The following Competition practice note Produced in partnership with Bryan Cave Leighton Paisner LLP provides comprehensive and up to date legal information covering:
Aftermarkets are particularly important to manufacturers of complex technical equipment and other companies that adopt a 'razors and razor blades' type of business model. Competition issues in aftermarkets are not confined to any particular industry sector. Although many of the cases involve the technology sector, aftermarket competition issues have also arisen in a wide range of other areas. Aftermarket cases typically involve:
a primary product (eg equipment, hardware, or software), and
an aftermarket good or service (eg parts, repair services, or software support).
The key battleground in such cases is the downstream aftermarket, which often generates highly profitable recurring revenue coveted by proprietary equipment manufacturers as a means to recoup their substantial investments in research and development. Independent service organisations (ISOs) or other third parties that offer competing aftermarket goods or services often come into conflict with manufacturers. Manufacturers may attempt to avoid facilitating aftermarket competition by ISOs, and ISOs that operate only in the aftermarket may regard competition from manufacturers as unfair. For example, manufacturers may seek to avoid supplying ISOs with aftermarket products (eg spare parts and consumables) or tools (eg training diagnostics, engineer control orders, bug fixes, or software updates).
The competition between manufacturers and ISOs has led to a number of important competition rulings on both sides of the Atlantic. In this note, we chart the application and development of EU competition
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