What Is a Selective Distribution Agreement

Our distribution network experts describe the most important points to consider in a selective distribution agreement. However, the CJEU also confirmed17 that a clause prohibiting authorised distributors in a selective distribution system from using third-party platforms “in a recognisable manner” for the online sale of the products in question may be compatible with the VABER, provided that certain criteria are met, in particular that the clause: Not met, Action Sport appealed to the Amsterdam Court of Appeal, who unexpectedly delved into the issue. Indeed, in last summer`s judgment, the Court of Appeal not only upheld the lower court`s decision, finding that Nike`s selective distribution agreement was indeed in line with EU competition law, but also held that this mandate did not apply exclusively to luxury goods suppliers. Interestingly, the European Commission has concluded that restricting restrictions on online advertising cannot benefit from the VBER. Indeed, the restriction prevented authorized distributors from promoting and, ultimately, selling Guess products to customers outside their territory or field of activity. Consequently, the restriction was intended to restrict active or passive sales to final consumers by members of a selective distribution system operating at retail level, which constitutes a hardcore restriction. A provision of an agreement which infringes Article 101(1) and which cannot be automatically exempted under the Block Exemption Regulation or individually under Article 101(3) is void and inapplicable. The entire agreement fails if the infringing provision in question cannot be separated. The European Commission may impose fines for infringements of Article 101(1) and third parties may sue national courts for civil damages for losses resulting from the infringing provision/agreement.

Third parties may also use violations as a “sword” or “shield” to circumvent obligations under a distribution agreement or to defend a claim for breach of contract. On the 12th. In April 2021, the German Competition Authority (“FCO”) closed its investigation against Liebherr, a manufacturer of household appliances, without a fine after Liebherr agreed to abandon or modify certain clauses of its new distribution model which, in the opinion of the FCO (…) Components of development through selective distribution: a supplier may not, after termination of the contract, directly or indirectly prevent the distributor from producing, buying or selling competing goods or services, unless the obligation is limited to a maximum period of one year, is necessary for the protection of know-how and the obligation is limited to the same point of sale; from which the concessionaire was active during the agreement. At the heart of the case was the selective distribution system that Guess maintains throughout Europe through agreements with wholesalers; stationary single-brand retailers (franchisees); and multi-brand dealers (i.e., “authorized distributors”). European competition law prohibits agreements and concerted practices between undertakings which (i) are likely to affect trade between Member States and (ii) have as their object or effect the prevention, restriction or distortion of competition in the internal market, unless they fulfil the conditions for exemption. A distribution system in which a supplier enters into (vertical) agreements with a limited number of selected distributors in the same geographical area. On the one hand, selective distribution agreements limit the number of authorised resellers. On the other hand, they prohibit sales to unauthorised distributors, leaving authorised dealers only to other authorised dealers and end customers as potential buyers. Selective distribution is almost always used to distribute branded finished products.

Possible competitive risks are the reduction of intra-brand competition, the facilitation of agreements between suppliers or buyers and the exclusion of certain types of distributors, in particular in the case of the cumulative effects of parallel selective distribution networks on a market. Purely qualitative selective distribution is generally not covered by the prohibition laid down in Article 101(1) TFEU, provided that three conditions are met: first, the nature of the product concerned must require a selective distribution system. Secondly, resellers must be selected on the basis of objective qualitative criteria. Thirdly, the criteria set must not go beyond what is necessary. © European Commission Selective distribution can also benefit traders. While it`s not exclusive, you`re probably offering a product for sale that isn`t easily found elsewhere. This can attract consumers who would otherwise have gone to a competitor. Product exclusivity can also help you in your own marketing strategy, for example, if there is an intention to build a luxury or high-end brand. The investigating and prosecuting authority of the Belgian competition authority submitted a reasoned proposal for a decision in a case involving Caudalie imposing a maximum discount on its network of selective distributors* On 20 October 20.

November 2020, the investigation and (…) In addition, the agreement is exempted from the block exemption by limiting the right of authorised services to sell spare parts to independent undertakings[3] or by preventing access to technical information, diagnostic and other equipment, necessary software or training necessary for the maintenance and repair of motor vehicles. In accordance with the Guidelines for the Application of Articles 4 and 5 of Law No 4054 on the Protection of Competition to Technology Transfer Agreements, in particular where the licensee is required to set up a certain type of distribution system, such as exclusive distribution or selective distribution in accordance with the licence agreement, distribution agreements concluded for the purpose of fulfilling these obligations in order to be covered by a block exemption: Communiqué No 2002/2. VABER automatically exempts vertical agreements from the general prohibition laid down in Article 101: where restrictions are imposed by the members of the selective distribution system to protect the quality of the product, such restrictions shall not be considered as a restriction of competition. The criteria to be met in selective distribution agreements were examined by the Court of Justice of the European Communities (CJEU) in the metro case[1]. According to this dispute, SABA sells products such as televisions, radios and cassettes through a distribution network composed of experienced sellers who meet certain criteria. .

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