Competition law and exclusive distribution agreements
Produced in partnership with Suzanne Rab of Serle Court
Competition law and exclusive distribution agreements

The following Competition practice note Produced in partnership with Suzanne Rab of Serle Court provides comprehensive and up to date legal information covering:

  • Competition law and exclusive distribution agreements
  • Exclusive distribution overview
  • Relationship with other forms of exclusive dealing
  • Application of the Vertical Restraints Block Exemption to exclusive distribution
  • Territorial restrictions
  • Customer restrictions
  • Position if the Vertical Restraints Block Exemption does not apply
  • Worked examples
  • Exclusive distribution and restrictions on passive sales
  • Self-assessment of exclusive distribution under Article 101(3) TFEU
  • More...

This Practice Note makes frequent references to two legal instruments issued by the European Commission that are designed to assist parties and their advisors in determining the compatibility of their arrangements with Article 101 TFEU, namely the Vertical Restraints Block Exemption (VRBE) and the Guidelines on Vertical Restraints. These instruments also inform the approach of the UK competition authorities when applying UK competition law to an agreement that may affect trade between Member States.

See further, Analysing vertical agreements under competition law, The Vertical Restraints Block Exemption. For a checklist setting out the key steps in assessing vertical agreements, see Vertical agreements—checklist.

Exclusive distribution overview

The Guidelines on Vertical Restraints explain that '[i]n an exclusive distribution agreement, the supplier agrees to sell its products to only one distributor for resale in a particular territory.' The Guidelines on Vertical Restraints explain that the possible competition risks with exclusive distribution are mainly reduced intra-brand competition and market partitioning, which may facilitate price discrimination in particular. Exclusive distribution may lead to foreclosure of other distributors and reduce competition at that level. When most or all of the suppliers apply exclusive distribution, this may soften competition and facilitate collusion.

It is always important to consider all other agreements and arrangements in a network (in particular if one or more impose territorial and/or customer restrictions) when assessing the application of the VRBE to

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