Background

Economic theory of vertical restraints

Economic theory and competition law

Should distributors have more protection?

Vertical restraints put to the test of economic analysis

Structure of distribution law - Book plan

General bibliography

Introduction

Localizing the anticompetitive effects

Effect on trade between Member States

Scope ratione loci

Concept of an undertaking

Intra-group agreements

Scope ratione personae

Applicability of competition law to vertical agreements

Definition of the relevant market

Anticompetitive object or effect

Appreciability threshold

Concept of agreement and concerted practice

Prohibition of vertical restraints

Block exemptions

Individual exemptions and rule of reason

Exemption of vertical restraints

Control of vertical restraints

Prohibition

Exoneration

Restrictive agreements

Principle

Applications

Abuse of dominant position

Exclusive purchase/Exclusive supply

Resale outside network

International agreement

Exclusive distribution agreements

Manufacturer's guarantee

Protection of the brand

Protecting the network against third parties

Relations between the parties

Selective distribution

Hardcore restrictions

Individual exemptions

Rule of reason

Prohibition of restrictive agreements and individual exemptions

Distribution of new motor vehicles : Regulation No 330/2010

After-sales : Regulation No 461/2010

Block exemption

Motor vehicle distribution agreements

Merger control

Franchising

Commercial agency and competition

EU harmonization

International agency

Commercial agents

This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

European Distribution Law

Independent distributors have constantly demanded that they be afforded the same protected status as dependent distributors, and in particular the right, on termination of their contracts, to a substantial end-of-contract indemnity like commercial agents. There was a renewal of interest in the issue during discussions on the reform of Regulation No 1400/2002. Distributors and independent repairers …

The issues

Independent distributors have constantly demanded that they be afforded the same protected status as dependent distributors, and in particular the right, on termination of their contracts, to a substantial end-of-contract indemnity like commercial agents. There was a renewal of interest in the issue during discussions on the reform of Regulation No 1400/2002. Distributors and independent repairers would like the end of the protective status resulting from the transition of the motor vehicle distribution to the general vertical restraints regime in 2013 to be accompanied by an extension at European level of the protection of commercial agents to independent distributors, already recognized by the laws of some countries. In fact, it would not be appropriate to strengthen the protection of independent distributors at the European level. The demand is not based on any convincing legal grounds and would, on the contrary, considerably limit the efficiency of distribution systems, by raising distribution costs to the detriment of consumers and the economy and ultimately, distributors themselves.

The Commission noted in the evaluation of the impact of Regulation No 1400/2002 that the protection of distributors has led to distorted effects. The protection system for distributors was limited, providing mainly for reasons for ordinary termination to be given, the freedom to transfer within each network and the possibility of multi-brand sales at points of sales, without going as far as imposing a general obligation for compensation at the end of the contract. These different measures, which had no economic justification, did in fact generally lead to a reduction in competition on the market. The purpose of the obligation to state the reason for a termination was to prevent distributors or repairers from being sanctioned by the supplier for pro-competitive initiatives, for example in terms of prices. In fact, the Commission has come upon no case of terminations being used for anticompetitive purposes. In contrast, the obligation to state reasons has led in practice to the disappearance of ordinary terminations which has frozen the structure of distribution networks, protecting the distributors in place and making it more difficult for new operators to enter the market. The object of allowing dealers to transfer their contracts within the network was to facilitate cross-border acquisitions and encourage trade between Member States. Such acquisitions have scarcely ever been carried out. On the other hand, the rule has been exploited within each Member State and has encouraged the concentration of distributors at local and regional levels thereby reducing competition between distributors. Finally, the Commission found that the imposition of multi-branding was devoid of meaning because manufacturers, at the time when they could impose brand exclusivity on their distributors, did not do so when it was not economically viable and allowed for multi-branding in the less dense areas. By contrast, suppliers' fear that their distributors would become multi-brand distributors and therefore less specialized and less efficient in the representation of their brand and at the same time their investment would benefit other brands, has encouraged them to raise their standards for representation and has led to an inflation of distribution costs. Ultimately, none of the measures protective of distributors instituted by Regulation No 1400/2002 has achieved its objectives and they have been instrumental in creating inefficiency and a reduction in competition.

The position of the supervisory authorities

European Distribution Law

13. The issues

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Les notions juridiques connexes

13. The issues

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Les notions juridiques connexes

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