The Competition and Markets Authority (CMA) has hit Ping Europe Limited (Ping) with a fine of £1.45m for refusing to allow their golf clubs to be sold online.
They have also been forced to repeal their online sales ban immediately.
The CMA ultimately found that Ping’s online sales ban was a restriction that could adversely affect competition in the market by closing one of the most important distribution channels available to the retailers involved; i.e. the world wide web.
Ping put the online sales ban in place reportedly as part of its efforts at pursuing an aim of promoting customers to visit their own stores for custom fitting of golf clubs. However, where such selling restrictions can harm competition, they can be breaches of the law.
Two companies were banned from selling the clubs online which prompted the CMA’s investigations.
The issue here is that the restriction on selling via online vendors can restrict competition by taking players out of the market. Not only can it mean players being taken out of the market against their will, but given the conditions were for a ban on online retailers only, prices may have been adversely affected given that consumers often enjoy more competitive prices with online vendors.
It can also limit the ability of consumers to find their product, which can again hamper competition.
Despite the reasons for the ban being down to the commercial aims of Ping, their restrictive conditions of sale were found to have been a breach of the rules by the CMA.
Ann Pope, Senior Director for Antitrust enforcement, 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.”