Under Article 101, paragraph 3, of the TFUE, a selective distribution agreement under Article 101, paragraph 1, may continue to be valid and legally applicable if it meets the individual exemption criteria. The criteria are as follows: – the agreement improves the production or distribution of goods or services or promotes technical or economic progress; The agreement allows consumers to enjoy a fair share of the benefits that flow from it; The agreement does not contain competition restrictions other than those strictly necessary to achieve the above objectives; The agreement does not substantially eliminate competition.  Regulation (EC) No. 2790/1999 of the Commission of 22 December 1999 concerning the application of Article 81, paragraph 3, of the EC Treaty to the categories of vertical agreements and concerted practices (OJ L 347 of 11.12.1999, p. 1). JO L 336, December 29, 1999, 21-25). Under an exclusive distribution agreement, the distributor benefits from an exclusive distribution area in which it is protected from competing sales by the supplier and/or designated distributors in other jurisdictions. A little less often and either alone or in combination with an exclusive distribution territory, the distributor can benefit from the allocation of an exclusive category of customers, again with protection against competing sales from the supplier/other distributors. “contributes to improving the production or distribution of goods or promoting technical or economic progress, while consumers enjoy a fair share of the benefits that result from them, which is not the case: if you are able to meet the four criteria, your agreement may benefit from an individual exemption and does not constitute a violation of EU competition law. If your agreement does not meet all four criteria, all will not be lost. Your agreement can still be made by so-called “vertical category exemption agreements.” For the purposes of EU competition law, a selective distribution agreement is a `vertical agreement`. A “vertical agreement” is an agreement between two or more parties operating at different levels of the production or distribution chain regarding the conditions under which parties can buy, sell or resell certain goods or services. The “vertical agreements” (VABE) category exemption creates a general presumption of the legality of “vertical agreements” provided that the supplier`s market share is less than 30% and the agreements do not contain specific specific restrictions.
Among the restrictions: the decision of the Paris Court of Appeal of 27 November 2019 is sure to interest professionals in the law of distribution, because it amounts to the much-discussed characterization of the refusal of accreditation and leads to a surprise dissolution of the jurisprudence. Let`s go back a few years (…) “the limitation of active or passive sales to end-users by members of a selective distribution system operating at the retail level, without prejudice to the possibility of prohibiting a member of the system from operating from an unauthorized establishment.” Since 1 May 2004, the parties must draw their own conclusions on the compatibility of their trade agreements with EU competition law. Although many selective distribution agreements are considered to be free of competition, there are strict conditions that must be met and the conditions of these agreements must be reviewed on a case-by-case basis.