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

Almost all distribution networks are now selective, with selection being based on both qualitative and quantitative criteria. Since 1 June 2013, the combination of exclusive and selective distribution is no longer prohibited.
1) Qualitative selection
According to the vertical restraints guidelines , qualitative selection consists of approving resellers according to criteria that “indirectly limit  …

Qualitative and/or quantitative selection

Almost all distribution networks are now selective, with selection being based on both qualitative and quantitative criteria. Since 1 June 2013, the combination of exclusive and selective distribution is no longer prohibited.

According to the vertical restraints guidelines , qualitative selection consists of approving resellers according to criteria that “indirectly limit the number of distributors, by imposing conditions that cannot be fulfilled by all distributors, for example regarding the range of products to be sold, the training of sales personnel, the service to be provided at the point of sale, or the advertising and presentation of the products". It is only justified if three conditions, referred to as the "Metro criteria” by the 2022 Guidelines on Vertical Restraints, are met  : i) the nature of the product in question must necessitate a selective distribution system, in the sense that such a system must constitute a legitimate requirement, having regard to the nature of the product concerned, to preserve its quality and ensure its proper use; ii) resellers must be chosen on the basis of objective criteria of a qualitative nature which are laid down uniformly for all and are not applied in a discriminatory manner and iii) the criteria laid down must not go beyond what is necessary.

The qualitative criteria may be based, inter alia, on the technical skills of sales personnel, the layout of sales facilities, sales techniques and the type of sales services to be provided by the distributor .

According to the Guidelines on Vertical Restraints , quantitative selection “directly limits the number of distributors, for example by imposing a fixed number of distributors”. 

Some national courts had caused confusion by requiring in decisions rendered in application of Regulation No 1400/2002 that quantitative selection criteria be both precise and objective . The Commission acting as amicus curiae to clarify the proper interpretation to be given to Article 1(1)(g) of Regulation No 1400/2002 stated that the regulation defined selective distribution on the basis of one added condition, that being the determining of criteria which directly limit the number of distributors, and did not mention anywhere that the supplier must give criteria that are objective in nature, i.e. within the very precise meaning of the term “objective”, as used in EU law, required by the nature of the contract goods and services. Quantitative criteria implemented by the supplier therefore need only to be defined, i.e. precise. Given the divergent interpretations of the concept of quantitative criteria, the French Court of Cassation, by a decision of 29 March 2011 , referred for preliminary ruling a matter specifically relating to their definition in respect of Article 1(1)(f) of Regulation No 1400/2002 asking the Court of Justice to rule on the issue whether the supplier just has to choose determined criteria that directly limit the number of distributors or whether it must justify the reasons for its choice. Drawing the consequences of the decision, the Court of Cassation applied the solution of the Court of Justice in its judgment of 15 January 2013  and the guidelines of 2022 no longer require the supplier to publish its selection criteria .

Guidelines on Vertical restraints 2022/C 248/01 of 28 June 2022, pt 144.

Guidelines on Vertical restraints 2022/C 248/01 of 28 June 2022, pt 149.

Guidelines on Vertical Restraints, pt 144.

Case C-158-11 Auto 24 SARL, Judgment of 14 June 2012, LawLex201200000871JBJ.

Cass. com., 29 March 2011, LawLex201100000709JBJ.

Cass. com., 15 January 2013, LawLex201300000035JBJ.

European Distribution Law

89. Qualitative and/or quantitative selection

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

89. Qualitative and/or quantitative selection

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