Brussels, 24/06/2002 (Agence Europe) - The European Commission has dropped its objections against the distribution system of B&W Loudspeakers Ltd after the UK-based company, which makes high-quality loudspeakers for hi-fi and home cinema sound reproduction systems, put an end to certain hard-core violations of antitrust law. In January 2000, B&W Loudspeakers, Europe's second most important supplier of top-quality loudspeakers after Bang & Olufsen, notified a selective distribution system for its products requesting clearance under EU competition rules. After a careful analysis, the European Commission came to the preliminary conclusion, in December 2000, that the agreements could not qualify for an exemption under the general rules applying to distribution agreements and started formal proceedings against B&W Loudspeakers.. B&W Loudspeaker's distribution system contained several 'hard-core' restrictions of competition, namely minimum retailer prices disguised as a prohibition on 'bait pricing', restrictions on cross supplies between authorised dealers and a prohibition on distant sales including through the Internet. (See EUROPE 8 December 2000).Following the opening of these formal proceedings, B&W Loudspeakers undertook to delete the restrictions on distance selling from its agreements. Retailers can now request B&W Loudspeakers to do distant selling. B&W Loudspeakers can only refuse such requests in writing and on criteria that concern the need to maintain the brand image and reputation of the products. The criteria must be applied indiscriminately and must be comparable to those for sales from a traditional retail outlet. The modifications satisfy the Commission which sent a so-called comfort (administrative) letter which states that B&W from now on benefits from the safe harbour provided by the 1999 Block Exemption Regulation on distribution and other vertical agreements.