B&O court of appeal outcome

B&O has had a court of appeal satisfactory outcome with a reduction in a fine from €900000 to just €10000 for preventing dealers making individual online sales.

http://www.internationallawoffice.com/Newsletters/Detail.aspx?g=353b5169-7a8a-4828-877f-2e5715f478a1

Graham

"Facts

In December 2012 the Competition Authority fined Bang & Olufsen €900,000 for de facto prohibiting itsr approved distributors from selling the brand's products online.

Bang & Olufsen appealed against the authority's decision, claiming the benefit of an individual exemption. It relied specifically on the argument – which has become a classic in selective distribution – that a total absolute prohibition of online sales protects the network against the passing off from which bricks-and-mortar sales outlets suffer.

Decision

On March 13 2014 the Paris Court of Appeal dismissed the argument, finding that Bang & Olufsen had failed to demonstrate why less restrictive solutions than a total absolute prohibition could not have been chosen to limit the alleged risk of passing off.

However, the court also clarified that, unlike the complex products in the Bang & Olufsen range, its less costly, less elaborate products are suited to being sold online as they do not require a demonstration by a sales assistant in a bricks-and-mortar store or generate high storage or distribution costs. By suggesting this distinction between simple and complex products, the appeal court appeared to say that – in practical terms – a judge might accept that an individual exemption can justify the online selling prohibition, but it is the defendant which must initiate the discussion properly.

The contribution made by the judgment is of particular interest since it follows a Supreme Court judgment in another case (Pierre Fabre), in which the court dismissed the appeal because the manufacturer "had merely" claimed the benefit of the individual exemption without producing proof that the obligation for a pharmacist to be present in the bricks-and-mortar sales outlet contributed to – and was indispensable for – economic progress.

Finally, the appeal court turned its attention to the gravity of the infringement, considering that it should be put into perspective since, at the time of the authority's decision, the law and case law on prohibiting online sales were still fluctuating. Consequently, it significantly reduced the fine from €900,000 to €10,000."

They didn't won the case but they have less to pay.

With this decision any dealer can sell B&O product via internet.

B&O wanted to control internet sales, they lost.

BeoGreg:

They didn't won the case but they have less to pay.

 

With this decision any dealer can sell B&O product via internet.

 

B&O wanted to control internet sales, they lost.

But a win for customers???

Also reads as if major items requiring in-store demonstration might be exempt from the original ruling.

Maybe the original court ruling together with the appeal helps explain why the Beo Play range distribution is set up the way it is.

B&O still controls what it can, legally, and at the same time exploits the uncontrolled internet sales market to the maximum.

Graham

It is not THE reason, but might very well be one of them.

And - thanks for that info

MM