- within Antitrust/Competition Law topic(s)
- in India
- within Antitrust/Competition Law, Litigation, Mediation & Arbitration and Real Estate and Construction topic(s)
- with Inhouse Counsel
The Court of Justice of the European Union introduces, for the first time, the concept of a supplier's parallel obligation in the context of exclusive distribution agreements.
From now on, when a supplier grants territorial exclusivity, it
must protect the exclusive distributor against active sales by
other resellers in this territory.
This obligation implies genuine contractual reciprocity: the
supplier must inform resellers, obtain their agreement –
whether explicit or tacit – and ensure that this protection
is respected.
Failing this, the agreement may no longer benefit from the exemption provided by the block exemption regulation, exposing the parties to the risk of nullity.
This is a major development in competition law, prompting companies to review their distribution agreements and sales monitoring practices. Michel Ponsard, a partner at UGGC Avocats and President of the French Association for Competition Studies, discusses the implications of this decision in the Be Smart for Change program.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
