The Competition and Markets Authority (CMA) have fined golf club manufacturer Ping Europe Limited (Ping) £1.45 million for banning retailers from selling its golf clubs online: https://www.gov.uk/government/news/cma-fines-ping-145m-for-online-sales-ban-on-golf-clubs
The CMA continues its ongoing focus on online sales activities by deciding to fine Ping for adopting this blanket ban approach. Suppliers, distributors and retailers must be careful to ensure that their commercial agreements do not contain terms which have the equivalent effect. This type of activity is likely to fall foul of competition law and, as this case demonstrates, fines can be significant (potentially up to 10% of annual worldwide group turnover).
Ping's genuine commercial aim to promote custom in-store fittings of its golf clubs was not sufficient to avoid the sanction applied, which indicates that even potentially legitimate reasons for limiting online sales may be deemed to be anti-competitive. This doesn’t render unenforceable agreements which set particular conditions or minimum standards, but terms need to be carefully drafted to avoid a similar fate to that of Ping.
The level of the fine imposed on Ping reflects that the CMA found the breach of competition law occurred in the context of a genuine commercial aim of promoting in-store custom fitting.