On July 1, 2019 the FCA imposed a fine of €250,000 on the high-end bicycle manufacturer Bikeurope B.V. and its mother company, Trek Bicycle Corporation, for having imposed and monitored an online sales’ ban on its distributors from 2007 to 2014.
The FCA initiated this case almost ten years ago, when it received evidence from the French Directorate General for Competition Policy, Consumer Affairs and Fraud Control (Direction générale de la concurrence, de la consommation et de la répression des fraudes, “DGCCRF”). The FCA conducted dawn raids at various companies active in the distribution of high-end bicycles in June 2013, and sent a statement of objections to Bikeurope and its parent company Trek in July 2018.
Bikeurope assembles, distributes and sells Trek bicycles through a network of authorized distributors. Bikeurope’s terms and conditions initially provided that any online sales of Trek bicycles be delivered to an authorized point of sale. In 2010, Bikeurope changed its terms and conditions, explicitly prohibiting online sales. This online sales ban was monitored by Bikeurope, who threatened retailers to terminate their contract if they did not comply with the ban.
According to Bikeurope, these restrictions were to protect consumers’ safety, in compliance with two French decrees; a 1995 decree prohibiting the delivery to end-customers of cycles not properly assembled or fully adjusted and a 2016 decree allowing the seller to leave it to the consumer to assemble the wheels and pedals only.
A de facto online sales ban
The FCA held that Bikeurope’s terms and conditions amounted to a de facto online sales ban in violation of Article 101(1) TFEU and Article L420-1 of the French Commercial Code.
The FCA noted that the organization of a selective distribution network is not prohibited by competition law provided that it complies with certain conditions. In particular, a selective distribution contract cannot prohibit online sales unless this is justified to preserve the quality and proper use of the product being distributed.
Moreover, the online sales prohibition must be proportionate to the objective pursued, i.e., it may not go beyond what is necessary to achieve that objective.
In this case, the FCA held that by requiring its distributors to deliver Trek cycles to their physical points of sale, Bikeurope had de facto prohibited them from selling the cycles online. This prohibition went beyond what was necessary to preserve consumer safety, the highly technical nature of the bicycles, and Trek’s high value- added business model (i.e., brand reputation, service quality, and a personalized relationship with the customer).
The FCA rejected Bikeurope’s claim that the obligation to deliver in-store was required by the then applicable regulation. The decrees did not prohibit distance sales (by internet or by mail). They did not require that assembly and adjustment of Trek brand bicycles be carried out within the retailer’s store and in the presence of the buyer. Instead, the decrees only required bikes to be fully assembled upon delivery to the customer.
Furthermore, the FCA held that Bikeurope’s online sales ban reduced the possibility for its distributors to sell products outside their catchment area. Indeed, the distributors could not compete with resellers who could freely use online channels. The ban also limited the choice of customers who wished to purchase a bike without travelling. The FCA therefore found the ban to be particularly harmful to competition—amounting to a by-object infringement.
The FCA also held that Bikeurope’s online sale ban was similar to a hardcore restriction on passive sales and therefore could not benefit from the block exemption regulation applicable to vertical agreements nor did it fulfil the conditions for granting an individual exemption under Articles 101(3) TFEU and L420-4 of the French Commercial Code.
However, because the impact of the online sale ban on the economy was limited, the fine imposed by the FCA remained modest (€ 250,000) despite the seven year duration of the infringement.
This is the second time the FCA fined a company for online sales restrictions following the ECJ’s Coty judgment in 2017. The Coty judgment held that online sales restrictions may be permitted in a selective distribution system when necessary to preserve the quality and proper use of the products in question, as may be the case for luxury goods.
In October 2018, the FCA fined Stihl €7 million for banning online sales, concluding that prohibiting distance sales of chainsaws went beyond what is necessary to protect the health of the consumer for the product concerned. The Bikeurope case confirms that suppliers cannot justify online restrictions for consumer safety if less restrictive means to protect consumers exist.
 Decision No.19-D-14 of July 1, 2019, regarding practices implemented in the high-end cycle distribution sector.
 Decree No.95-937 of August 24, 1995.
 Decree No.2016-364 of March 29, 2016.
 The FCA refers here to ECJ Judgments of October 13, 2011 Pierre Fabre Dermo-Cosmétique, C-439/09, para. 41 and of December 6, 2017, Coty Germany GmbH v Parfümerie Akzente GmbH, Case C-230/16, paras. 43 et seq.
 Commission Regulation (EU) No 330/2010 of April 20, 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices.
 ECJ Judgment of December 6, 2017, Coty Germany GmbH v Parfümerie Akzente GmbH, Case C-230/16.
 FCA Decision No. 18-D-23 of October 24, 2018 regarding practices implemented in the distribution of motorized cultivation equipment.