On October 17, 2019, the Paris Court of Appeals confirmed the FCA’s decision against Stihl for online sales restrictions, but reduced the fine from EUR 7 million to EUR 6 million.
On October 24, 2018, the FCA fined Stihl, a manufacturer of power tools (such as chainsaws), for online sales restriction between 2006 and 2017. The FCA found that the contractual clause imposing an in-store hand-delivery obligation on distributors for certain products sold to customers amounted to a de facto ban on online sales and therefore constituted a restriction of competition by object. Stihl appealed the FCA’s decision on the following main grounds, all of which were rejected by the Court of Appeals.
First, Stihl argued that the German, Swedish, and Swiss competition authorities, in letters exchanged with Stihl, recognized that the online sale contractual clauses imposing an in-store hand-delivery were compatible with competition law. The Court of Appeals rejected the argument as these authorities only decided not to engage in proceedings against the contractual clauses at stake, rather than expressly approving their validity. The Court of Appeals further underlined that national competition authorities—in line with settled case-law and contrary to the European Commission—do not have the power to adopt compatibility decisions.
Second, Stihl argued that the clauses did not restrict competition as 20-30% of its distributors generated online sales in 2016. The Court of Appeals rejected this argument, noting that the in-store hand-delivery obligation was understood and enforced as a de facto online sales ban. The Court of Appeals further noted that Stihl’s extensive distribution network did not counterbalance this conclusion as the equipment sold online could not be collected from any of Stihl’s 1,200 distributors, but only from the specific distributor which sold the product.
Third, Stihl argued that the in-store hand-delivery obligation was justified and proportionate to its public safety objective (due to the equipment’s intrinsic dangerousness). While the Court of Appeals considered that the in-store hand-delivery obligation was suitable to fulfill its public safety objective—contrary to the FCA’s decision, it found that it was not necessary. The Court of Appeals noted that in-store hand-delivery exceeded the scope of what is necessary to ensure the protection of consumers as it also applied to professional customers. In addition, the Court of Appeals considered that distributors did not need to make explanations on how the product functions in person. Stihl’s distributors should have been able to outsource this obligation to allow home delivery. The Court of Appeals further noted that Stihl could have fulfilled its consumer safety objective with less restrictive means, notably through remote assistance or online training.
At the stage of determining the fine, Stihl argued that it should be exempt from a fine since the German, Swedish, and Swiss competition authorities communicated assurances about the validity of the contractual clause in their correspondence with Stihl, which created legitimate expectations on the validity of the contractual clause. The Court of Appeals rejected Stihl’s argument because such letters could not constitute precise, unconditional, and consistent information as they did not provide express approval of the practice. However, the Court agreed with Stihl that the EUR 7 million fine was disproportionate due to the uncertainty around the legality of the practice and the limited economic damage. According to the Court of Appeals, the FCA should have taken into account Stihl’s good faith behavior, as demonstrated by Stihl’s contacts with national competition authorities on contract clauses at stake, and the fact that online sales of the products at stake were limited. The Court thus reduced the fine from EUR 7 million to EUR 6 million.
 See Paris Court of Appeal, Stihl, Judgment of October 17, 2019, n°18/24456.
 See FCA, Decision n°18-D-23 of October 24, 2018.
 See CJEU, Tele2 Polska, case C-375/09, Judgment of the Court of May 3, 2011, paras. 19 to 30.