EU Court Rules on Pierre Fabre’s Internet Sales Case

A ruling by theCourt of Justice of the European Union (CJEU) says Pierre Fabre Dermo-Cosmetique can block Internet sales by some of its product distributors only if it can provide a legitimate reason.

The ruling countered a 2008 finding that Pierre Fabre’s ban on Internet sales in its distribution agreements was anticompetitive. French judges had asked the CJEU for a clarification on the issue after a court adviser had said in March a ban on Internet sales restricted competition.

Pierre Fabre Laboratories have been opposed to the sale of dermo-cosmetic products on the Internet for many years. The Laboratories have argued that only the physical presence of a qualified pharmacist guarantees consumers the quality of pharmaceutical and personalized advice that is tailored to meet their expectations of efficiency and safety. In addition, selling dermo-cosmetic products promotes their counterfeiting and deprives them of the cosmetovigilance monitoring completed by highly qualified pharmaceutical professionals.

Following the injunction of the French Competition Board to allow its distributors to sell on the Internet, Pierre Fabre Laboratoires took the case to the Court of Appeal in Paris in October 2008. The Court acknowledged the merits of the arguments raised by Pierre Fabre Laboratoires and suspended the injunction until further notice.

To decide on the merits, the Court of Appeal in Paris sought the opinion of the CJEU.

According to Pierre Farbe, in a judgement released yesterday, the CJEU supported by and large the conclusions of its Advocate General, who had already ruled on the matter on March 3rd. Thus, it considers that a total ban on Internet sales restricts competition on principle. It did point out, however, that under certain circumstances individual exemptions may be granted. It is now up to the Court of Appeal in Paris to decide whether Pierre Fabre Laboratories are entitled to benefit from it.

Pierre Fabre Laboratoires have taken note of the opinion of the European Union Court of Justice. They are satisfied that it opens the possibility of an individual exemption from a general principle. Since the start of the case, Pierre Fabre Laboratoires have stressed that dermo-cosmetic products are primarily health products, often integrated by dermatologists and paediatricians into the course of medical care, and as such they enjoy a special status that prevents their distribution on the Internet.

Pierre Fabre Laboratories are now awaiting the decision of the Court of Appeal, which should be released in the first half of 2012. More than ever, they are convinced that the consumer’s best interest relies on personalized advice tailored to meet their expectations of efficiency and safety.