Selling Cosmetics and Personal Care Products via Internet. Eva Kon. Kitsiou

Case Pierre- Fabre Dermo- Cosmetique

Opinion Of Advocate General Jan Mazak

The Pierre-Fabre Group is a subsidiary of L’Oréal and markets a number of ranges of pharmaceutical, homeopathic and para-pharmaceutical products. PFDC manufactures and markets cosmetics and personal care products. The cosmetics laboratories: Avène, Klorane, Galénic and Ducray are included in the PFDC’s subsidiaries.

PFDC applies a selective distribution system. The contracts awarded by PFDC for the distribution of cosmetics and personal care products in respect of the Avène, Klorane, Galénic and Ducray brands stipulate that such sales must be made in a physical space and that a qualified pharmacist must be present. The Cour d’ appel de Paris has held that the aforementioned requirements exclude de facto all forms of selling via the internet.

It is settled case-law of the ECJ that selective distribution systems are permissible provided distributors are chosen on the basis of objective criteria of a qualitative nature relating to the technical qualifications of the distributor and its staff and the suitability of its trading premises and that such conditions are laid down uniformly for all potential resellers and are not applied in a discriminatory fashion. A manufacturer may thus not refuse to approve distributors who satisfy the qualitative criteria of the distribution system.

All objective criteria of a qualitative nature are permissible under Article 81 par. 1 of the EU Treaty, since the characteristics of the goods in question necessitate a selective distribution system in order to preserve their quality and ensure their proper use and the criteria do not go beyond what is objectively necessary in order to distribute those products in an appropriate manner, in the light not only of their material qualities but also their aura or image.

In case of the total ban of selling cosmetics and personal care products in respect of the Avène, Klorane, Galénic and Ducray brands, the General Advocate considers that a general and absolute ban on selling goods to end-users via the internet imposed on authorised distributors in the context of a selective distribution network which prevents or restricts parallel trade more extensively than such restrictions inherent to any selective distribution agreement and which goes beyond what is objectively necessary in order to distribute those goods in an appropriate manner in the light not only of their material qualities but also their aura or image, has the object of restricting competition for the purposes of Article 81(1) EC.

In order to be judged if selling via Internet does not go beyond what is objectively necessary, the referring court should examine, for example, whether individualised information and advice on the products in question could be adequately provided at a distance over the internet to users, with the possibility of users submitting pertinent questions on the products without the need to go to a pharmacy.The distributors of the Pierre Fabre Group could also indicate in such instances that individual and direct advice is available to users at certain physical outlets. Internet sales may also enhance intra-mark competition as such sales may increase price transparency thereby permitting price comparison of the products in question.