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

If the objective of the restriction is to improve production or distribution of goods or to promote economic progress, it qualifies for the exemption provided in Article 101(3) TFEU where it is not only indispensable to the attainment of such objective but also necessary. This condition means that not only should the restrictive agreement itself be reasonably necessary for the attainment of the efficiencies, but the individual restrictions of competition that flow from the agreement must also be so .

A restriction of competition has a necessary character if more efficiency gains are generated with the agreement or the restriction in place than without it. There must not be any other economically more feasible and less restrictive means of achieving them . The restriction must also be proportionate .

The Guidelines on Vertical Restraints require the Commission to examine whether individual restrictions make it possible to perform the production, purchase and/or (re)sale of the contract products more efficiently than would have been the case in the absence of the restriction concerned taking into account the market conditions and the realities facing the parties. A restriction will be treated as indispensable where applying a commercially realistic and less restrictive alternative would lead to a significant loss of efficiencies . 

See Commission Notice No 2004/C 101/08, OJ C 101 of 27 April 2004, Guidelines on the application of Article 81(3) of the EC Treaty [now Article 101(3)] pt 73.

Commission Decision No 2004/208 of 16 October 2003, ARA - ARGEV, ARO, LawLex200500004535JBJ, an exclusivity clause inserted into a waste-disposal agreement is regarded as indispensable for the guaranteeing of the security of the organization and its investments.

Its scope and duration must be limited to what is strictly necessary to achieve the stated objective: Commission Decisions No 85/559 of 27 November 1985, Ivoclar, LawLex200400002433JBJ, for an exclusive distribution network which reserves parallel imports and supplies of one distribution point to another for authorized members of the network only, justified in the absence of absolute territorial protection or a restriction in terms of price policy; No 87/14 of 17 December 1986, Yves Rocher, LawLex200500004449JBJ, for territorial exclusivity granted to franchisees which is justified when passive sales and cross supplies within the network are possible, and when the contract does not include resale price maintenance.

Guidelines on Vertical restraints of 2022, at pt 295.

Necessity of the restriction

45. Necessity of the restriction