Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55A total ban on internet resale is not permitted. But suppliers can limit it by imposing requirements on internet resale.
As a supplier you prefer to control the sales channels in order to protect the reputation of your products. The same applies to internet resale by your distributors. However, online sales via a personal website or internet platforms, such as eBay and Marktplaats.nl, cannot be restricted. Such a restriction of internet sales may restrict competition too much resulting in the risk of severe fines for breaches of competition law. Potential fines may even amount to 10% of the annual turnover.
A total ban on internet sales (included in the General Terms & Conditions) is not permitted, but as a supplier you don’t have to just tolerate everything. You can impose certain requirements and thus retain (some) control of internet sales, including, for instance:
A supplier restricted competition by prohibiting his distributors from selling cameras through internet platforms such as eBay and Amazon. The distributor only allowed camera sales via a personal website. Based on quality requirements, which also apply to physical shops, high-end brands can prohibit sales via an online platform.
Another supplier went too far when he only wanted to permit internet sales after he had given approval. According to the Mid-Netherlands District Court, this enabled him to exercise more influence on the distributors than necessary for a good reputation and the good name of the product.
In a number of guidelines, the European Union has outlined the leverage for internet sales. For example, geo-blocking is not allowed, nor is it permitted to:
A seller is not allowed to simply start a web shop under the name of a brand he sells, even if he is an official dealer, agent or distributor. The brand owner can prohibit the reseller from using the brand if this use could lead to confusion among the average consumer. For this reason, a seller of painting supplies by Talens had to transfer the domain talensshop.nl to the Talens brand owner.
Do you have any questions with respect to restricting internet sales by your distributors (in General Terms & Conditions) or other questions related to online sales? Would you like to have your General Terms & Conditions tested? Please contact:
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