New competition rules for manufacturers and distributors governing the sale of products and services
The Commission on 21 April 2010 adopted a new Regulation that 'block exempts' distribution and supply agreements at different levels of the production and distribution chain.
Manufacturers remain free to decide how to distribute their products. But in order to benefit from the block exemption, they cannot have a market share in excess of 30% and their distribution or supply agreements must not contain any hardcore restrictions of competition, such as fixing the resale price or re-creating barriers to the single market in the EEA.
The new rules introduce the same 30% market share threshold for distributors and retailers to take into account the fact that some buyers may also have market power with potentially negative effects on competition. (This change is beneficial for small and medium-sized enterprises (SME's), whether manufacturers or retailers, which could otherwise be excluded from the distribution market.)
This does not mean agreements between companies with higher market shares are illegal. Only that they must assess whether their agreements contain restrictive clauses and, whether they would be justified.
The new rules will come into force in June 2010 and will be valid until 2022, with a one-year transitional phase.
Schjødt may provide you with further information on the details of the regulation and its impact on current agreements and business practices. All agreements must be aligned with the new rules by the end of the one year transitional period (by 21 April 2011) in order to benefit from the block exemption.
Main contacts:
Jan Magne Juuhl-Langseth http://www.schjodt.no/jan-magne-juuhl-langseth
Christian Bendiksen http://www.schjodt.no/christian-bendiksen