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

Distribution law distinguishes between two types of sales, passive and active. The definitions of these have been clarified and incorporated into Vertical Restraints Regulation No 2022/720. 
Active sales covers “actively targeting of customers by visits, letters, emails, calls or other means of direct communication or through targeted advertising and promotion, offline or online, for instance by m …

Prohibition of passive sales

Distribution law distinguishes between two types of sales, passive and active. The definitions of these have been clarified and incorporated into Vertical Restraints Regulation No 2022/720. 

Active sales covers “actively targeting of customers by visits, letters, emails, calls or other means of direct communication or through targeted advertising and promotion, offline or online, for instance by means of print or digital media, including online media, price comparison services or advertising on search engines targeting customers in particular territories or customer groups, operating a website with a top-level domain corresponding to particular territories, or offering on a website languages that are commonly used in particular territories, where such languages are different from the ones commonly used in the territory in which the buyer is established ”. The exclusive distribution agreement protects the distributor(s) of an area from such sales by other members of the network, which may therefore be prohibited. The new regulation now allows the supplier to require the distributor to pass on this prohibition to its direct customers .

Passive sales are “sales made in response to unsolicited requests from individual customers, including delivery of goods or services to the customer, without the sale having been initiated by actively targeting the particular customer, customer group or territory, and including sales resulting from participating in public procurement or responding to private invitations to tender.” . Unlike active sales, passive sales have traditionally been accepted within an exclusive distribution network and to prohibit them is deemed to be anticompetitive by the competition authorities . Thus, the ban on exports to other Member States which covered both non-authorized distributors and final consumers and has as its object both passive and active sales, was caught by Article 101(1) TFEU . Likewise, a provision that required the exclusive distributor to pass on the requests of clients from outside the contract territory was deemed to contain a disguised prohibition of passive export sales without prior authorization . An illegal ban on passive sales could be inferred from the behavior of distributors who acted as if they were subject to a general ban on selling outside their territory . This was the case where the distributor only sells outside its territory as a means of commercial reprisal against another distributor infringing his exclusivity obligation . By contrast, an arrangement for trading support to members of a distribution network which make multiple sales to the same end user does not have an anti-competitive effect per se when the granting of reductions is not linked to the geographic destination of the sales. Under the system set up by the new vertical restraints regulation, the supplier may now also prohibit passive sales by its exclusive distributors and their direct customers to unauthorized distributors located in a territory where the supplier operates a selective distribution system for the contract goods or services . The old case law solutions remain relevant in the case of sales to buyers other than unauthorized resellers, such as final consumers. The old case law solutions remain relevant only in the case of sales to buyers other than unauthorized resellers, such as final consumers. 

Commission decision No 88/86 of 18 December 1987, Fisher-Price/Quaker Oats Ltd - Toyco, LawLex200400002447JBJ: the export ban imposed by a supplier on a wholesaler, in order to protect the exclusive distributor established in the country from which the orders originate, constitutes a restriction of competition that cannot benefit from an individual exemption, confirmed by : Case T-175-95  BASF Coatings (AG), Judgment of 19 May 1999,  LawLex200400003599JBJ, declaring unlawful the prohibition of passive sales; Case T-176/95 Accinauto (SA), Judgment of 19 May 1999, LawLex200400003599JBJ: the block exemption applicable to exclusive distribution agreements cannot be granted in case of a prohibition of passive sales; Commission Decision No 2001-146 of 20 September 2000, Opel, LawLex200500004721JBJ: the refusal of a supplier to pay bonuses in case of export sales to final consumers or to dealers located abroad, as well as the pressure exerted on dealers to cease exports constitute market partitioning practices; Case C-167/04 P JCB Service, Judgment of 21 September 2006, , LawLex200700000303JBJ: a clause understood by exclusive distributors as prohibiting them from making passive out-of-area sales, and applied as such, partitions the markets and is contrary to article 101 TFEU.

Commission decision No 2002/190 of 21 December 2000 LawLex200500004731JBJ.

Case T-176/95 Accinauto v Commission [1999] ECR II-1635, LawLex200400003598JBJ.

Case T-67-01 JCB Service 13 January 2004, LawLex200500004797JBJ.

Commission Decision No 2001/135 of 5 July 2000, Nathan-Bricolux, LawLex200400003581JBJ.

European Distribution Law

62. Prohibition of passive sales

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

62. Prohibition of passive sales

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