{"id":10035,"date":"2022-07-03T19:12:58","date_gmt":"2022-07-03T19:12:58","guid":{"rendered":"http:\/\/legalblog.ie\/older-decisions\/"},"modified":"2022-11-18T22:12:43","modified_gmt":"2022-11-18T22:12:43","slug":"older-decisions","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/older-decisions\/","title":{"rendered":"Older Decisions"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Commercial_Agency\" title=\"Commercial Agency\">Commercial Agency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Older_Notifications\" title=\"Older Notifications\">Older Notifications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Older_Vertical_Category_Licences\" title=\"Older Vertical Category Licences\">Older Vertical Category Licences<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Potentially_Permissible\" title=\"Potentially Permissible\">Potentially Permissible<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Potentially_Anti-Competitive_Clauses\" title=\"Potentially Anti-Competitive Clauses\">Potentially Anti-Competitive Clauses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Prices\" title=\"Prices\">Prices<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Restrictions_on_Resellers\" title=\"Restrictions on Resellers\">Restrictions on Resellers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Distribution\" title=\"Distribution\">Distribution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Joint_Ventures\" title=\"Joint Ventures\">Joint Ventures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/older-decisions\/#Partnerships\" title=\"Partnerships\">Partnerships<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Commercial_Agency\"><\/span>Commercial Agency<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The EU Directive on commercial agency provides for the terms on which restrictions may be imposed on commercial agents following the termination of the agency. Non-compete clauses are valid only to the extent that it is concluded in writing and relates to a geographical area or group of customers and geographical area entrusted to the commercial agents and the type of goods covered by the agency under the contract.<\/p>\n<p>It shall be valid for not more than two years after termination of the agency.\u00a0 This principle is without prejudice to other rules on restraints under domestic law.<\/p>\n<p>If the agent is a part of the undertaking or business, no competition law issues arise, \u00a0as there is no arrangement or agreement between undertakings. Where the agent is not in substance part of the business, such as where it deals with other goods, competition law is potentially applicable in full.<\/p>\n<p>The substance of the position will be reviewed and the labels put on the agreement will not be conclusive.\u00a0 The competition authority has been particularly concerned by the cumulative effects of restrictions placed on many agents.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Older_Notifications\"><\/span>Older Notifications<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The following is Irish material on vertical constraints under the Competition Act 1991 and 1996 and notifications under it.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Older_Vertical_Category_Licences\"><\/span>Older Vertical Category Licences<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Before the present more general Verticals Declaration, the Competition Authority had adopted a \u00a0more specific and prescriptive certificate and category licences.\u00a0 It applied to vertical agreements between undertakings at different stages in the supply chain in respect of the same product or service. It, therefore, included franchising agreements, selective distribution, exclusive purchasing, and nonexclusive and exclusive distribution.<\/p>\n<p>The older Certificate acknowledged that restraints may or may not have anticompetitive effects, depending on the circumstances.\u00a0 It recognised those certain vertical restraints at positive economic effects overall, \u00a0while others were not welfare-enhancing.<\/p>\n<p>Vertical agreements could potentially promote the sale of products and lead to intensive marketing and continuity of supplies while rationalising distribution.\u00a0 The appointment of an exclusive distributor may be the most effective way for the manufacturer to enter a market and compete with the existing manufacturer.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Potentially_Permissible\"><\/span>Potentially Permissible<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Competition Authority took the view that vertical agreements may lead to an improvement in distribution because of concentration on sales activity without the need to maintain numerous business relations with a large number of dealers.\u00a0 Accordingly, vertical restraints should not automatically be deemed anti-competitive.\u00a0 Where negative effects arise, they may not have significant economic effects in the absence of significant market power on the part of the supplier or distributor\/retailer level.<\/p>\n<p>Generally, the Authority was of the view that when either the supplier or the reseller has a market share in excess of 20 per cent, there is unlikely to be a sufficient degree of market power for any non-price vertical restrain to have an adverse effect on competition.\u00a0 The market should not generally be foreclosed.\u00a0 In such circumstances, the Authority accepted that non-price vertical restraints may not be, generally, anti-competitive.<\/p>\n<p>However, if the parties have more than 20 percent of the relevant market, they may enjoy market power. A market analysis may show that non-price vertical agreements may have an anticompetitive effect in the particular circumstances.<\/p>\n<p>Non-exclusive distribution agreements do not allocate territory to the reseller.\u00a0 They do not, in general, prevent, restrict or distort competition.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Potentially_Anti-Competitive_Clauses\"><\/span>Potentially Anti-Competitive Clauses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Authority were of the view that certain types of clauses may contravene the Competition Act.\u00a0 They fall into the following categories;<\/p>\n<ul>\n<li>resale price maintenance;<\/li>\n<li>absolute territorial protection;<\/li>\n<li>post-term non-compete clauses;<\/li>\n<li>limitations on the distributors&#8217; freedom to set prices.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Prices\"><\/span>Prices<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Competition Authority indicated that maximum retail price maintenance may be anti-competitive in some circumstances but may not always be so.\u00a0 It may enable franchisors to encourage outlets to engage in price promotions nationwide.<\/p>\n<p>It may boost sales volumes by lowering prices.\u00a0 However, the Authority emphasised that they may carry significant risks and may be scrutinised in detail.<\/p>\n<p>Recommended prices may not contravene the Competition Act provided retailers are free to set their own prices.\u00a0 However, in order to be acceptable, the price recommendation must specifically inform the seller that they are free to set their own prices, contain no reference to margin, involve no requirement to display the recommended price and provide that no measure is taken to secure the adherence to the price.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Restrictions_on_Resellers\"><\/span>Restrictions on Resellers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Restrictions which prevent re-sellers from selling outside the territory allocated to them is restrictive of competition.\u00a0 It viewed the restriction as particularly invidious, where it \u00a0may be part of the chain of similar agreements.<\/p>\n<p>Post-term restrictions may contravene the Competition Act.\u00a0 Franchise agreements, providing a non-compete clause for one year is afterwards termination, will not generally convene the restriction provided it is necessary in order to protect the goodwill.\u00a0 It is recognised that the franchisor may have supplied the necessary information, training, intellectual property and know-how necessary to operate the business.<\/p>\n<p>Other categories of agreement which might breach the general prohibition but may be potentially permissible on the basis that they allow a fair share of the benefit to consumers. The categories certificate recognises notwithstanding that some vertical agreements may have anti-competitive effects where the market share exceeds 20 percent, they may lead to efficiencies in distribution.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Distribution\"><\/span>Distribution<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Some vertical agreements may allow manufacturers to concentrate on production by delegating distribution functions as to specialise resellers who already possess the necessary organisation and dealer contacts.\u00a0 It may promote the development of intensive marketing and continuity of supplies. \u00a0Non-vertical price restraints may allow a fair share of the resulting benefit provided, where they lead to improvement in distribution and lead to a \u00a0wider choice of products being available to consumers.<\/p>\n<p>Some non-price vertical \u00a0restraints in exclusive distribution, franchising and selective distribution agreements may be indispensable to the attainment of a legitimate objective.\u00a0 The economic analysis may show that there create strong incentives for resellers to devote the necessary time and resources promoting and selling the products of the manufacturer, in circumstances where it will be difficult to monitor the activities of the reseller.\u00a0 They may be essential to maximize efficiency in distribution.<\/p>\n<p>The category license provided that neither party to the agreement should hold a share in excess of 40 percent of the market. Where either party to the arrangement has a market share of more than 40 percent, the arrangement may afford the possibility of eliminating competition in a substantial part of the goods and services in question.<\/p>\n<p>Generally, where the share exceeds this level, they did not necessarily qualify under the category license.\u00a0 Individual agreements might satisfy the requirement, even where the market shares exceed 40 percent.<\/p>\n<p>Franchising agreements whereby one party grants the right to exploit a \u00a0package of industrial and intellectual property rights relating to trademarks, trade names, know-how, shop signs will be within its terms. The category license provided that neither party to the agreement should hold a share in excess of 40 percent of the market. Retail prices maintenance and absolute price territorial protection was not generally permissible.\u00a0 The same provisions, as set out above, apply.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Joint_Ventures\"><\/span>Joint Ventures<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Some categories of joint ventures are recognized as potentially positive in competition terms.\u00a0 Joint ventures vary considerably in their nature and purpose.\u00a0 In broad terms, they involve a business or enterprise under the joint control of a number of sponsoring parties which are not themselves related.\u00a0 Each contributes significantly.\u00a0 The enterprise is a separate entity from its sponsor \/ parent.<\/p>\n<p>Joint ventures may be fully function or partial function. A partial function joint venture takes on limited functions and is generally not a business in its own right.\u00a0 A full-function joint venture has the characteristics of a standalone business.\u00a0 Joint ventures are subject to the general principles of competition law. Issues of collective dominance may arise in the context of joint ventures.\u00a0 Joint ventures may give occasion for anti-competitive behaviour or constitute cartels in themselves.<\/p>\n<p>Joint ventures are commonly employed in relation to research and development, purchasing, sales, joint production, diversification, expansion into new areas, joint marketing and joint specialisation. They may contribute positively towards competition and general economic objectives.\u00a0 They may allow for integration of the internal market within the EU, facilitate risky investments, develop new products, promote and attract innovation, improve the competitiveness of the EU industry and eliminate structural overcapacity.<\/p>\n<p>In the other hand, joint ventures carry the danger of anticompetitive cooperation.\u00a0 A joint venture may in substance, be a cartel or cartel-like arrangement.\u00a0 The formation of a joint venture is generally subject to merger control.\u00a0 See sections on the criteria for merger control.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Partnerships\"><\/span>Partnerships<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Partnerships, in the true sense, constitute a single enterprise or business.\u00a0 They would not have themselves constitute arrangements or agreements between undertakings as there is only one undertaking.<\/p>\n<p>They may be in a dominant position, which may be abuses. As with joint ventures, some arrangements which might be labelled \u201cpartnerships\u201d may constitute or offer opportunities for agreements or arrangements of an anti-competitive nature.<\/p>\n<p>Limitations on the distributors&#8217; freedom to set prices will almost invariably be anti-competitive.\u00a0 It may facilitate curtail arrangements of suppliers or distributor level.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-10035\" data-postid=\"10035\" class=\"themify_builder_content themify_builder_content-10035 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Commercial Agency The EU Directive on commercial agency provides for the terms on which restrictions may be imposed on commercial agents following the termination of the agency. Non-compete clauses are valid only to the extent that it is concluded in writing and relates to a geographical area or group of customers and geographical area entrusted [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[158,159],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10035"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=10035"}],"version-history":[{"count":4,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10035\/revisions"}],"predecessor-version":[{"id":20502,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/10035\/revisions\/20502"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=10035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=10035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=10035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}