Bundeskartellamt strikes down online sales restrictions

The Bundeskartellamt launched an investigation into Liebherr's selective distribution model. Liebherr-Hausgeräte Vertriebs- und Service GmbH agreed not to use certain clauses in its sales conditions namely requirements on online sales to obtain rebates.

In Germany, Liebherr sells its household appliances through Liebherr-Hausgeräte Vertriebs- und Service GmbH via a selective distribution system. The Bundeskartellamt initiated the proceeding in response to complaints raised by market participants.

In early 2021, Liebherr introduced a new sales contract including a new rebate scheme, referred to as the "Liebherr-Performance-Rabatt". The retailers had to meet "performance" criteria in order to obtain full rebates. These included for instance:

• online resellers must ensure that staff can be contacted between 9am and 8pm on Sundays and holidays;

• online resellers must guarantee a specific delivery period for products that customers have ordered but that are not in stock at the retailer; and

• online resellers had to offer certain modes of payment.

The Bundeskartellamt reached the preliminary view that these requirements would have resulted in disadvantaging online sales. According to the Bundeskartellamt's preliminary assessment these rules not only disadvantage retailers that only sell online, but also hybrid retailers that operate both a brick-and-mortar shop and an online shop. These retailers must fulfil all the criteria for offline and online shops to obtain rebates. The criteria imposed by Liebherr were seen stricter for online sales compared to offline sales. Retailers who offered both distribution channels and did not meet the strict online requirements risked losing the rebate for brick-and-mortar sales as well.

Overall, the Bundeskartellamt found that such a structure can substantially impair the attractiveness of online sales and even cause some retailers to cease their online activities altogether. Consequently, the requirements seemed likely to make the more price-active online sales appear unattractive from an economic perspective. Liebherr agreed to relax its requirements to meet the concerns raised and the Bundeskartellamt decided to close the proceedings.

The Bundeskartellamt's approach to Liebherr's different requirements for online and offline sales echoes the Bundeskartellamt's earlier proceeding against Bosch Siemens Hausgeräte GmbH from 2013 where the Bundeskartellamt challenged a dual pricing model and rejected a justification for different rebates to compensate for higher costs of offline retailers.

The Bundeskartellamt's intervention comes during the overhaul of the rules on vertical agreements by the EU Commission. In its impact assessment, the EU Commission has identified indirect measures which can restrict online sales such as dual pricing strategies as a potential field for a policy change. In this regard the EU Commission sought the view of stakeholders whether dual pricing shall no longer be deemed a hardcore restriction and/or if the imposition of criteria on online sales which are not overall equivalent to criteria imposed on brick and mortar stores shall no longer be deemed hardcore restrictions as well. The EU Commission is still in the process of analysing the responses from the public consultation but over the next year the rules for selective distribution systems may see substantial change.