Companies should take appropriate measures to ensure their internet policies do not breach competition law, or be aware that they run the risk of having a financial penalty being imposed by the Competition and Markets Authority (‘CMA’).
Ping have been fined £1.45 million by the Competition and Markets Authority for breaching competition law with regards to their internet policy.
Ping were preventing two UK retailers from selling its golf clubs on their websites in an effort to promote in-store custom fitting. Ping acknowledged this in their statement last week by saying; "Our Internet Policy is an important procompetitive aspect of our long–standing commitment to custom fitting. This ensures the customer is fitted in person, something which cannot be achieved in an online environment”.
The CMA have said that whilst Ping may require sellers to meet “certain conditions” before selling its items online, the conditions must adhere to competition law.
Ann Pope, Senior Director for Antitrust enforcement said; “The internet is an increasingly important distribution channel and retailers’ ability to sell online, and reach as wide a customer base as possible, should not be unduly restricted. The fine the CMA has today imposed on Ping should act as a warning to companies that preventing its products from being sold online could be illegal”.
Companies should therefore be warned that any internet policies should be carefully scrutinised and checked to ensure that whilst providing any desired commercial aims, they also adhere to the law, and do not run the risk of falling subject to the CMA’s fines.
PING Europe state that they will be appealing the decision to the Competition Appeal Tribunal (CAT) in order to demonstrate how their policy benefits consumers and improves consumer choice.