Distribution Agreement Between Competitors

Distribution Agreement Between Competitors

Nicolas Feuillatte Champagne and two importing distributors for maintaining exclusive import agreements in the French West Indies – Background According to a report by the French Directorate General for Competition Policy, Consumer Affairs and Fraud Enforcement (DGCCRF), the Authority (…) According to the vertical restriction guidelines, “in an exclusive distribution agreement, the supplier undertakes to sell its products to only one distributor for resale in a specific area.” The vertical restrictions guidelines state that the potential competitive risks associated with exclusive distribution are essentially resulting in reduced intra-brand competition and market silos, which can, among other things, facilitate price discrimination. Exclusive distribution can lead to the closure of other distributors and reduce competition at this level. If most or all suppliers apply exclusive distribution, this can soften competition and facilitate agreements. When vertical agreements are reached between competitors, the key question is whether the agreement is still horizontal. For example, an agreement between two producers of a given product, in which the second producer agrees to market on behalf of the former, is not, strictly speaking, at the same level of the supply chain (i.e. it involves the provision of “vertical” distribution services to a producer). However, given the competitive relationship between the two parties in the upstream production market, it will have to be considered a horizontal regime. Even “vertical” agreements between competitors will therefore, in most cases, be considered horizontal cooperation. The Commission generally refers to these agreements as “marketing agreements”. This applies to the joint sale, where the parties agree on all commercial aspects related to the sale of the product, including the price.

However, it also includes more limited forms of cooperation, such as distribution agreements. B (for example. B, a party appoints its competitor for the distribution of its products in a given territory), after-sales service, advertising or logistics. Companies involved in anti-competitive behaviour may consider their agreements to be unenforceable and may be fined up to 10% of their global turnover for particularly harmful behaviour. They may also be exposed to possible actions for damages by customers. It is always important to take into account, in a decision of 16 March, all other agreements and agreements of a network (particularly when one or more territorial and/or customer restrictions are imposed) in a decision of 16 March. In 2020, the Competition Authority (FCA) fined Apple Group 1.1 billion euros for (i) being hit by a series of vertical restrictions on competition within its distribution network and (ii) the economy (…) The agreement does not contain specified hardcore restrictions.


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