1. Le présent support ne peut être reproduit sans autorisation 1 Legal case « Pierre Fabre Laboratories»  Is it legal to require the permanent presence of a pharmacist at the approved physical outlets … ? That is to say…  … Does a general prohibition on selling contract goods to end-users via the internet, imposed on authorised distributors in the context of a selective distribution network, in fact constitute a “hardcore” restriction of competition by object ? (CA Paris, 19 oct. 2009, RG n° 2008/23812) Question referred to the European Court by the Paris Court of Appeals

2. Le présent support ne peut être reproduit sans autorisation 2 Legal case « Pierre Fabre Laboratories»  The selective distribution agreement providing such a prohibition :  « amounts to a restriction by object within the meaning of Article 101 (1) TFEU where, following an individual and specific examination of the content and objective of that contractual clause and the legal and economic context of which it forms a part, it is apparent that, having regard to the properties of the products at issue, that clause is not objectively justified »  could not benefit from the block exemption provided for in Regulation n° 330/2010 because it constitute a restriction that has severely anticompetitive effects, irrespective of the market share of the undertakings concerned (art. 4- c du règlement).  « However, such a contract may benefit, on an individual basis, from the exception provided for in Article 101(3) TFEU where the conditions of that provision are met ». (CJUE, 13 oct. 2011, aff. C. 439/09) Court’s ruling

3. Le présent support ne peut être reproduit sans autorisation 3 Legal case « Pierre Fabre Laboratories»  The anticompetitive object is established according to objectives circumstances (no matter the lack of will to affect the competition).  The anticompetitive object of the agreement is characterized by the examination of the precise purpose of the agreement, in the economic context in which it is to be applied.  In this case : it constitutes a restriction by object because the agreement « de facto prohibits the authorised distributors from any form of internet selling ». Restriction of competition by object (yes) : qualification

4. Le présent support ne peut être reproduit sans autorisation 4 Legal case « Pierre Fabre Laboratories»  The restriction of competition nevertheless avoids the prohibition of Article 101 (1) TFEU if it can be justified with a legitimate goal  In this case : The products characteristics do not require to provide individual advice to the customer or to ensure his protection against the incorrect use of products by direct discussion with a pharmacist. The aim of maintaining a prestigious image is not a legitimate aim for restricting competition and cannot therefore justify the ban of internet sales. Restriction of competition by object (yes) : justification

5. Le présent support ne peut être reproduit sans autorisation 5 Legal case « Pierre Fabre Laboratories»  The exemption shall not apply to vertical agreements which have as their object « the restriction of active or passive sales to end users by members of a selective distribution system operating at the retail level of trade » (Art. 4-c) of the Regulation n° 330/2010).  « Active sales » : actively approaching individual customers (Guidelines, pt. 51).  « Passive sales » : responding to unsolicited requests from individual customers (Guidelines, pt. 51).  In this case : « A contractual clause (…) prohibiting de facto the internet as a method of marketing, at the very least has as its object the restriction of passive sales to end users wishing to purchase online and located outside the physical trading area of the relevant member of the selective distribution system ». Block exemption (no) : restriction of active and passive sales (yes)

6. Le présent support ne peut être reproduit sans autorisation 6 Legal case « Pierre Fabre Laboratories»  The exemption may benefit to an agreement which prohibits « a member of the system from operating out of an unauthorised place of establishment » (art. 4-c) of the Regulation n° 330-2010)…  But  … in this case : the Internet website is not considered as a point of sale.  Comp. : Guidelines, pts. 52 and 56. Block exemption (no) : sales in an unauthorised outlet (no)

7. Le présent support ne peut être reproduit sans autorisation 7 (titre) – (date) Legal case « Pierre Fabre Laboratories»  May be exempted the agreement which meets 4 cumulatives conditions (art. 101(3) TFEU) : 1. Contribution to improving the production or distribution of goods or to promoting technical or economic progress (in this case: advices improve the quality of the distribution of goods). 2. While allowing consumers a fair share of the resulting benefit (in this case : personal advices). 3. Whitout imposing restrictions which are not indispensable to the attainment (in this case, yes if the value of the advice is recognised) 4. Without eliminating competition in respect of a substantial part of the products (in this case, the weakness of the market shares of Pierre Fabre Dermo Cosmétique Laboratories).  In this Case : the Court of Justice let the Paris Court of Appeals the application of Article 101(3) TFEU. Individual exemption (yes ?)

8. Le présent support ne peut être reproduit sans autorisation 8 Legal case « Pierre Fabre Laboratories»  Protection of the physical outlets against excessive competition of online distributors (especially pure players) :  Cf. obligation to run one or many physical point(s) of sales together with the exploitation of a website (Guidelines, pt. 52).  Cf. obligation to sale a minimum quantity of products in physical outlets or a maximum quantity of products via the Internet (value or number of products) (Guidelines, pt. 52).  Cf. online reseller’s obligation to pay a special fee to support the efforts to sale products in physical outlets (Guidelines, pt. 64). Individual exemption (yes ?)