European competition law and distribution via the internet

Abstract

This article is limited mainly to the analysis of distribution or dealership agreements, one of the most common forms of vertical agreement. A particular problem raised by the Internet is the potential risk of a priori “unfair” price competition between retailers, on account of the possibility for retailers operating through the Internet to sell at much lower prices than property based retailers. For example, if a supplier sells a product to its distributors for €100, a brick‐based retailer may need to sell the product at, say, €120 in order to cover his property and staff costs and make a small profit, whereas a click‐based retailer may need only to sell at €104 to make the same profit. Alternatively, the internet retailer can sell at the same price as the high street shop and make a vastly superior profit. In order to achieve “fairness” between its retailers in those different environments, can a supplier dictate the price at which its products are sold or otherwise restrict selling via the Internet?

Citation

Ellis, J. (2006), "European competition law and distribution via the internet", Journal of International Trade Law and Policy, Vol. 5 No. 2, pp. 22-41. https://doi.org/10.1108/14770020680000542