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EU law does not ban courts from ruling on disputes over online sales from websites in other EU countries, rules court

EU law does not automatically ban national courts from ruling on disputes relating to online sales where the sales in question are facilitated from websites based in other EU countries, the EU's highest court has ruled.21 Dec 2016

The Court of Justice of the EU (CJEU) said, though, that national courts will only have jurisdiction to rule in such cases where the activities carried out in other EU countries "resulted in or may result in the alleged damage in the jurisdiction of the court seised".

The Court of Cassation in France, which is equivalent to the UK Supreme Court, had asked the CJEU whether it has the jurisdiction to assess part of claim that concerns the sale of Samsung products on four non-French websites run by Amazon.

The French court specifically asked the CJEU to interpret how EU rules on jurisdictional matters, set out under the Brussels Regulation, apply in an online context.

In the underlying dispute before the French court, online electronics retailer Concurrence wants to prevent rival companies from selling Samsung products on Amazon's websites in France, Germany, Italy, Spain and the UK.

Concurrence was previously a licensed distributor of Samsung products but Samsung revoked the company's right to sell its goods after Concurrence sold them via third-party online marketplaces, contrary to a distribution agreement it had in place with the technology giant.

However, Concurrence has claimed that rival businesses have sold Samsung goods over Amazon's website. It has therefore argued that the terms of the Samsung's contract had not been "uniformly applied to all distributors", according to the CJEU's ruling.

A number of French courts have previously ruled that they did not have jurisdiction to hear Concurrence's case in respect of sales from the non-French websites run by Amazon.

The CJEU said it will be up to the Court of Cassation in France to determine whether the criteria it has set out applies in the Concurrence case to enable it to rule on the underlying dispute.

"The fact that the websites on which the offer of the products covered by the selective distribution right appears operate in member states other than that of the court seised is irrelevant, as long as the events which occurred in those member states resulted in or may result in the alleged damage in the jurisdiction of the court seised, which it is for the national court to ascertain," the CJEU said.

According to French law relevant in the case, businesses that are directly or indirectly involved in reselling goods outside of selective or exclusive distribution agreements imposed by product manufacturers are liable for the harm caused by their actions, provided the agreements in place abide by competition rules.

Generally, EU competition rules, under Article 101 of the Treaty on the Functioning of the EU (TFEU), prohibit businesses from putting in place agreements which have as their object or effect the restriction of competition. However, certain exemptions have been written into EU law to legitimise anti-competitive agreements in some circumstances.

One such exemption from competition law scrutiny applies where vertical agreements satisfy the criteria of the Vertical Agreements Block Exemption (the VABE). Vertical agreements are agreements struck between companies at different stages of a supply chain. Selective distribution systems qualify as one type of vertical agreement that can benefit from the VABE.

Under the VABE Regulation, a selective distribution system is defined as "a distribution system where the supplier undertakes to sell the contract goods or services, either directly or indirectly, only to distributors selected on the basis of specified criteria and where these distributors undertake not to sell such goods or services to unauthorised distributors within the territory reserved by the supplier to operate that system".