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Selective Distribution System under Competition Law
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Att. Ecem Susoy Uygun
Selective Distribution System
Selective distribution system is defined as a “distribution system
whereby the provider undertakes to sell, directly or indirectly, the
goods or services that are the subject of the agreement, only to distrib-
utors selected by it, based on designated criteria, and whereby such
distributors undertake not to sell the goods or services in question to
unauthorized distributors,” under Art. 3 of the Block Exemption
Communiqué on Vertical Agreement No. 2002/2 (“Communiqué No.
2002/2”).
Qualification of the goods or services plays a significant role in
formation of the selective distribution system. Suppliers who do not
prefer to sell products, such as jewelry and perfumeries, with a certain
brand image to be sold by personnel with insufficient knowledge and
qualifications, at unsuitable places, generally choose the selective dis-
tribution system. In order to ensure to supply such products to the end
users in the most efficient way, a requirement may be introduced to
ensure that the products are exclusively sold by members of the selec-
tive distribution system, and to prevent the product from being dis-
played at sales points that may harm its brand image. As stated in the
Guideline on Vertical Agreements (“Guideline”), the selective distrib-
utor agreements, as exclusive distributor agreements, limit the number
of authorized distributors and resale opportunities, as well.
When restrictions are imposed by the selective distribution system
members for the purpose of protecting the quality of the product, these
restrictions are not deemed as a restriction of competition. The criteria
to be met in the selective distributor agreements has been examined in
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NEWSLETTER 2015
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Article of December 2015