2025 at the Court of Justice of the European Union started with an interesting Opinion by AG Medina in Case C?581/23, Beevers Kaas (see: https://lnkd.in/dwEhcX8d)
It’s well-written and provides for an exemplary description of how the exclusive allocation of territories works in exclusive distribution systems. It relates to the previously applicable Block Exemption Regulation but retains importance. The AG confirms something we always knew (based on the European Commission’s Guidelines of 2010): that the protection against active sales presupposes the “parallel imposition” rule. This means that the granting of territorial exclusivity to a distributor and the application of the active sales ban to all other distributors is accompanied by an obligation for the supplier to protect the exclusive distribution rights of such a distributor vis-à-vis all its other distributors. The 2022 BER now includes an explicit rule about this, but that was not the case with the previous BER. The supplier must have explicitly or implicitly invited those other distributors to behave in a clearly defined manner on the market, not to engage in active sales in the exclusive territory. At the same time, the distributors must have, at least tacitly, expressed their will to acquiesce to that ban.
It is not sufficient for the supplier to show that its other distributors agree with the restriction of active sales in the exclusively allocated territory, if and when they are about to engage in active sales. That's too late. Instead, the supplier must show that the parallel imposition requirement is fulfilled for all distributors for the entire period for which it claims the benefit of the BER.
The Opinion is also useful in describing what is “concurrence of wills” in Article 101 TFEU and has some nice language at the end, in paras 107-108, on the application of Article 101(3): “[…] the referring court would then have to balance the pro-competitive and anticompetitive aspects of the agreement within the specific framework of assessment arising from Article 101(3) TFEU, taking into account all relevant circumstances. The referring court would have to assess inter alia the position of [the supplier’s] competitors, the purchasing power, the market dynamics, the nature of the product and the level of business at which the parties operate. It would also have to judge whether the agreement prohibiting certain distributors from engaging in active sales in a territory allocated exclusively to another distributor […] generates efficiency gains in the sense that the latter must make investments (for example, in specific equipment, skills or know-how) in order to develop sales of the product distributed in that territory, and whether protection against active sales by other distributors in that territory is necessary in order to stimulate such investments.” Very nice!
Highly recommended