The Italian Competition Authority (ICA) may be ramping up its enforcement activities regarding branded goods distribution. On November 26, 2013, it announced that it was launching an investigation into sport nutrition company Enervit’s distribution network. The ICA alleges that certain arrangements between Enervit and its distributors may be anti-competitive, in particular:
- Resale Price Maintenance (RPM). In the ICA’s view, distribution agreements between Enervit and its retailers are designed to fix minimum resale prices for its Enerzona product line. The ICA is taking particular issue with Enervit guidelines which allegedly set maximum discounts that the retailers may offer to customers.
- Export ban. The ICA is also looking at alleged contractual restrictions on Enervit’s dealers selling outside Italy.
- Indefinite non-compete. The ICA is also considering alleged indefinite non-compete obligations on Enervit’s retailers.
RPM and outright bans on sales into other European Union countries are hardcore restrictions of competition under the European Commission’s Regulation and Guidelines on Vertical agreements. It is very difficult to justify such restraints, but Enervit’s line of defense is unclear.
The probe is worth noting for brand owners active in Italy. Unlike its counterparts in Denmark, France, Germany, and Poland, inter alia, which have been active in this space in recent years, the ICA has rarely looked at branded goods distribution. The ICA may well be increasing its scrutiny in this area.