SELECTIVE DISTRIBUTION Sample Clauses
SELECTIVE DISTRIBUTION. In its 2016 activity report, the Commission included an explanation of certain aspects to be considered when assessing selective distribution systems for Serbia: ▪ With respect to the question whether a selective distribution agreement, concluded for an indefinite period of time and which initially benefits from the block exemption, remains safe harbored even if the market share of one or both parties change over time to exceed the (25%) threshold required for the local vertical BER to apply, the Commission emphasized that the parties are responsible for making sure that their agreement continues to meet the criteria necessary for the BER to apply (including the market share requirements). If at any time during the term of the agreement this is no longer the case a request for an individual exemption must be submitted. ▪ A clarification was sought from the Commission regarding the possibility to agree on a restriction to sell competing brands (non-compete obligation) of up to 5 years in a selective distribution system. Currently, the local vertical BER, on the one hand, generally allows non-compete obligations of up to 5 years, but, on the other hand, states that any (direct or indirect) obligation on the members of a selective distribution system not to sell competing goods (or services) shall not be block exempted. The Commission upheld the EU approach; the local vertical BER shall be interpreted as excluding from its coverage any obligation on the members of a selective distribution system not to sell the brands of particular, identified competing suppliers, whereas it implied that the combination of selective distribution with a non-compete obligation of up to 5 years may still be block exempted as long as such obligation referred to competing brands in general. ▪ Further, where an individual exemption is required for a selective distribution system consisting of several distribution agreements of a supplier with a number of distributors, each agreement must be assessed individually, rather than the system as a whole. This is because each agreement may concern different relevant markets with varying market shares and the effects that the agreement produces. The Commission explained that it intends to instigate separate individual exemption proceedings for each (selective) distribution agreement.
SELECTIVE DISTRIBUTION. As per the definition of “selective distribution system” within the scope of Turkish competition law, a supplier that establishes such distribution system undertakes to sell the contract products or services, either directly or indirectly, only to resellers selected on the basis of specified criteria. On the other hand, authorised resellers within such selective distribution system undertake not to sell contracted products or services to unauthorised resellers.621 Selective distribution agreements, like exclusive distribution agreements, restrict the num- ber of authorised resellers as well as the possibilities of resale. The difference between selective and exclusive distribution is that the restriction of the number of resellers within the selective distribution system does not depend on the number of territories but on the selection criteria based on the nature of the product. Also, another difference is that the restriction on resale is not a restriction on active selling to a territory but a restriction on any sales to unauthorised resellers, leaving only the appointed resellers and end-users as potential buyers. As the selective distribution systems limit the number of authorised resellers and certain resale practices, such distribution systems may restrict competition due to their nature. To be more specific, selective distribution systems may result in competitive restrictions as they could (i) reduce the intra-brand competition; (ii) lead to foreclosure of certain types of resellers; and (iii) facilitate collusion between suppliers or resellers.622 That being said, selective distribution systems may be significant especially in certain sectors where the presale services could play an important role for branded products such as jewellery and fragrance. Moreover, the marketing of such branded products may require the adoption of specific physical features at sale points and competent sales personnel. Overall, the Guidelines on Vertical Agreements make a distinction between (i) purely qualitative selective distribution systems and (ii) quantitative selective distribution systems. Within the purely qualitative selective distribution systems, the supplier authorises the resellers only on the basis of objective criteria required by the nature of the product, such as training of sales personnel, the service provided at the point of sale, a certain range of products being sold. In this respect, if the following three conditions are met, it is assumed that...