Exclusive Distribution Agreement Between Competitors

This means that a company is able to behave independently of competitive pressure, for example. B other competitors in this market. The first step is to examine whether the agreement of agreements of minor importance could benefit from the exemption provided for in the Commission Communication. This de minimis Notice applies to agreements which do not contain essential restrictions and which are concluded between SMEs or which concern larger undertakings for which the common market shares of the Parties do not exceed certain thresholds. If the de minimis communication is not applicable, the next step is to determine the market shares of the supplier and the buyer in the market for that product. If the market shares of the supplier and the buyer for the products covered by the agreement do not exceed 30%, the agreement could, under certain conditions, be automatically exempted under the Sectoral Block Exemption Regulation. If one of the parties` share exceeds 30%, the agreement should be assessed individually to determine whether it is eligible for an exemption. An agreement shall be exempted if it contributes to the improvement of production or distribution, promotes technical or economic progress, enables consumers to participate adequately in the resulting benefit, does not impose restrictions which are not indispensable for the attainment of those objectives and does not direct competition. Competition law recognises that cooperation between competitors with a view to the joint implementation and subsequent use of R &D can promote technical and economic progress, in particular where companies bring complementary skills. Facts and procedures. In April 2007, the American company Stanley Assembly Technologies (SAT), a company of the Stanley Black and Decker group, and the Spanish company Euro Herramientas (EH) signed a contract for the distribution of Stanley products in Spain and Portugal for a period of one year, (…) Although distribution agreements are generally vertical (i.e. between companies at different levels of the supply chain), they can affect competition between brands and between suppliers. Sometimes a distributor can make considerable investments in building and developing a market for a given product.

To justify this investment, the distributor may seek protection against competition from other distributors, or even the supplier himself. These exclusive distribution agreements can benefit from EU and UK competition rules and are likely prohibited if they provide absolute protection within a territory (e.g. B part of the United Kingdom or a given country). Another consideration in the EU context is that agreements that isolate national markets and try to maintain different prices in different Member States may also take into account EU competition rules. . . .

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