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Ping falls foul of Competition Law

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Ping falls foul of Competition Law

A recent court case has highlighted the legal position regarding sales bans in the rapidly evolving world of consumer
technology and online sales.

Following an investigation into the sports equipment sector, the Competition and Markets Authority (CMA) in June 2016
stated the online sales ban imposed by Ping Europe Ltd, the European arm of the well-known golf club manufacturer, was in
breach of EU and UK competition law.

In response, Ping asserted that such a ban was a necessary and commercially important part of its overall commitment to
quality via the provision of tailored club fitting services to end customers via an established channel of approved
retailers – a service that is not possible to deliver online. In response, the CMA accepted that Ping was genuine in its
intentions and is allowed to require a retailer to meet such conditions, but that this would also have to be compliant with
EU and UK competition law. Ping was fined £1.45m fine on for a breach of competition law by preventing two UK retailers
from selling their products on their own websites, and also ordered Ping to end such online sales bans for any other
similar retailers.

The CMA decision sends a clear warning to retailers using distribution and franchising channels to sell their products that
online sales bans are likely to be unlawful. Ann Pope, Senior Director for Antitrust enforcement at the CMA said:

The internet is an increasingly important distribution channel and retailers’ ability to sell online, and reach as wide a
customer base as possible, should not be unduly restricted. The fine the CMA has today imposed on Ping should act as a warning to companies that preventing its products from being sold online could be illegal"

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