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

Although now under the remit of the general vertical restraints regulation, motor vehicle distribution law is still influenced by the sector-specific block exemption regulations that were successively adopted to define the conditions of exemption of distribution agreements in this sector. In principle, the sole purpose of the exemption regulations is to lay down the conditions to qualify for a blo …

Specific nature

Although now under the remit of the general vertical restraints regulation, motor vehicle distribution law is still influenced by the sector-specific block exemption regulations that were successively adopted to define the conditions of exemption of distribution agreements in this sector. In principle, the sole purpose of the exemption regulations is to lay down the conditions to qualify for a block exemption  but in practice the adopted regulations laid down the contractual structure of networks in the motor vehicle sector and even the content of contracts. This situation was due both to the desire of economic operators to be able to enjoy the benefit of the legal certainty afforded by the block exemption at all costs, and to the extremely directive nature of the various motor vehicle regulations that have governed the sector to date.

The Commission acknowledged the specificity of the motor vehicle sector by adopting Regulation No 123/85 of 12 December 1984. Ten years later, it revised the system with Regulation No 1475/95 of 28 June 1995. Its attitude vis-à-vis this mode of distribution has remained unchanged since then and it went on to adopt a third sector-specific exemption regulation, No 1400/2002 of 31 July 2002, instead of including motor vehicle distribution within the single block exemption regulation on vertical agreements. This distinguishing of the sector was justified by the specific nature of the product and the services in the industry and the need to guarantee the consumer's safety. Regulation No 1400/2002 was based on the premise that competition could be improved by the strengthening of the autonomy of distributors and by multi-branding. Certain principles were affirmed: no combined exclusive/selective distribution, the establishment of wholly multi-branding sales, the separation of the link between sales and after-sales, the strengthening of the protection of distributors, the possibility of creating spin-off undertakings throughout the internal market, and the imposition of purely qualitative selection for after-sales. The regulation defined a number of prohibited clauses, qualifying them either as hardcore restrictions - black clauses - or red clauses. Motor vehicle distribution was ultimately subject to a much more stringent set of rules than sectors governed by the general regulation on vertical restraints.

That regulation expired on 31 May 2010 and the Commission adopted new Motor Vehicle Regulation No 461/2010 on 27 May 2010, which came into force on 1 June 2010 and will expire on 31 May 2023 . However, the new text provides two different systems for sale and after-sales services. Manufacturers should thus have more freedom in the organization of their network and distribution costs should be lower. Between 1 June 2010 and 31 May 2013, the distribution of new motor vehicles remained subject to Regulation No 1400/2002. Since 1 June 2013, it has been subject to the general regulation on vertical restraints. The specific conditions of Regulation No 1400/2002, such as those relating to the duration of agreements, the duration of the notice period, the duty to state reasons for the termination, the freedom to sell within the network, the right to refer disputes to an independent arbitrator or expert, to which the contract laws of each Member State are more relevant than a block exemption regulation, no longer apply. 

Does this mean that it is now sufficient in matters concerning motor vehicle distribution to look to the general rules on vertical restraints, in particular works and commentaries relative to exclusive or selective distribution to be totally clear about the rules applicable to this type of distribution? Nothing is less certain and the need for a specific analysis of the case law applicable to motor vehicle distribution remains for a number of reasons. 

In practice, the influence of Regulation No 1400/2002 on motor vehicle distribution agreements remains significant. Many agreements concluded under that regulation are still in force. Some manufacturers have preferred not to reorganize their distribution networks and some having terminated old contracts or having offered new contracts by means of amendments, have chosen not to make use of all the possibilities open to them under the Vertical Restraints Regulation. Most automobile suppliers are members of ACEA or JAMA (manufacturers' associations) which have adopted codes of good practice which include, inter alia, keeping the two-year notice period for regular contract terminations.

Since 1 June 2010, agreements providing for repair and maintenance services and distribution of spare parts must, on a cumulative basis, fulfill the requirements for exemption under the general system laid down in Regulation No 330/2010 and the more specific requirements laid down in Regulation No 461/2010. In the Commission's opinion, the aim is to free after-sale services and allow repairers to have access to spare parts bearing other brands while maintaining the possibility for manufacturers to require that repairs be made within their network where they are covered by the guarantee for which manufacturers bear the cost. The new regulation only includes three hardcore restrictions out of the five mentioned in Article 4(2) of Regulation No 1400/2002: i) prohibition on members of a selective distribution system from selling spare parts to independent repairers, ii) prohibition on suppliers of spare parts from selling their products to operators who are not members of the network or to end users, iii) prohibition on suppliers of components from placing their trade mark or logo on components supplied for the initial assembly of a motor vehicle. 

Finally, certain questions of competition law or contract law arise more acutely and frequently in automobile distribution law than in other sectors. In practice, both distributors and suppliers have access to lawyers specializing in automobile distribution law in most European countries, and the subject continues to be the subject of conferences and publications . 

Case 10/86 VAG France v Magne [1986] ECR 4071, LawLex200500004435JBJ.

The text is completed by Guidelines of Court of Cassation Commercial Chamber 2010/C 138/05, published on 28 May 2010.

See for example, WEGNER and OBERHAMMER, The Application of Competition Law to the Automotive Industry, JECLAP, 2015, 669.

European Distribution Law

80. Specific nature

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Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

80. Specific nature

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise