Competition Enforcement in the Recently Acceded Member States

Vertical Agreements

Michal PetrOffice for the Protection of Competition, Czech Republic

Overview

• New Vertical Restraints BER• Czech experience with RPM• What about the on-line sales?

I. New Vertical Restraints BER

• Commission Regulation 2790/1999 in force till 31 May 2010

• Draft „new“ Regulation and Guidelines, public consultation from 27 July 2009

• Finally adopted on Tuesday• In force from 1 June 2010• 1 year transitional period• „even more“ effects-based

ad New BER• same scope

• non-reciprocal vertical agreements of competitors – dual distribution (not buyer's turnover)

• presumption of positive effects based on market share• 30 % by each of the undertakings on all relevant markets

• same as e.g. de minimis

• presumption of negative effects of „hardcore restrictions“ (101/1 TFEU)

• possibility to claim efficiencies (101/3 TFEU)

• identical extent of „hardcore“

2. The (in)famous RPM

• still hardcore under the new BER• possible efficiencies (especially if supplier driven)• „campaign“ of the Office since 2007

• widely endorsed by distributors • no efficiency claims (at all)• the Tupperware judgement: „quasi per se“ approach

of the court (RPM not necessary for any efficiencies; cannot bring benefits to consumers)

3. Internet

• active and passive sales• distributors free to sell on-line• suppliers may require on distributors

• quality standards

• to have a brick and mortar shop

ad Internet

Hardcore restrictions of passive sales e.g.• Prevent customers from other territories to access

websites; rerouting• Limit the proportion of on line sales (but absolute

amount of off-line sales possible)• Higher prices paid by the distributor for products

intended to be sold on-line

ad Internet

Active sales e.g.• Territory based banners• Paying a search engine or online advertisment provider

to have advertisement specifically displayed

„The rules adopted today will ensure that consumers can buy goods and services at the best available prices wherever they are located in the EU while leaving companies without market power essentially free to organise their sales network as they see best.“

(Joacquin Almunia, 20 April 2010)

Thank you

michal.petr@compet.cz www.compet.cz