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

Parallel imports may be problematic in an exclusive distribution network. The conditions of sale are not necessarily the same in all the twenty-eight markets of the European Union and the members of a national network can face competition from imports from other Member States. The objective of European competition law, however, is not only to ensure the free play of competition, but also to promot …

Prohibition of parallel imports

Parallel imports may be problematic in an exclusive distribution network. The conditions of sale are not necessarily the same in all the twenty-eight markets of the European Union and the members of a national network can face competition from imports from other Member States. The objective of European competition law, however, is not only to ensure the free play of competition, but also to promote the creation of a large European market by facilitating the export of network products and services, as well as their importation at the margins of exclusive distribution networks.

According to the Court of Justice, exclusive distribution agreements are caught by Article 101(1) where they grant an absolute territorial protection to distributors . Under Regulation No 2022/720, prohibiting parallel imports, which institutes an absolute territorial protection, is a hardcore restriction, i.e. a black clause that in principle will not qualify for the benefit of the exemption , unless, since Regulation No 330/2010, efficiency gains can be justified. The Court of Justice has held exclusive agreements to be anticompetitive when they have the effect of partitioning the market, especially when combined with a national legislation which considers a third party engaging in parallel imports to be an act of unfair competition . Similarly, the clause by which the supplier grants its manufacturer's guarantee only for products acquired by customers of its exclusive dealers, thereby excluding products marketed through parallel importers, is restrictive of competition . According to the Guidelines on Vertical Restraints, these clauses include more risks for competition when they are used in conjunction with a monitoring system which verifies the effective destination of the supplied goods by affixing differentiated labels or serial numbers . The supervisory authorities adopt an “end-result” approach, focusing on the effect of the contractual clause rather than on its object , which allows them to address indirect restrictions. Consequently, an exclusive distribution agreement which did not prohibit re-exports was deemed to be an anticompetitive agreement where the contracting parties were engaged in a concerted practice aimed at restricting parallel imports to the benefit of an unauthorized dealer . The same applies for remuneration systems which, indirectly, favor sales made on the exclusive territory . 

Conversely, a clause which does not have the effect of discouraging exports cannot be prohibited. This was the case for a clause by which the exclusive distributor undertook, in the event of a sale outside the allocated territory, to pay to the distributor responsible for that territory a service support fee the amount of which was to be agreed between the two distributors, and in default of agreement the manufacturer was to determine the amount, having regard to objective criteria corresponding to a realistic assessment of the cost of service  or obligations on the reseller relating to the display of the brand name .

Case 56/64 Consten, Grundig-Verkaufs, Judgment of 13 July 1966, LawLex200400002598JBJ.

See recital 15 of Reg No 2022/720 See also Commission decision No 2003/675 of 30 October 2002, PO Video Games - PO Nintendo Distribution and Omega - Nintendo, LawLex200500004659JBJ, restriction of passive sales involving absolute territorial protection Case T-43/92 Dunlop Slazenger v Commission [1994] ECR II-441, LawLex200500004964JBJ, on exports to exclusive territories and cross supplies.

See Case 22/71 Béguelin Import v G.L. Import Export [1971] ECR 949, LawLex200400002766JBJ. See also Guidelines on Vertical Restraints, at pt 50.

See Case 31/85 ETA v DK Investment [1985] ECR 3933, LawLex200500003989JBJ. There is only an infringement insofar as the restriction on competition, which is likely to result therefrom affects trade between Member States. Since all resellers enjoy full cover of the manufacturer's normal guarantee, nothing prevents the latter from granting special benefits to its exclusive distributors, such as a repair service within 24 hours or a two-year guarantee extension: Case 86/82 Hasselblad v Commission [1984] ECR 883, LawLex200500005391JBJ.

Guidelines on Vertical Restraints of 2022, at pt 205.

See, inter alia, Case T-43/92 Dunlop Slazenger v Commission [1994] ECR II-441, LawLex200500004964JBJ, relative to a refusal to supply, buying back of products which had been exported through parallel channels, policy of charging higher prices for exported goods, marking products in order to identify the source of parallel imports, or the discriminatory use of official labels, giving exclusive distributors an absolute territorial protection and allowing them to pursue different pricing policies.

See Case T-49/95 Van Megen Sports Group v Commission [1996] ECR II-1799, LawLex200500005140JBJ; Case T-62/98 Volkswagen v Commission [2000] ECR II-2707, LawLex200400003580JBJ: policy of imposing supply quotas on dealers combined with a bonus system intended to induce them to sell at least 85% of available vehicles within their contract territory.

See Commission Decision No 2006/431 of 5 October 2005, SEP/Peugeot SA, LawLex200700000252JBJ; upheld in by Case T-450/05 Peugeot and Peugeot Nederland v Commission [2009] ECR II-2533, LawLex201000000547JBJ; See, also, Case C-551/03 P General Motors [2006] ECR I-3173, LawLex200600001229JBJ.

See Case T-67/01 JCB Service v Commission [2004] ECR II-49, LawLex200500004797JBJ.

Guidelines on Vertical Restraints, at pt 207.

European Distribution Law

61. Prohibition of parallel imports

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

61. Prohibition of parallel imports

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