Exclusivity Agreement Territory

kenty9x | December 8, 2020 | 0

It is only when the supplier and/or distributor can demonstrate that territorial protection improves production or distribution or contributes to technological or economic development, that restriction of competition is necessary to achieve improvement, that an appropriate part of the improvement benefits users and that, finally, there is sufficient (residual) competition, territorial protection will be allowed (protection of efficiency). This issue has already been briefly debated with the question “What cooperation agreements are allowed?”. However, the Commission, national competition authorities and the courts often do not accept the defence of effectiveness under “strict restrictions”. All distribution agreements are potentially contrary to EU competition law and UK competition law. Designated distributors should carefully consider the type of agreements they wish to enter into and possibly ensure that they are covered by an appropriate de minimis exemption or other specific exemption. An efficient and/or high-quality distribution system has many advantages. For example, the supplier is assured that its products will be delivered in the manner necessary to end-users. B for example with a high level of service, a short delivery time and/or a low price. A distributor protected to some extent by the supplier is able to invest in its service, which makes its operation more efficient or improves the service to the user (final). Often, it is the (final) user who benefits the most.

This is why many distribution agreements based on EUROPEAN legislation are exempted in advance from the ban on cartels. Nevertheless, there are still a number of competitive risks. That is the case, for example. B, when a supplier assigns exclusively geographic areas or customer blocks to distributors and those distributors are protected from other distributors to an (excessive) extent. This limits competition between distributors and consumer freedom of choice, which will ultimately have more negative than positive effects. The absolute protection of the customer or territory by the supplier is not exempted in advance from the prohibition of agreements and therefore quickly conflicts with it. Finally, active sales can only be limited to the distributor who is a party to the distribution agreement. This means that if the distributor in turn uses resellers or enters into agreements with independent resellers, it cannot require the merchant with whom it has entered into an agreement to also limit the active and passive sale by traders or resellers with respect to a given territory or block of customers.