Selective Distributorship Agreement

December 16th, 2020| Posted by admin
Categories: Uncategorized | Tags:

This decision follows the request of the Court of Cassation in its important decision of 27 March 2019 on the selection of resellers in a selective distribution system (com, 27 March 2019, no 17-22083: published in the Bulletin; Letter distr. April 2019, p. 1, no (…) Evaluations of a company`s distribution agreements, whether or not they are a large company, can save time and money in the long run. The short answer is – these companies have distribution agreements with Apple. But what is a distribution agreement and why would a simple written or oral agreement not suffice? However, the Court also confirmed17 that a clause prohibiting licensed distributors in a selective distribution system from using “recognizable” third-party platforms for the online sale of the products in question may be compatible with THE VABER if certain criteria are met and, in particular, that this principle must be adhered to with caution. In 2018, the Competition Tribunal upheld the Competition Authority`s (CMA) decision against Ping Europe Limited. The CMA found that Ping, a golf club producer, had breached competition law by entering into agreements with two British retailers with clauses prohibiting them from selling golf clubs online. The CMA found that Ping`s commercial objective of promoting custom accommodation in the store could have been achieved in less restrictive ways. This pioneering case sends an important signal that manufacturers` attempts to impose absolute bans on the online sale of their products are not permitted by law. A “distribution agreement” can be defined as a contractual agreement (usually in writing) between two independent parties at different levels of negotiation, in which one party (the “supplier” and, in general, the manufacturer) enters into contracts to sell goods (or services) to another party (the “distributor” and, in general, a non-manufacturer) for resale by the distributor. A distribution agreement is an example of a “vertical” agreement that is an agreement between parties operating at different levels of the supply chain. A provision of an agreement that is contrary to Article 101, paragraph 1, and which cannot be automatically released under the category exemption (VABER) or individually under Article 101, paragraph 3, is non-applicable and is unenforceable.

The whole agreement will fail if the particular counterfeiting provision cannot be cut. The Commission can impose fines for breaches of Article 101, paragraph 1, and third parties can take civil action in national courts for losses incurred under the provision/agreement. Third parties may also use offences such as “sword” or “shield” to circumvent obligations under a distribution agreement or to defend a violation of contractual rights. Some selective distribution agreements may also benefit from the Commission`s 2014 communication on minor agreements. The de minimis communication indicates that the Commission will not generally initiate any proceedings against agreements between small and medium-sized enterprises. The opinion also states that large firms should not be investigated if their market share in the markets in question does not exceed 15% for non-competitor agreements and 10% for agreements between competitors. If competition is limited by the cumulative effect of the agreements, this threshold is reduced to 5%.

Comments are closed.