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Selective Distribution Systems
5
Selective distribution agreements are generally executed where a
supplier wishes to have strong control over its product. Products such
as luxury goods and complex or technical products are generally sub-
ject to selective distribution agreements. There are also motivational
reasons behind executing selective distribution agreements. These rea-
sons can be categorized under three divisions; prevention of free-rid-
ing, brand image, creation of incentives.
Suppliers can provide certain conditions and minimum criteria for
their distributors in order to preserve their brand image and benefit the
expertise of qualified distributors. In cases where the conditions set
forth aims to preserve such brand image these conditions will not be
regarded as anti- competitive restrictions and will not constitute com-
petition violations. These agreements are covered under VBER and the
Guidelines.
Prohibition of online sales is regarded as a hardcore restriction
under the Guidelines with only two exceptions. The Commission is in
the view that safety and health reasons can be the exceptions where
hardcore restrictions can be necessary.
Pursuant to paragraph 56 of the Guidelines, “restriction of active
or passive sales to end users, whether professional end users or final
consumers, by members of a selective distribution network, without
prejudice to the possibility of prohibiting a member of the network
from operating out of an unauthorized place of establishment” is not
regarded as a hardcore restriction
6
. In other words, in a selective dis-
tribution system with the exception to protect an exclusive distribution
system
7
operated elsewhere users or purchasing agents acting on
behalf of these users to whom they may sell cannot be restricted.
It should be noted that active and passive sales through internet
should be allowed in such selective distribution systems.
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NEWSLETTER 2015
5
Case Law: Pierre Fabre Dermo-Cosmétique SAS v Président de l’Autorité de la concurrence
and Ministre de l’Économie, de l’Industrie et de l’Emploi (Case C-439/09) [2011] O.J. C
355/04.
6
See: Article 4(c) of the Block Exemption Regulation.
7
See: Guidelines, para. 51, 56.