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Distribution Agreement Competition Law

Posted on Dec 7, 2020 in Uncategorized

From 2021, EU authorities will lose the power to conduct on-the-spot investigations in the UK (also known as Dawn Raids). Instead, their investigative powers are limited to written requests for information from UK-based companies. The CMA will replace them as the central competition law enforcement body in the United Kingdom and will consider anti-competitive agreements and any possible abuse of dominance. Online sales have been the subject of much discussion in the context of distribution agreements, as they threaten the notion of exclusive territories and allow the possibility of “freeriding”. In addition, with regard to luxury products among suppliers in particular, there is a concern that the brand`s reputation will be lost if it is not accompanied by personalized customer service and support in an appropriate environment that confers the aura of luxury, prestige and exclusivity. This quick guide provides an overview of the treatment of selective distribution agreements under EU competition law. If a distribution agreement contains a “hardcore” restriction, it will not benefit from the guarantees contained in EU competition rules, including the category exemption for vertical agreements. A selective distribution agreement is generally used by a supplier to maintain greater control over the resale of its products. In such a system, the supplier undertakes to supply only merchants who meet certain minimum criteria. In return, distributors agree to supply only other distributors that are in the selective distribution system or the authorized end user. The selection criteria used generally require that products be sold only through outlets with a particular image or that the distributor assume specific obligations, such as staff training or after-sales service.

With regard to selective distribution agreements, the key is to achieve a single standard and a consistent quality of service in the outlets where the products are sold. Among the most relevant restrictions on a selective distribution agreement are: the health crisis and its consequences have had a direct impact on the trade agreements that have just been signed by 2020 between distributors and the food companies that supply them. This situation has led suppliers to think about the various legal mechanisms that (…) Under EU competition rules, most distribution agreements will benefit from a waiver for vertical agreements. It is called “vertical agreements exemption by category.” Much of Uk competition law comes from EU rules. As a result, Brexit is likely to have an impact on how companies can compete legally, unless a future deal says otherwise. 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 to distribute Stanley products in Spain and Portugal for a period of one year, (…) Most EU competition law is transposed into UK law. In particular, beyond Brexit, the EU category exemption is maintained in UK law, which means that distribution agreements can continue to benefit from the category exemption for vertical agreements. Since 1 May 2004, the parties must draw their own conclusions on the compatibility of their trade agreements with EU competition law. Although many selective distribution agreements are considered to be free of competition, there are strict conditions that must be met and the conditions of these agreements must be reviewed on a case-by-case basis.