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

European law provides its own definition of its spatial scope of application. Article 101 TFEU prohibits restrictive agreements having as their object or effect the restriction of competition “within the internal market”. The type of connection that has to exist between the anticompetitive practice and the Union has been laid down in the case law. Although in the past the courts favored the effect …

Localization of anticompetitive effects

European law provides its own definition of its spatial scope of application. Article 101 TFEU prohibits restrictive agreements having as their object or effect the restriction of competition “within the internal market”. The type of connection that has to exist between the anticompetitive practice and the Union has been laid down in the case law. Although in the past the courts favored the effects or objective territoriality theory, the EU authorities now appear to lean more towards the so-called “implementation” doctrine.

Article 101 TFEU is applied in principle where the effects of alleged restrictive agreements or practices by undertakings are felt within the Union . In such a case, the fact that some of the undertakings having engaged in anticompetitive behavior are based outside the Union is irrelevant . Conversely, the provision does not apply to an agreement between undertakings of the Union which only produces effects on exterior markets . However, when the external companies have subsidiaries on the territory of the Union, the anticompetitive behavior and the restrictive effects are located in the Union and the subsidiaries of such companies are the formal perpetrators of the behavior. In those circumstances, EU authorities, applying a single economic entity doctrine, do not refer to the effects theory: the behavior is first attributed to the subsidiaries within the internal market and then to the parent company established elsewhere. However, a relationship of control must be established and that control must be effective . According to recent case law, holding the whole capital of a subsidiary is sufficient to create a rebuttable presumption that the parent company does in fact exercise a decisive influence over its subsidiary, which allows the Commission to hold it liable for an offense in which it is not personally involved .The single economic entity theory has the advantage of avoiding the implementation difficulties related to the extraterritorial application of competition law.

The implementation theory is not of general application since it depends on the presence of subsidiaries within the European territory. The effects-based approach seems to create too broad a jurisdictional scope since the same anticompetitive behavior can result in multiple anticompetitive effects occurring on national markets which are different. Thus, the control authorities now seem to replace the effects criterion with the more restrictive implementation theory: for EU law to apply, participating undertakings must have implemented the anticompetitive practices within the Union . According to the Court of Justice , “an infringement of Article [101 TFEU], such as the conclusion of an agreement which has had the effect of restricting competition within the common market, consists of conduct made up of two elements, the formation of the agreement, decision or concerted practice and the implementation thereof. The decisive factor is therefore the place where it is implemented”. The Court prefers the “qualified behavior” to the “qualified effects” theory . It is not necessary that the behavior of the undertaking be fully realized within the Union, but the mere fact that anticompetitive effects are produced on it is not enough either. The anticompetitive behavior must have been implemented in the internal market. The implementation or “qualified behavior” criterion requires that a chronological and material distinction be made between the different acts making up the anticompetitive behavior: only a definitive act, binding in its scope, is relevant to trigger the jurisdiction of the Union in respect of undertakings located in non-Member States . In light of the most recent case law, where there is trade with third countries and the practices are implemented within the EU, it is sufficient, in order to justify the Commission's jurisdiction under public international law, to establish either the qualified effects of the practice in the European Union or that it was implemented in the European Union .

See for practices relating to exports whose effects are felt in the Union: Commission Decision No 78/163 of 20 December 1977, The Distillers Company Limited - Sales and price conditions, LawLex200400002397JBJ.

See Case 22/71 Béguelin Import v G.L. Import Export [1971] ECR 949, LawLex200400002766JBJ, according to which the fact that one of the undertakings participating in an agreement is located in a third country does not preclude the application of the rules of competition, where the agreement in question prevents the distributor from re-exporting the products in question to other Member States or prohibits the importation of the products from other Member States in the protected area.

See Commission Decision No 70/332 of 30 June 1970, Kodak, not available in English: a ban on exports outside the internal market is not likely to produce an effect in the internal market when re-imports to the Union are unlikely; No 71/22 of 23 December 1970, Supexie, not available in English; No 72/238 of 9 June 1972, Raymond-Nagoya, not available in English; No 77/100 of 21 December 1976, Junghans, LawLex200400003544JBJ; Case C-306/96, Javico v Yves Saint Laurent Parfums [1998] ECR I-1983, LawLex200400003612JBJ, at pts 19 and 26.

See Cases 6/73 and 7/73 Istituto Chemioterapico Italiano and Commercial Solvents v Commission [1974] ECR 223, LawLex200400002884JBJ. See also Case 48/69, ICI v Commission [1972] ECR 619, LawLex200400003459JBJ. The legal separation between the parent and the subsidiary due to their distinct legal personality does not prevent them from being caught by the rules of competition as a single economic entity and or from being be jointly and severally penalized. This greatly simplifies the enforcement of the rules since a fine imposed on the parent located outside the territory of the Union can be entirely recovered from the subsidiary.

 Case C-97/08 P Akzo Nobel and others v Commission [2009] ECR I-8237, LawLex200900003054JBJ: Holding the whole capital of a subsidiary is sufficient to create a rebuttable presumption that the parent company effectively exercises a decisive influence over its subsidiary, which allows the Commission to hold it liable for an office in which it is not personally involved.

See Case 89/85 Ahlström Osakeyhtiö and others v Commission [1988] ECR 5193, LawLex200500003941JBJ.

According to which it is enough that the effect of a practice be immediate, substantial and foreseeable for the jurisdiction of the EU authorities to apply to it: for concentrations, see Case T-102/96, Gencor v Commission [1999] ECR II-753, LawLex200500004258JBJ.

Case 89/85 Ahlström Osakeyhtiö and others v Commission [1988] ECR 5193, LawLex200500003941JBJ.

Case T-286/09 Intel Corp, Judgment of 12 June 2014 LawLex201400002078JBJ, upheld in Case C-413/14 P Intel Corporation, Judgment of 6 September 2017, LawLex201700001368JBJ; on the alternative nature of the criteria see also Case T-8/16 Toshiba, Judgment of 12 July 2019,   LawLex201900000929JBJ.

European Distribution Law

17. Localization of anticompetitive effects

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

17. Localization of anticompetitive effects

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise