Asics vs Coty: Competitive effects of selective distribution systems in light of diverging court decisions

May 2018

CPI Europe Column edited by Anna Tzanaki (Competition Policy International) & Juan Delgado (Global Economics Group) presents:

Asics vs Coty: Competitive effects of selective distribution systems in light of diverging court decisions By Markus Reisinger (Frankfurt School of Finance & Management)¹

Many brand manufacturers in different industries ranging from sport shoes (Adidas and Asics) over consumer electronics (Bang & Olufsen) to cosmetics and perfumes (Pierre Fabre and Coty) use a selective distribution system (SDS) vis-á-vis their retailers.² These SDSs are recently under intense scrutiny of Antitrust authorities and have gained a lot attention due to several court decisions. Particularly, the diverging decisions on in the Asics and the Coty case gave rise to a debate.³ In the Asics case, the German Bundeskartellamt (BKartA) ruled in August 2015 that the SDS of the sport shoe manufacturer Asics with respect to online advertisement and price search engines violates competition law (Art. 101 (1) of the Treaty of the Functioning of the European Union).⁴ By contrast, in the Coty case, the European Court of Justice in December 2017 ruled that relatively similar clauses in the SDS of Coty, a beauty products manufacturer known for brands such as Calvin Klein, Gucci, and Hugo Boss, are compatible with competition law.⁵ How to make sense of these diverging decisions? In this article, I explain the pro- and anticompetitive effects that SDS