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

The cumulative effects theory consists in taking into consideration, when assessing anticompetitive effects, not only the agreement at issue, but all the parallel agreements binding other suppliers to their respective distributors on the market concerned. The doctrine is only subsidiary in nature and, according to the Commission, only comes into play when an agreement does not meet the appreciable …

Cumulative effects doctrine

The cumulative effects theory consists in taking into consideration, when assessing anticompetitive effects, not only the agreement at issue, but all the parallel agreements binding other suppliers to their respective distributors on the market concerned. The doctrine is only subsidiary in nature and, according to the Commission, only comes into play when an agreement does not meet the appreciable effect condition . This now contains two strands; first, the supervisory authorities verify whether a series of similar agreements have as their effect the closing-off of access to the market concerned . It is irrelevant that the agreements would not individually be likely to appreciably restrict competition due to their effects remaining below the threshold defined by the Commission . The cumulative effects theory can only apply to agreements that significantly contribute to a cumulative foreclosure effect resulting from a set of identical agreements .

Assessment of the sealing-off effect, which involves establishing evidence of real, concrete market access possibilities, takes account of the number and size of operators present, the degree of market saturation and customer loyalty to existing brands . The existence of similar exclusive purchasing or supply agreements  or selective distribution agreements  on the same market is therefore liable to seal off market access. A sealing-off effect, however, cannot be established unless the contract in question is similar to the group of contracts within the same context . Furthermore, foreclosure of the market as a result of the cumulative effect of a set of exclusivity agreements cannot be established when the market operates in a highly competitive manner due to the presence of several operators and the possibility for third parties to win calls for tenders .

2º Significant contribution to the cumulative effect

The significant contribution to the cumulative effect criterion was first developed by the Court of Justice and has now been established by the Commission. The Notice on agreements of minor importance  provides that agreements entered into by distributors or suppliers with a market share not exceeding 5%, do not significantly contribute to the cumulative market foreclosure that would result from agreements concluded by several suppliers or distributors.

To assess an agreement's contribution to market foreclosure, the supervisory authorities take into account the effect produced by the supplier's entire network . The supplier's market position , the degree of apparent dependence of sales outlets and the nature and duration of restrictive agreements  are all factors used to assess how significant a contribution an agreement makes to the cumulative effect. On the markets for fuel distribution  or beer supply , only those agreements that exceed the average duration for agreements habitually concluded on the market are found to be anticompetitive . Sometimes, the supervisory authorities may break down the network of a specific supplier in order to focus on only those agreements that contribute significantly to market foreclosure .

The cumulative effects doctrine generally increases the effectiveness of the legal review insofar as it makes it possible to adapt the severity of the control to the degree of concentration of the market concerned by the agreement. From a legal standpoint, the method used is open to criticism even though the EU Court has tempered its scope with the requirement that, for the prohibition to apply, the agreement must sufficiently contribute to the cumulative effect established. Firstly, there is an issue of legal uncertainty, in that undertakings party to an agreement are put in the position where they are unable to predict the exact legal consequences of the commitment entered into, unless they conduct a full survey of the entire market, which is uncertain in itself. Also, the method may lead to treating similar behavior differently by the mere fact that actions take place on separate markets or on the same market but at different times. Such consequences are not exactly compatible with a norm that only aims to police the behavior of undertakings. They demonstrate the “structuralization” of the law on anticompetitive agreements, as the behavior of the undertakings is becoming reduced to the mere trigger for an investigation, the purpose of which is to preserve the competitive structure of the market on which the conduct takes place.

Commission Decision No 93/405 of 23 December 1992, Schöller Lebensmittel GmbH Co. KG, LawLex200500004818JBJ; Commission Decision No 93/406 of 23 December 1992, Langnese-Iglo GmbH, LawLex200500004811JBJ.

Case T-9/93 and T-7/93 Schöller v Commission [1995] ECR II-1611, LawLex200400003649JBJ.

Commission Decision No 1999/230 of 24 February 1999, Whitbread, LawLex200500004733JBJ.

Commission Decision No 98/531 of 11 March 1998, Van den Bergh Foods Limited, LawLex200400002932JBJ.

Commission Decision No 1999/474 of 16 June 1999, Scottish and Newcastle, LawLex200400002630JBJ.

Case C-214/99 Neste [2000] ECR I-11121, LawLex200500004917JBJ.

Case T-25/99 Roberts v Commission [2001] ECR II-1881, LawLex200500005164JBJ.

Case C-214/99 Neste [2000] ECR I-11121, LawLex200500004917JBJ: fuel supply contracts representing only a small proportion of agreements concluded by the supplier (less than 5% of distributors making less than 10% of sales) and can be terminated at any time with a notice period that is of sufficient duration to reasonably protect the economic and legal interests of each of the parties, make no significant contribution to the cumulative effect.

Case T-9/93 Schöller v Commission [1995] ECR II-1611, LawLex200400003649JBJ.

See Case C-234/89 Delimitis v Henninger Bräu [1991] ECR I-935, LawLex200500003931JBJ; Case T-7/93 Langnese-Iglo v Commission [1995] ECR II-1533, LawLex200400003648JBJ; Case T-9/93 Schöller v Commission [1995] ECR II-1611, LawLex200400003649JBJ; See KORAH, The Judgment in Delimitis: A Milestone Towards a Realistic Assessment of the Effects of an Agreement or a Damp Squib?, EIPR, 1992, 167.

See Case C-234/89 Delimitis v Henninger Bräu [1991] ECR I-935, LawLex200500003931JBJ. The Guidelines on Vertical Restraints, at pt 121, specify the criteria of assessment of the cumulative effect: the coverage of the market by similar agreements, whether the agreement is 'imposed' (mainly one party is subject to the restrictions or obligations) or 'agreed' (both parties accept restrictions or obligations), the regulatory environment and behavior that may indicate or facilitate collusion like price leadership, pre-announced price changes and discussions on the 'right' price, price rigidity in response to excess capacity, price discrimination and past collusive behavior.

Case 23/67 Brasserie De Haecht v Wilkin Janssen [1967] ECR 525, LawLex200400002686JBJ; Case T-9/93 Schöller v Commission [1995] ECR II-1611, LawLex200400003649JBJ; Case C-214/99 Neste [2000] ECR I-11121, LawLex200500004917JBJ.

Case 31/80 L'Oréal v De Nieuwe AMCK [1980] ECR 3775, LawLex200400002967JBJ. See also Case C-393/92 Gemeente Almelo and others v Energiebedrijf IJsselmij [1994] ECR I-1477, LawLex200400002880JBJ: relative to a set of agreements between a regional distributor and local distributors. In this case, the assessment focused more on the anticompetitive consequences of a particular network than on the reduced effects of an agreement because of its inclusion in a bundle of restrictive agreements.

Commission Decision No 2000/484 of 29 June 2000, Inntrepreneur - Spring, LawLex200500004716JBJ: absence of cumulative effect of the leases with purchasing obligations entered into by pub chains and the contracts for beer concluded by the brewers, to which they differ fundamentally insofar as that the chains are not tied to a specific brewery.

Case T-699/14 Topps Europe Ltd, Judgment of 11 January 2017, LawLex201700000067JBJ.

See Commission Notice No 2014/C 291/01 of 30 August 2014.

European Distribution Law

31. Cumulative effects doctrine

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

31. Cumulative effects doctrine

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise