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GLOSSARY

Selective Distribution System definition

/sɪˈlɛktɪv/ /dɪstrɪˈbjuːʃ(ə)n/ /ˈsɪstəm/

Published by a LexisNexis Competition expert

What does Selective Distribution System mean?

A closed network designed to protect brands where products can only be sold by the manufacturer itself and by its appointed distributors and the manufacturer will usually impose on its appointed distributors the obligation not to sell those products to non-approved distributors.

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Block exemptions: an overview—checklist

Block exemptions: an overview—checklist Horizontal and vertical agreements that contain provisions that would otherwise not be compatible with Article 101(1) TFEU may be exempted from the prohibition on anti-competitive agreements through one (or more) of the block exemption regulations issued by the Commission under Article 101(3) TFEU to exempt ‘categories of agreements’ from the application of Article 101(1) TFEU. This Checklist provides an overview of the EU block exemption regulations that are currently in force and describes the main conditions for each block exemption regulation to apply. Block exemptions applying to horizontal agreements The following block exemption regulations apply to horizontal agreements, ie agreements between undertakings operating at the same level of the supply chain (ie mainly agreements between competitors). For block exemptions applying to vertical agreements, please see Block exemptions applying to vertical agreements below. The research and development (R&D) block exemption regulation If the following main conditions are met, agreements relating to R&D efforts can benefit from the R&D block exemption regulation: • there is an agreement between...

Key IP considerations in vertical agreements—checklist

Key IP considerations in vertical agreements—checklist This Checklist focuses on the IP aspects of vertical agreements. It covers the key competition law considerations and considers the following issues: the parties to and structure of vertical agreements, identifying the IP, the scope of the licence, restricting the use of the IP, IP ownership, third-party IP, protection of licensor’s IP and warranties and indemnities. On 10 May 2022, the European Commission adopted the EU Vertical Restraints Block Exemption, Regulation (EU) 2022/720 (EU VBER) and Vertical Guidelines. EU VBER entered into force on 1 June 2022 and will expire on 31 May 2034. See Practice Note: The Vertical Block Exemption Regulation 2022/720. On 9 May 2022, the UK government laid before Parliament the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (UK VABEO), SI 2022/516. The UK VABEO replaced the UK Retained VBER on 1 June 2022 and will expire on 1 June 2028. See Practice Note: The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022. Both the UK and EU regime...

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Guess (geo-blocking) (AT.40428) [Archived]

Guess (geo-blocking) (AT.40428) [Archived] CASE HUB ARCHIVED–this archived case hub reflects the position at the date of the decision of 17 December 2018; it is no longer maintained. See further, timeline, commentary and related cases. Case facts Outline European Commission Article 101 TFEU investigation into vertical restrictions on online advertising and cross-border sales imposed by Guess (Case AT.40428). Latest developments On 17 December 2018, the Commission issued its infringement decision against Asus, imposing a fine of €39.821m (following an ‘informal settlement’), for restricting retailers from online advertising and selling cross-border to consumers in other Member States (‘geo-blocking’) in breach of Article 101 TFEU. Parties Guess is an US-based clothing brand and retailer which designs, distributes and licenses clothing and accessories under numerous trademarks, including "GUESS?" and "MARCIANO". In the EEA, Guess operates a selective distribution system. Background The Commission opened its investigation on 6 June 2017 as a result of information obtained during its e-commerce sector inquiry. ...

Vertical agreements and UK competition law under the VBER 2010 [Archived]

Vertical agreements and UK competition law under the VBER 2010 [Archived] ARCHIVED: This Practice Note has been archived and is not maintained. It was drafted for the previous Vertical Restraints Block Exemption Regulation 330/2010 (VBER 2010), which was replaced in the UK by The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (VABEO) with effect from 1 June 2022. The VBER 2010, which applied in UK law as a retained EU block exemption, expired on 31 May 2022 and was replaced by the VABEO with effect from 1 June 2022. Under Article 15 VABEO, there was a 12 month transition period (until 1 June 2023) to accommodate pre-existing vertical agreements already in force before 1 June 2022 which (immediately before 1 June 2022) satisfied the conditions for exemption provided in the VBER 2010 but which did not satisfy the conditions for exemption provided in the VABEO. This Practice Note is therefore for background information only. For an assessment of vertical agreements under the VABEO, see further, Introduction...

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Technology Transfer Block Exemption—standard clauses (long form)

Standard clauses—general Definitions 1 Active Sales means actively approaching individual customers or marketing/advertising directly to specific customer groups, or customers in a particular territory in order to make sales; Contract Products means goods and/or services produced with the Licensed Technology; Exclusive Customer Groups is defined in Schedule [insert], with the relevant exclusive customers identified therein; Exclusive Term is defined in Schedule [insert]; ...

Technology Transfer Block Exemption—standard clauses (short form)

Standard clause—general Definitions 1 Active Sales means actively approaching individual customers or marketing/advertising directly to specific customer groups, or customers in a particular territory in order to make sales; Contract Products means goods and/or services produced with the Licensed Technology; Exclusive Customer Groups is defined in Schedule [insert], with the relevant exclusive customers identified therein; Exclusive Term is defined in Schedule [insert]; ...

Dive into our 2 Precedents related to Selective Distribution System

Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory under UK and EU competition law?

Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory under UK and EU competition law? Agreements between entities operating at different levels in the supply chain are often called ‘vertical agreements’. Distribution agreements are a type of vertical agreement. For more information, see: Distribution—overview and Lexology Panoramic: Distribution And Agency. There are several different types of distribution arrangement that can be utilised in a supply chain, including exclusive, non-exclusive (or ‘free’) and selective distribution. In the UK and EU, distribution agreements may benefit from an exemption from competition law restraints, provided they do not contain any prohibited or hardcore restrictions. Distribution and UK Competition Law Chapter I of the Competition Act 1998 and the vertical restraints block exemption order Chapter I of the Competition Act 1998 (CA 1998) prohibits agreements which prevent, restrict or distort competition within the UK. For further information, see Practice Notes: Chapter I prohibition and Introduction to the application of Chapter I to vertical agreements. Anti-competitive...

Which Precedent agreement options should a company consider when supplying a product to end-customers via a representative third party?

Which Precedent agreement options should a company consider when supplying a product to end-customers via a representative third party? In answering this Q&A, we have focussed on the commercial models of agency, distribution and franchising as suggested ‘go to market’ options, and also licensing arrangements. Other models or agreements, or a combination of models and agreements, may be suitable for the circumstances in question. Agency Agency is an arrangement under which a principal appoints an agent to act at its direction for specified purposes. In business, agents are commonly appointed for the purposes of introducing and concluding agreements with new customers, marketing or customer support. The agent is given authority by its principal for specified purposes. The agent contracts on the principal's behalf rather than on its own. For an introduction to agency relationships, see: Agency—overview. For more detailed information on the different types of agency that may be suitable for your situation, see Practice Note: Nature and types of agency. We have a number of agency...

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UK Competition law—daily round-up (31/10/2024)

A round-up of UK competition law developments, including (amongst other things) the CAT’s judgment holding that Deckers breached the Chapter I prohibition concerning restrictions on the sale HOKA running shoe brand

UK Competition law—daily round-up (10/05/2022)

A round-up of UK competition law developments, including the (1) competition law elements set out in the Queen’s Speech, and (2) Competition Act 1998 (Vertical Agreements Block Exemption) Order being laid before Parliament.

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