Brussels, 21/04/2010 (Agence Europe) - On Tuesday 20 April, the European Commission adopted a regulation block exempting agreements between manufacturers and distributors for the sale of products and services. The regulation and accompanying guidelines take into account the development, over the last 10 years, of the internet as a force for online sales and for cross-border commerce, two forms of sales that the Commission wants to promote since they increase consumer choice and price competition.
The basic principle remains that companies are free to decide how their products are distributed, provided 1) their agreements do not contain price-fixing or other hardcore restrictions, and 2) both manufacturer and distributor do not have more than a 30% market share. Approved distributors are free to sell on the internet without limitation on quantities, customers' location and restrictions on prices.
The new rules also specifically, address the question of online sales. Once authorised, distributors must have the same sales facilities on their websites as they do in their traditional shops and physical points of sale. For selective distribution, this means that manufacturers cannot limit the quantities sold over the internet or charge higher prices for products to be sold online. The guidelines further clarify the concepts of “active” and “passive” sales for exclusive distribution. Terminating transactions or re-routing consumers after they have entered their credit card details showing a foreign address will not be accepted. The new rules will come into force in June and will apply until 2022, with a one-year transitional phase.
The current Block Exemption Regulation (BER) was adopted in 1999 and exempts agreements that comply with EU competition rules - Article 101(3) of the EU Treaty. Like the old rules, the new BER seeks to reduce the regulatory burden for companies without market power, in particular for SMEs. (L.C./transl.rt)