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

Under Article 2 of Regulation No 2022/720, the exemption applies to vertical agreements which Article 1 defines as agreements or concerted practices between two or more undertakings each operating, for the purposes of the agreement or concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell …

Scope of the exemption

Under Article 2 of Regulation No 2022/720, the exemption applies to vertical agreements which Article 1 defines as agreements or concerted practices between two or more undertakings each operating, for the purposes of the agreement or concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services. Consequently, a commercial partnership agreement concluded between two undertakings operating on different product markets, which are not upstream or downstream of each other, does not fall within the scope of the exemption, where its purpose is to encourage the development of sales of the products of these two undertakings by means of a mechanism of promotion and cross-reductions, with each of these undertakings bearing a share of the costs linked to the implementation of this partnership .

Regulation No 2022/720 lays down a presumption of legality (safe harbor) where the market share of the supplier and the distributor who are parties to the agreement on their respective relevant market does not exceed 30% (Article 3), with the distributor's market share being calculated on the market on which he buys the contract goods or services in question (Guidelines of 2022, pt 171), provided that the agreement does not contain any black clause (minimum and fixed resale price clause, clause granting absolute territorial protection, clause prohibiting cross-supplies...). Above that threshold, there can be no presumption that a vertical agreement will usually give rise to objective advantages which will compensate the disadvantages which they create for competition, and there is no presumption that such an agreement is either caught by Article 101(1) or that it fails to satisfy the conditions of Article 101(3) (Regulation (EU) No 2022/720, recital 9). However, where the undertaking holds a market share that exceeds 30%, it can only benefit from individual exemption. 

The block exemption regulation does not apply to agreements which may not appreciably affect trade between Member States  or which do not have as their object or effect the restriction of competition . On the other hand, an agreement, which falls under the Article 101(1) TFEU prohibition due to the cumulative effect of a series of similar agreements is likely to benefit from a block exemption .

Contractual freedom is a fundamental principle even in the presence of an exemption regulation. It therefore follows that a clause not covered by the regulation is not presumed to be unlawful, and thus cannot be declared null and void. That rule, established by the courts under the early regulations, has even greater force under the new generation regulations which exempt all restrictions in an agreement which are below the exemption thresholds where the agreement falls within the scope of the regulation and does not contain any black clauses .

Case C-331/21 EDP, Judgment of 26 October 2023, LawLex202300012732JBJ.

Case C-117-12 La Retoucherie de Manuela SL, Judgment of 7 February 2013, not available in English.

Commission Notice No 2001/C 368/07 on agreements of minor importance. See also Case C-384/13 Estación de Servicio Pozuelo 4 SL, Order of 4 December 2014, not available in English, which stresses that an agreement which does not respect the criteria provided in the vertical restraints regulation does not necessarily mean that it appreciably distorts competition and is incompatible with Article 101(1) TFEU.

Case 47/76 De Norre v Brouwerij Concordia [1977] ECR 65, LawLex200400002803JBJ.

See Case 10/86 VAG France v Magne [1986] ECR 4071, LawLex200500004435JBJ: the entry into force of the motor vehicle regulation does not have the effect of rendering null and void those clauses in dealership agreements that are not compliant with it.

European Distribution Law

39. Scope of the exemption

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

39. Scope of the exemption

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