Under Community competition rules, a vertical exemption is granted for most distribution agreements. This is called the `vertical agreement block exemption`. In some cases, exclusive distribution may be used by manufacturers to restrict competition between them. For example, the FTC challenged the exclusive provisions in the purchase agreements used by two major manufacturers of fire truck pumps. Each company sold pumps to fire truck manufacturers on the condition that any additional pumps were purchased from the manufacturer who had already supplied them. These exclusive supply contracts functioned as a customer allocation agreement between the two pump manufacturers, so that they no longer competed with each other`s customers. The Guidelines on Vertical Restraints specify that “under an exclusive distribution agreement, the supplier undertakes to sell its products to only one distributor for resale in a given territory”. The Guidelines on Vertical Restraints explain that the possible competitive risks of exclusive distribution are mainly aimed at reducing intra-brand competition and market sharing, which may in particular facilitate price discrimination. Exclusive distribution may result in the exclusion of other distributors and restrict competition at this level. If most or all suppliers use exclusive distribution, this can soften competition and facilitate collusion.
Among the decisions of the Chamber of Commerce of the Court of Cassation of 18 November 2020 is an interesting decision on the application of an exclusive distribution agreement. In the present case, an Italian manufacturer of cutting machines had informed a French company (…) Mitsubishi`s conditional 10-year warranty may remain in place* AccC does not preclude an exclusive commercial notice from Mitsubishi Motors Australia Limited (Mitsubishi) regarding its new 10-year or 200,000 km extended warranty. The warranty is subject to the condition that the vehicle (…) To address this issue, the European Commission is now proposing the following adjustments to the existing safe harbour for dual distribution: I. Introduction Much has happened since the last special edition of the electronic competitions on selective distribution in 2014. The growth of e-commerce has further changed the business and commercial strategies of companies. Not only is the use of selective distribution increasing. Manufacturers are (…) Case 2 illustrates the practices of an electronics manufacturer that organizes its distribution network and is interested in e-commerce to sell its products. The case was investigated under the competition laws of the EU, France, Germany, the US and Japan.
Economist and legal director of (…) The relationship between distribution network managers and their distributors is currently the subject of renewed antitrust attention. In the light of both EU and national case-law, certain criteria may be used to determine whether the head of a network must exercise control over his (…) The 9. In July 2021, the European Commission (EC) published a revised draft Vertical Block Exemption Regulation (DDPER) and draft revised vertical guidelines for public consultation. The European Commission has made significant changes, including adjustments to the rules on dual distribution, dual pricing and parity obligations. This practical note often refers to two legal instruments adopted by the European Commission to help parties and their advisers determine the compatibility of their agreements with Article 101 TFEU, namely the Vertical Restraint Block Exemption (VRBE) and the Guidelines on Vertical Restraints. These instruments also feed into the UK competition authorities` approach to the application of UK competition law to an agreement that may affect trade between Member States. FAS Russia advocates the prohibition of borrowers` group insurance for banks* In this way, FAS plans to protect the interests of borrowers and competition in the bank insurance market Marina Pishchulina, Deputy Head of the Department of Financial Market Supervision of FAS (…) If the market share of either party does not exceed 30 %, vertical agreements that do not contain `hardcore restrictions` (including, for example, price maintenance for resale or territorial/customer restrictions) may be considered to be exempted. Agreements which do not fulfil the conditions of the Block Exemption Regulation may nevertheless be compatible with Article 101(1) TFEU, but such agreements require a case-by-case examination. This third volume of the Grand Judgments in Competition Law deals with decision-making practice and case law in the field of unfair commercial practices and distribution agreements. The book brings together more than 120 comments on European and national decisions published in the journal (…) The third edition of the Competition Interviews, which focused on new economic and legal opportunities before the ordinary courts, aimed to highlight the particularities and advantages of these courts in competition law. The need to implement competition rules in a globalised economy that (…) Most EU competition law is transposed into UK law. In particular, the EU block exemption will be maintained in UK law beyond Brexit, meaning that distribution agreements will be able to continue to benefit from the vertical block exemption.
It is always important to consider all other agreements and arrangements in a network (especially if one or more territorial and/or customer-specific restrictions are imposed). Under this type of “broad” parity obligation, providers are prevented from offering better terms on other platforms. This type of parity obligation is now included in the list of so-called grey list clauses (or excluded restrictions – Article 5(d)) and must therefore be assessed individually in accordance with Article 101 TFEU. The Commission is concerned that “broad” parity requirements will make it more difficult for new market entrants to establish a market presence, restrict price competition and restrict access to different distribution channels. In addition, the revised draft Block Exemption Regulation now offers a clear position on a much-discussed topic, namely that suppliers of exclusive distribution systems can oblige their buyers to pass on active sales restrictions to their customers. In accordance with Article 4(b), such disclosure is possible where the buyer`s customer has entered into a distribution agreement with the supplier or with a party to whom the distribution rights have been transferred by the supplier. The amendment aims to improve the protection of investment incentives for exclusive distributors. The health crisis and its consequences have had a direct impact on the trade agreements that have just been signed for 2020 between traders and the food companies that supply them.
This situation has led suppliers to reflect on the different legal mechanisms that (…) Companies involved in anti-competitive behaviour may find that their agreements are unenforceable and risk being fined up to 10% of their worldwide turnover for particularly harmful behaviour. You may also be subject to possible claims for damages from customers. Commission Regulation (EU) No 330/2010 exempts categories of distribution agreements and prevents them from falling within the scope of Article 101(1) of the contract. Has the regulation achieved its objectives? In order to answer that question, it was necessary to exclude the scope of this Regulation before (…) (a) providers of online intermediation services from the benefits of the Safe Harbour when they have a hybrid function, i.e. when they sell goods or services in competition with undertakings for which they provide online intermediation services (Article 2, paragraph (7). Exclusive distribution: In an exclusive distribution agreement, the supplier undertakes to sell its products to only one reseller for resale in a specific territory. At the same time, the trader is usually limited in his active sale to other territories (exclusively allocated). Possible competitive risks are primarily the reduction of intra-brand competition and market sharing, which may facilitate price discrimination in particular. .
