UK Competition Appeal Tribunal issues rare judgment on application of competition law to online sales restrictions (Up & Running v Deckers)
Competition analysis: In this judgment, the Competition Appeal Tribunal (CAT) examined the compatibility with UK competition law of action taken by a brand operating a selective distribution system (Deckers) against one of its authorised retailers (UP & Running) to prevent it selling the brand’s products online at a discount. The judgment provides important guidance on the extent to which a brand may exercise its discretion when deciding when to eject a retailer from its selective distribution system; the steps that a brand can legitimately take to control a retailer’s online sales; and the extent to which a brand can manage sales of out of season products to avoid its retail margins being undermined. The case is also an interesting example of the CAT’s fast-track procedure in action, with the case proceeding from issuance of claim to final judgment in only a year. The CAT’s conclusion that the brand’s actions had infringed competition law, by unlawfully restricting the retailer’s ability to set its own prices and to use the internet, followed well-established precedent, as well as extensive EU and UK guidance. In reaching this conclusion, the CAT took care to emphasise that Deckers infringed the law because its selective distribution system was ‘incomplete and flawed in its design and operation’, rather than because selective distribution is inherently anticompetitive. Written by Becket McGrath, a partner at Euclid Law Ltd.
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