English version

Together, the companies concerned by the proceedings set up a selective distribution network for cosmetics and personal hygiene products distributed on the basis of pharmaceutical advice: pharmacies, parapharmacies or specialist sections in supermarkets or department stores offering customers personalized advice by qualified pharmacists.

The Conseil de la concurrence has the power to "accept commitments offered by companies or bodies which are likely to end the anticompetitive practices". The rules governing this procedure are laid down by Decree 2005-1668 dated 27 December 2005.

The practices concerned

The proceedings opened by the Conseil concern active or passive sale restrictions, which raise problems in that they completely prohibit Internet-based sales or involve the manufacturers placing excessive restrictions on the distributors approved for this type of sale.

The competition concerns

Article 4 of EU Commission Regulation n°2790/1999 dated 22 December 1999 concerns the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices. It stipulates that the block exemption granted to vertical agreements does not extend to those which involve "the restriction of active or passive sales to end users by members of a selective distribution system operating at the retail level of trade" (point c).

Chapter 3 of the Commission guidelines on vertical restraints of 13 October 2000, entitled "Hardcore restrictions under the Block Exemption Regulation", stipulates that: "every distributor must be free to use the Internet to advertise or to sell products. A restriction on the use of the Internet by distributors could only be compatible with the Block Exemption Regulation to the extent that promotion on the Internet or sales over the Internet would lead to active selling into other distributors' exclusive territories or customer groups (...). The supplier may require quality standards for the use of the Internet site to resell his goods (...). The latter may be relevant in particular for selective distribution. An outright ban on Internet or catalogue selling is only admissible if there is an objective justification. In any case, the supplier cannot reserve to itself sales and/or advertising over the Internet" (point 51) (…).
The hardcore restriction set out in Article 4(c) of the Block Exemption Regulation (…) means that dealers in a selective distribution system (…) cannot be restricted (…). For instance, in a selective distribution system the dealer should be free to advertise and sell with the help of the Internet." (point 53).

The commitments offered

¨ The commitments offered by the company Bioderma

The company Bioderma has sent the Conseil a set of proposed commitments, intended to amend article 3.1 of its approved retailer agreement, by removing the exclusivity requirement imposed on the sale of Bioderma products at the physical point of sale approved under the terms of the agreement. Bioderma has offered to make two amendments to Addendum II to the said agreement, which concerns sales over the Internet. The proposed amendments are as follows:
- in Article 1, altering the response times for consumer requests, to ensure they are compatible with the opening hours of the physical point of sale, and including an obligation to provide a response within 24 hours if the request is submitted during the point of sale's opening hours, and within 48 hours if the request is submitted whilst the point of sale is closed; also, removing the last paragraph of this article, which includes an obligation regarding the use of a webcam to view the consumer and the sending of samples on demand;
- in Article 2, stipulating that the secure on-line payment point must not contravene the image of Bioderma products, inserting an obligation to accompany any order for Bioderma products with the samples of the brand's products, and forbidding the use of Bioderma's brand or company name as a keyword in search engines.

¨ The commitments offered by the company Caudalie

The company Caudalie undertakes to offer all the members of its distribution network an amended standard distribution agreement, which includes the option of signing an "Internet distance selling" agreement, as an addendum to the former and which stipulates:

- that the website must be of a quality, technical design and appearance that comply with the Caudalie brand's graphic charter (article 3.1), and that for each Caudalie product there must be a separate page including, in addition to a full description and notice accessible on-line, a "non-pixellated 10 cm photograph, with 72 dpi (dots per inch) quality" (article 4);
- that the site must indicate that the distributor is officially approved by Caudalie and show the address of the physical point(s) of sale, accompanied by a photograph depicting the outlet(s) (article 2);
- that the section of the site reserved for the sale of Caudalie products must display the following message at all times: "Caudalie strongly advises on-line customers to visit the physical retail outlet(s) whose address(es) can be found on the website. There, they will receive direct, personalized advice based on their skin type and any skin problems, from a consultant-pharmacist or other qualified staff. Despite technical advances, there is still no substitute for direct contact with a consultant-pharmacist or qualified person, who are best able to provide customers with everything they have come to expect from Caudalie products." (article 3.3);
- that an advisory service must be set up, staffed by a consultant-pharmacist as part of a "hotline" open from 9am to 6pm, Monday to Friday, except public holidays, along with an e-mail service that guarantees a response to visitors questions within a maximum of 48 hours (article 6);
- that Caudalie's prior written authorization must be sought for advertisements or promotions concerning its products and that devaluing terms such as "discount" must not be used;
- that an assortment of samples and a brochure containing information on Caudalie products must be sent with the order (article 7);
- that sales may be extended outside France "provided the site is translated into the language of the country concerned and personalized advice is offered in the said language, including by telephone" (article 8).

¨ The commitments offered by the company Cosmétique Active France (L'Oréal)

The company Cosmétique Active France (L'Oréal), which distributes Vichy and La Roche-Posay products, offers to send a letter to all the distributors of these two brands approved for a physical point of sale, informing them that there is an Internet addendum to the approved distributor agreement, and they have the option of signing it. Compared with the existing addendum which applies only to Vichy products, the new addendum contains the following provisions:

- it ends the requirement for a direct viewing in order to conduct a cosmetological diagnosis "by means of videoconferencing equipment or by sending digital photographs" (formerly article 6.3);
- it replaces the obligation to establish an "interactive real-time dialogue" with the potential purchaser (formerly article 6.4), with a new obligation to provide an assistance and advisory service via e-mail or telephone, accessible during the physical point of sale's normal opening hours, giving a personalized response to visitors' questions "immediately wherever possible and within a maximum of 48 hours" (new article 3, paragraphs 3 to 5);
- it requires the distributor to speak and understand the language of the country in which the site is based and, if it wishes to publish versions of its site in several languages, to speak and understand each of the languages used (new article 3.6);
- it prohibits the distributor from offering or practising on the site any sale conditions, promotional offers or customer loyalty programmes which differ from those offered or practised in the physical point of sale (new article 4.1);
- it removes the obligation to provide samples "to any website visitor who requests them" (formerly article 8.2);
- it requires the distributor to use the product descriptions supplied by the manufacturer, or failing that, to submit any descriptions drafted by itself for prior approval by the manufacturer (article 2.4).

¨ The commitments offered by the company Expanscience (Mustela brand)

The company Expanscience offers to amend the Internet addendum to its approved retailing distributor agreement as follows:

- in article 4 (b), specifying that "top of the range products" which must be exclusively sold on the site are "products usually and traditionally sold on the basis of pharmaceutical advice", and removing the requirement for a single payment point;
- in article 6 (a), modifying the times and days during which a competent person must provide professional advice in response to any consumer request or question. This service needs henceforth be provided only six (rather than seven) days per week, from 8am to 8pm. However, the new version of the addendum shall specify that questions submitted between 8pm and 8am must receive a response from 8am the following day, with this period extended to 24 hours if the question is submitted on a public holiday or non-business day;
- in article 6 (c), replacing the clause requiring the distributor to answer questions in English, Spanish, Portuguese, Italian, German and Dutch, with a clause requiring it to provide responses in French and/or English and/or Spanish to any questions submitted to its website in French and/or another language;
- in articles 6 (d) and 6 (f), stipulating that samples to be sent compulsorily at the consumer's request must be sent "whilst stocks of samples supplied by Expanscience last";
- in article 6 (e), removing the requirement to publish a questionnaire on consumers' skin types and possible skin problems on its website in Portuguese, Italian, German and Dutch. Henceforth, the distributor shall only be required to publish this questionnaire in French, English and Spanish;
- extending the maximum delivery period indicated in article 7 (b) from 48 hours to 72 hours;
- in article 9, amending the conditions for listing of Expanscience brands in search engines, inserting a requirement for them to be pre-approved by Expanscience.

¨ The commitments offered by the company Johnson & Johnson (Roc and Neutrogena brands)

The company Johnson & Johnson Consumer France offers to adopt an "approved Internet distributor agreement", contractually separate from its standard approved distributor agreement. Consequently, distributors who do not possess an approved physical point of sale ("pure players") would nonetheless be able to obtain official approval by Johnson & Johnson to distribute its products over the Internet, provided they meet the selection criteria laid down in the agreement. These criteria:

- require the distributor to offer a site with an aesthetic design commensurate with the quality of Johnson & Johnson skincare products, accessible 24 hours a day, seven days a week, with product display pages pre-approved by Johnson & Johnson (article 4);
- require the distributor to provide a "Q&A" section, reserved for questions submitted to the "Consultant Pharmacist" via e-mail addresses that can be accessed from 9am to 7pm, allowing on-line answers to be given during these times, "immediately wherever possible and in all cases within 12 hours, excluding Sundays and public holidays" and, outside these times, within 24 hours (articles 4 and 6);
- prohibit the distributor from responding to orders for more than 10 identical products without first obtaining written consent from Johnson & Johnson (article 8);
- prohibit the distributor from accepting a transaction with a purchaser outside the European Union or delivering products to an address outside the European Union (article 8);
- require the distributor to prepare and dispatch orders from the product storage zone or warehouse (article 9).

¨ The commitments offered by the company Lierac

The company Laboratoire Lierac has set out the main lines of its Internet addendum, which would be offered to all of its approved retailers. They include:

- the creation of a site whose graphic and technical quality does not devalue the high quality image of the Lierac brand, and which displays Lierac products in compliance with the company's graphic charter;
- an obligation to ensure that the site via which products are sold on the basis of pharmaceutical advice is sufficiently clearly identified as a "dedicated section", if the site also operates through a generalist site (point B 5);
- permanent access to a "hotline" staffed by qualified pharmacists and which guarantees a response to consumers' questions within 24 hours, excluding Sundays and public holidays (point D 2);
- a ban on delivering more than three units with the same reference code per order (point D-6) and a commitment to guarantee suitable storage and transport conditions (point C);
- a ban on using the Lierac brand to "facilitate" applications to have the site listed with search engines (point B 9); on this issue, the company Lierac has declared that by introducing this particular clause, it is seeking to control paid site listings, but not so-called natural listings.

¨ The commitments offered by the company Nuxe

Until now, the company Laboratoire Nuxe did not have an approved retailer agreement. Aware "of the importance of laying down good rules on the distribution of (its) products", it has decided, in view of the current proceedings, to adopt an approved distributor agreement and an Internet sales charter, to be offered to distributors from 2 November 2006 for signature in early 2007. The main provisions of the charter covering on-line sales are as follows:

- the approved distributor's website is a "complement" to the approved physical point of sale (article 2);
- the on-line advice offered to consumers must be provided by a qualified pharmacist within a maximum of 72 hours;
- the products' presentation and environment must comply with the image of Nuxe products, and the technical and marketing information relating to them must be pre-approved by Laboratoire Nuxe before they are published on-line;
- The use of the Nuxe company name or brand as a keyword in paid search engines must receive express prior consent from Laboratoire Nuxe (article 4);
- Any advertising referring to Nuxe products must be submitted for Laboratoire Nuxe's prior written approval;
- The approved distributor may not sell products outside the European Economic Area (EEA), and undertakes "to refrain from complying with any order for products which appears abnormal (in terms of frequency or quantity) for an end consumer". Products must be delivered within a maximum of 72 hours. (article 5).

¨ The commitments offered by the company Oenobiol

The company Oenobiol offers to establish an "Approved Purchaser-Internet Charter" as a complement to its general terms of sale. The planned charter would restrict the creation of sites selling Oenobiol over the Internet solely to approved distributors with a physical point of sale, who notify Oenobiol of their project and the domain name they have reserved, 30 days before the site opens to the public (article 2). Concerning the content and quality of the site, the planned charter stipulates that:

- the site must have a general presentation that reflects the image of the Oenobiol brand, and is able to display its products positively on a dedicated page, strictly avoiding the use of devaluing slogans, images or terms (article 4.1);
- the site may offer other brand products "presenting specific features similar to those of Oenobiol products" for sale at any time (article 4.2);
- consumers must be guaranteed advice "identical to that which might be provided by a pharmacist at a physical point of sale", with a qualified pharmacist answering consumers' questions by e-mail within 48 hours (article 4);
- distributors must not comply with orders "which do not correspond to a consumer's personal consumption and utilization", and must not deliver to local and regional administrations, works councils, traders, wholesaler or non-approved retailers (article 4.4).

¨ The commitments offered by the company Rogé Cavaillès

The company Rogé Cavaillès offers to modify article 3 of the Internet addendum to its Approved Distributor's Charter, to change the obligatory response time, currently set at a maximum of two hours, for answering messages left on the approved distributor's voicemail or e-mail. The company offers to raise the said response time to six hours maximum for messages left between 9am and 6pm on business days, to 15 hours for messages left between 6pm and 6am on business days, and to 24 hours for requests for information submitted on Sundays and public holidays. This response time may be extended if the public holiday concerned immediately precedes or follows a Sunday.

¨ The commitments offered by the company Laboratoires dermatologiques d'Uriage

The company Laboratoires dermatologiques d'Uriage has sent the Conseil a set of proposed commitments, intended to create two things: firstly, a retailing distributor agreement to replace the current general terms of sale, article 7 of which prohibits the sale of Uriage products over the Internet; and secondly, an addendum specifying the conditions governing Internet sales. Article 4.4 of the new agreement will refer to the addendum for mail-order or Internet sales.

The draft addendum stipulates that:

- the approved distributor's website must be exclusively dedicated to providing advice on and selling skincare products sold on the basis of pharmaceutical advice (article 2.1.1);
- the website's presentation must reflect the image of the Uriage brand and its products, and devaluing or obtrusive promotional terms or techniques must not be used;
- a photograph and the precise address of the approved distributor's physical point of sale must appear on the website;
- any listing which involves payment of a fee or requires "the approved distributor to deliberately approach search engines and/or listing sites and/or sites designed to put the approved distributor in contact with users" must be pre-approved by Laboratoires dermatologiques d'Uriage (article 2.1.9);
- the manufacturer must give its prior agreement regarding the presentation of Uriage products; "owing to (their) technical nature", products' properties must only be described using the texts supplied to that end by Laboratoires dermatologiques d'Uriage (article 2.2.4);
- photographs, films or events produced by Uriage to promote the brand or its products must be included on the site at the request of Laboratoires dermatologiques d'Uriage (article 2.3.1);
- a telephone advisory service, which may not be sub-contracted, shall be available during the opening hours of the point of sale, and in all cases between 9am and 7pm every business day, accessible via a freephone or standard rate telephone number; a voice message and an e-mail will enable a response to be made to requests for information and personalized advice within a maximum of 24 business hours. This advice or information must be issued by a qualified pharmacist (article 2.4);
- the site must be exclusively in French. However, the approved distributor may sell products to a consumer speaking another language, provided the qualified person who issues the above-mentioned advice or information speaks the language concerned fluently;
- the distributor "shall introduce a system to prevent the consumer from purchasing more than five units of products from each reference per order", and also a warning system that detects and immediately informs Laboratoires dermatologiques d'Uriage "when an order is placed for a quantity greater than 24 units of a single product by a single purchaser or at a single order or delivery address within a one-year period" (article 3.2);
- products may only be shipped to countries in the European Economic Area (EEA) within delivery periods not longer than five business days following the order date; furthermore, the approved distributor must not ship orders "if it is unable to guarantee that the products concerned will not be exposed to temperatures or storage and transport conditions that might alter their technical, bacteriological characteristics and/or active ingredients" (article 4).

Interested third parties are invited to submit their comments regarding these proposed commitments by 14 December 2006, by post to the Conseil de la concurrence's procedural office:
Conseil de la concurrence
11, rue de l'échelle
75001 PARIS

If it is deemed that these commitments are likely to satisfy the competition concerns expressed during the proceedings, the Conseil de la concurrence will indicate that there are no longer any grounds to continue, and will close the case by taking due note of the commitments, which will subsequently become binding. 

> The commitments proposed by the company Bioderma (French version)

> The commitments proposed by the company Caudalie (French version)

> The commitments proposed by the company Cosmétique Active France (L'Oréal)

> The commitments proposed by the company Expanscience (marque Mustela)

> The commitments proposed by the company Johnson & Johnson (marques Roc et Neutrogena)

> The commitments proposed by the company Lierac

> The commitments proposed by the company Nuxe

> The company proposed by the company Oenobiol

> The commitments proposed by the company Rogé Cavaillès

> The commitments proposed by the company Laboratoires dermatologiques d'Uriage