Thursday, August 20, 2009
Posted by D. Daniel Sokol
Emily Clark, Mat Hughes, & Denis Waelbroeck (all Ashurst) address Selective Distribution and Luxury Goods: The Challenge of the Internet?
ABSTRACT: On July 28, 2009 the European Commission published for consultation its proposals for a revised vertical agreements block exemption regulation ("the Block Exemption") to replace the current Block Exemption due to expire in May 2010; as well as revised draft Guidelines on Vertical Restraints ("the Guidelines"). The Commission's accompanying press release states that "the Commission considers that the rules are working well overall and should not be fundamentally modified."
One range of restrictions covered by the scope of the existing and draft Block Exemption relates to selective distribution which permits manufacturers to supply only authorized retailers who meet certain criteria. A key issue is the use of selective distribution by luxury goods producers and, in particular, whether the rationales which have traditionally been used to justify such arrangements can be applied to restrictions placed on a newer distribution channel, namely internet retailing.
Diametrically opposing views have been expressed on this subject.