it is our task to keep markets and opportunities open for the benefit of retailers and consumers. It goes without saying that manufacturers can select their distributors according to certain quality requirements. However, both under European and German competition law they are prohibited from largely eliminating a principal distribution channel such as the web. Our proceedings against adidas and also against ASICS (which have not yet been concluded) serve as test cases because currently a number of brand manufacturers are contemplating similar measures. We welcome the fact that adidas now allows its authorised retailers not only to operate their own online shops but also to operate shops at online market places. Not least because of declining customer numbers, this is particularly important for small and medium-sized sports retailers who want to expand their customer base. Consumers will also directly benefit from the amended conditions of sale."

After extensive investigations at sporting goods manufacturers and German retailers, adidas was informally notified that its ban on sales via online market places and the restrictions imposed on authorised retailers with regard to search engine advertising gave cause for serious competition concerns. In response to this, adidas submitted an amended version of its conditions of sale for e-commerce, in which it has completely abandoned its ban on sales via online market places. It also clarified that all authorised retailers are free to use adidas brand related terms as search words for search engine advertising such as Google AdWords.

The Bundeskartellamt will shortly publish a detailed case summary on the legal aspects of this case.

The Bundeskartellamt is currently also holding discussions with ASICS Deutschland GmbH, to which a statement of objections has been issued on account of similar conditions of sale  (cf press release of 28 April 2014), on how the company could amend its selective distribution system in order to bring it in line with competition law.