Selective Distribution and Online Sales - the transformation of European Competition Law into the electronic society

Abstract

This thesis evaluates the new Vertical Block Exemption Regulation and accompanying Guidelines regarding their treatment of selective distribution. Further, it makes a prospective examination of the view on selective distribution in European Competition Law, especially regarding online sales. During the ten years that passed since the last Vertical Block Exemption Regulation and accompanying Guidelines were introduced, the global market has developed in a rushing speed, much thanks to the Internet. The growing online markets have created enormous opportunities as well as problems, by shrinking the world and completely change the possibility to control markets. Therefore, the treatment of online distribution was at heart of the discussion when the old rules were to be reviewed. The main issues approached were the application of the concepts of “active” and “passive” sales on the internet and the ways in which suppliers may restrict the online behaviour of their distributors within exclusive and selective distribution systems. The review of the old rules led to an intense debate between the promoters for selective distribution systems on one side and the so called pro-internet lobby on the other. The former argued for the importance of controlling the online behaviour of appointed distributors, while the latter held that all restrictions on online sales must be individually justified and not benefit from the Block Exemption. The final result appears to be a compromise and the Commission has more than anything tried to find ways of translating the rules on offline distribution to online sales, giving wide opportunities for distributors to operate online once they have a physical point of sales. The Commission has done quite well in its ambition to clarify the rules on internet distribution even if some uncertainties remain. Whilst continuing towards a more economic approach, it has been clearly influenced with the aim for market integration, which can be seen in the tough treatment of restraints hindering parallel trade and the protection of differential price settings on markets within the European Union.