Evaluations of a company`s distribution agreements, whether or not they are a large company, can save time and money in the long run. The facts of this decision are set in the classic context of a breach of a selective distribution contract by a headmaster with a notice of unquestionable suitability. In this case, a manager of a motor vehicle distribution network (…) It is clear that the latter of these restrictions is of particular importance for selective distribution. According to VABER, it is possible to prohibit authorized distributors from reselling competing brands, but any obligation to boycott products from a particular supplier will not benefit from the exemption. This provision is intended to prevent a number of suppliers using the same selective distributors from being able to prevent certain competitors from using these distributors, which may remove the market from those suppliers. Selective distribution is therefore not suitable for all companies. If the product characteristics do not require selective distribution or if certain minimum criteria are not required, such a system would not be effective. Here too, EU competition law comes into play. If a selective distribution agreement is found to prevent, limit or distort competition in the internal market, the companies concerned can pay high fines.
Those affected may even face de-qualification or criminal penalties for the most serious offences. Exclusive distribution shipping is the case where the supplier designates a distributor as its only (or “unique” distributor in a given territory, but unlike the “exclusive distribution model,” the supplier is still able to market the products in question to end consumers as it sees fit. distribution system by which a supplier enters into (vertical) agreements with a limited number of selected distributors in the same geographic area. Selective distribution agreements limit the number of licensed distributors. On the other hand, they prohibit the sale to unauthorized distributors, so that distributors can only be considered potential buyers by other designated distributors and end customers. Selective distribution is almost always used to market end-of-brand products. Potential competitive risks include reducing intra-brand competition, facilitating supplier/buyer agreements, and locking in certain types of distribution, particularly in the event of cumulative effects of parallel selective distribution networks in a market. Selective quality distribution is generally not covered by the prohibition of Article 101, paragraph 1 of the TFUE, provided that three conditions are met: first, the nature of the product in question must require a selective distribution system. Second, resellers must be selected on the basis of objective qualitative criteria. Third, the criteria set must not go beyond what is necessary. © European Commission We also find that some of our customers inadvertently circumvent their agreements between distributors, which means that two different distributors in the same region are exclusive, which can lead a supplier to immediately violate both agreements.
THE VABER itself does not specifically refer to online sales; The guidelines, however, seek to clarify the Commission`s approach to online sales, with particular attention to selective distribution systems.