VERTICAL RESTRICTIONS AND ONLINE SALES: THE ITALIAN COMPETITION AUTHORITY HAS OPENED A FORMAL INQUIRY INTO MORELLATO S.P.A.
On 18 March 2025, the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, hereinafter “AGCM”) resolved to open a formal inquiry into Morellato S.p.A. for alleged anti-competitive practices in breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU). In particular, the AGCM considers that the contractual prohibition imposed by the company on its authorised distributors from selling Morellato products on third-party marketplaces – within a selective distribution system – may constitute a vertical agreement that restricts competition.
Background
Following an anonymous report submitted through the Authority’s whistleblowing platform, the AGCM reviewed the distribution agreement in place between Morellato and its authorised distributors. The contract expressly states that “sales through online shops and resellers, as well as through third-party platforms (such as Amazon, eBay, etc.), are not permitted.” Notably, however, Morellato itself actively markets its products on those same platforms.
Legal Framework
The inquiry is based on Article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements between companies that aim to prevent, restrict, or distort competition within the internal market. However, the same article provides that such agreements may be considered lawful if they generate benefits for the market, by improving the production or distribution of goods or by promoting technical and economic progress.
In this respect, Regulation (EU) No. 729/2022 clarifies which agreements benefit by default from an automatic exemption and are therefore not subject to the prohibition under Article 101 TFEU. In particular, the Regulation states that the exemption applies where the parties hold a market share of less than 30% and the agreement does not contain so-called hardcore restrictions. Among these hardcore restriction, Article 4 of the Regulation includes practices that prevent the effective use of the internet for the sale of products.
On this point, the European Commission’s Guidelines on vertical agreements examine restrictions on the use of online marketplaces, stating that imposing a general ban on such platforms may constitute a hardcore restriction of competition, especially when not justified by adequate and proportionate reasons.
The Authority’s Assessment
In light of the above, the AGCM found that the absolute prohibition imposed by Morellato on its authorised distributors from selling products on third-party marketplaces – while the company itself maintains a direct presence on those same platforms – may constitute an unjustified vertical restriction, in breach of Article 101 TFEU. The Authority noted that, although a restriction on the use of marketplaces may, in principle, be compatible with European competition law – as clarified by the case law in Coty concerning selective distribution – such compatibility requires that the restriction pursue legitimate objectives and be applied consistently.
In this case, however, the AGCM identified a significant asymmetry between the obligations imposed on distributors and Morellato’s freedom to operate through the same online channels. This disparity undermines any justification based on the aim – typical of selective distribution systems – of preserving the brand image, as provided for in the contractual terms. In this context, the restriction appears not only disproportionate, but also capable of hindering the effective use of the internet as a distribution channel, limiting access to a potentially cross-border market and thereby adversely affecting trade between Member States.
Conclusions
On the basis of the above considerations, the AGCM decided to open a formal inquiry into Morellato S.p.A., which is expected to conclude by 20 March 2026. The outcome of the inquiry will be significant not only for the specific case at hand, but also for clarifying the applicable limits of selective distribution systems in e-commerce, within a regulatory framework that seeks to balance contractual freedom for businesses with the need to ensure fair access to digital channels.
FAQs
- Is it lawful to prohibit authorised distributors from selling products on marketplaces such as Amazon or eBay?
Yes, but only where there are objective and proportionate justifications, such as the need to protect brand image within a selective distribution system. Moreover, the restriction must be applied in a non-discriminatory manner.
- Can a supplier reserve the use of marketplaces for itself while prohibiting its authorized distributors from using them?
Such a restriction may be unjustified or disproportionate. Preventing distributors from accessing marketplaces while the supplier itself operates on those platforms undermines the credibility of any justification based on brand protection or image and may constitute a vertical restriction prohibited under Article 101 TFEU.
- What does it mean to hinder the effective use of internet in commercial distributions?
It means limiting distributors’ access to relevant online sales channels, such as marketplaces, thereby reducing their visibility and competitiveness. If such restrictions are not justified by objective and proportionate reasons, they may amount to hardcore restrictions prohibited under European competition law.
- Can a ban on sales through marketplaces affect trade between EU Member States?
Yes, because marketplaces make it easier to reach customers in other countries. Preventing distributors from using them may limit cross-border sales and hinder the free movement of goods, potentially resulting in a breach of Article 101 TFEU.
