Netherlands jurisdiction report: Luxury products and online retailers

This decision was preceded by proceedings lasting several years between Nike European Operations Netherlands BV (Neon) and one of its Italian distributors, Action Sport.

Neon pursued the Nike’s Selective Retailer Distribution Policy to ensure that the Nike brand and the products are distributed and presented in the desired environment. Action Sport has, for some years, offered Nike products for sale to consumers via Amazon and website’s of non-authorised retailers. Amazon is not a Neon-authorised reseller of Nike products.

Neon had appointed Zalando, Le Redoute and Otto, inter alia, as authorised sellers of Nike-branded products. Neon had pointed out to Action Sport on several occasions that sales through non-authorised platforms contravened the distribution policy. Action Sport did not comply, and Nike terminated its distribution agreement with Action Sport in December 2015.

Action Sport brought an action against this termination on the grounds that the ban on the sale of Nike’s products on Amazon’s market was contrary to competition law. In October 2017, the Court of Amsterdam found that authorised distributors are permitted to prohibit the sale of the products on unauthorised online platforms under article 101(1) of the Treaty on the Functioning of the EU (TFEU). Action Sport appealed against the decision.

Contrary to competition law?

The question to be determined was whether the selective distribution system established and maintained by Neon under the distribution policy was compatible with EU competition law. Can Neon prohibit Action Sport from selling Nike products, which were bought from Neon, through an unauthorised online retailer?

The court considered the legal framework. According to articles 1(1) and 2 of Commission Regulation (EU) No 330/2010 (the Vertical Agreements Block Exemption), the prohibition laid down in article 101(1) TFEU (stating that all agreements that hinder competition in the internal market are prohibited) is declared inapplicable under certain circumstances, such as when it involves selective distribution agreements.