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A Dutch district court confirms Nike’s selective distribution system regarding online sales

18/10/2017

Action Sport Soc. Coop, ARL (Action Sport), a distributor of Nike products based in Italy, brought a claim in the Netherlands against Nike European Operations Netherlands BV (Nike) on the grounds that the latter had wrongly terminated its distribution contract on 28 December 2015. Nike opposed this claim, holding that its termination had indeed been lawful. Particularly, it contended that Action Sport had been reselling, without its consent, Nike products through the Amazon platform, which was not a member of Nike’s selective distribution system.

In its judgment of 4 October 2017, recently published (ECLI:NL:RBAMS:2017:7282), the Rechtbank Amsterdam decided in favor of Nike, thus validating that company’s selective distribution system and more specifically the terms and conditions of online sales.

The court held that the specific Nike products concerned amounted to luxury products and that the selective distribution system was indeed designed to protect its brand image. With regard to this issue, the Court expressly took into account the Opinion of Advocate General Wahl in Case C 230/16 Coty Germany, submitted on 26 July 2017 (ECLI:EU:C:2017:603), even before the Court of Justice of the European Union (CJEU) has issued a judgmented in that case. According to the court, the arguments of the Advocate General were convincing, with no reason to wait for the CJEU's ruling (section 4.9.5 of the judgment). In addition, unlike the Coty Germany case, Nike had already accepted certain online platforms as authorized distributors within its distribution network (such as Zalando or Le Redoute), and nothing would prevent, as stated in the judgment, that Amazon requested to be part of the system selective distribution if it does fulfill the conditions laid down by Nike in order to become a member of its network (section 4.11 of the judgment). The court accordingly concluded that Nike's selective distribution system was permitted under Article 101(1) of the Treaty on the Functioning of the European Union (section 4.10 of the judgment).

Although it is not a decision of a high court, and despite the court following the non-binding Opinion of the Advocate General, this ruling may be an indicator of how such cases will be dealt with in the future. It is expected that the CJEU will soon clarify the treatment of restrictions on online sales of luxury or high-end products when it finally renders its judgment in Coty Germany.

The judgment may be accessed here (in Dutch).