Competition rules and commercial agreements
Seemingly straightforward commercial transactions such as distribution and supply agreements frequently provide a repository for the core value of a business. It is vital, therefore, that they are capable of being enforced and are not likely to be overturned on the grounds that they are anti-competitive.
With notification for clearance and/or exemption being phased out, the onus is on businesses and their advisers to form their own views of the risks and to come up with compliant solutions that do not lose sight of the commercial objective.
We take a resolutely commercial and innovative approach to the question of whether amendment of an agreement is necessary to achieve these ends. In many cases, especially where knowledge-rich businesses are concerned, apparently straightforward commercial arrangements raise complex competition issues requiring an analysis from first principles. Our competition team has the experience to apply these principles in a practical and commercial manner and to know when competition issues do not arise.
Pricing is a key factor in the analysis of the distribution systems of many multinational suppliers. Contrary to what is often assumed, there is no obligation on non-dominant businesses to supply their goods and services at the same price in every EU Member State. However, any attempt to ring-fence high-price countries against parallel imports is likely to attract swift intervention by the European Commission.
Dominant businesses face additional constraints on pricing: they are prohibited from excessive pricing, predatory pricing (pricing below cost) and discriminatory pricing. At Taylor Wessing, we have considerable experience in advising on the practicalities of Europe-wide and national pricing schemes, particularly for suppliers in a dominant position or with a degree of market power.
Some examples of recent experience include:
- advising numerous software developers on exclusive linking arrangements with ISPs and portals
- advising several software manufacturers on channel control and pricing issues in the context of exclusive and selective distribution and licensing arrangements
- advising on the implications of the new motor vehicle block exemption for a major car supplier and revising all relevant documentation
- advising a leading UK manufacturer of vacuum cleaners on the establishment of a selective distribution system
- advising a number of interested parties on the central marketing of sports broadcasting rights in the context of proceedings before the European Commission
- advising a leading electronics company in the establishment of a new distribution and pricing system.