The Italian Competition Authority to examine a resale price maintenance agreement

By a decision made on 22 October 2013 Italian Competition Authority (ICA) has opened an Artice 101 TFEU investigation into an alleged resale price maintenance agreement (RPM) in the case I766 Inverter Solar edEolici – Imposizione Prezzi Minimi (Inverter). Power-One Italy (POI) is part of a group trading worldwide in the markets for the production and commercialization of photovoltaic and aeolian inverters.
A report lodged with the ICA alleged that POI imposed a RPM on the dealers that belonged to its distribution network. The allegation was based on two documents attached to the report.
First, the letter of 17 October 2012 having as object “ Minimum selling price”. By this letter the vice-president of POI reminded distributors, resellers and partners of the fact that since January 2012 a minimum reselling price system was introduced in all our price lists. The  letter also requested dealers to comply with the RPM obligation, stressing that POI would terminate the contract with non compliant dealers.
Second, the model distribution agreement of January 2012 used by POI to govern its Italian distribution network included, among other things, the term that authorized distributors would have to strictly comply with the prices reported in the price lists of the manufacturer.
Inverter is one of the few RPM investigations launched by the ICA over the past years. Another RPM investigation was recently opened in November 2012 in the Enervit case, while other RPM cases dated back to 2008 (Vendita al  dettaglio di prodotti cosmetici) and 1996 (Associazione LIbrai Italiani/Editori), respectively.

Considering the documentary evidence already in possession of the ICA, it can be argued that the above described arrangements are likely to be qualified as RPM. The ICA follows the strict same approach as the European Commission in the competition appraisal of RPM, being regarded as a hard-core restriction. In Inverter the ICA believed that the RPM may impede distributors from competing on price on the downstream markets for the sale of inverters. Moreover, the RPM at hand might facilitate the collusion between manufacturers. According to the ICA the fact that most of the POI distributors also marketed the products of POI competitors should increase the risk of collusion. 

Comments

Post a Comment

Popular posts from this blog

Aspen: The Italian Competition Authority fines a generic manufacturer of drugs for excessive pricing

By the decision made on 29 September 2016 in Aspen [i] , the Italian Competition Authority (ICA) has imposed a fine of more than EUR 5 million on the Aspen group (Aspen), a South African manufacturer of generic drugs. Aspen violated Article 102 TFEU by imposing excessive prices for the supply of the so-called ‘Cosmos drugs’. These drugs included Leukeran, Alkeran, Purinethol and Tioguanine, which included the active principles of chlorambucil, melphalan, mercaptopurine and tioguanine, respectively. All these drugs were used to treat cancer pathologies and included in a wider package of pharmaceutical products, whose marketing rights had been purchased by Aspen from the originator GlaxoSmithKline (GSK) in 2009. Aspen had a dominant position in the relevant product markets for the commercialization of anti-cancer drugs manufactured using the active principles of alkeran, leukeran, purinethol and tioguanine. It had the only one market authorization for the sale of drugs and potential ...
Read more

Geographical allocation of turnover in aviation mergers: What the European Commission recently hold

The European Merger Control Regulation (ECMR) stipulates that only concentrations with a European dimension fall within the regulatory jurisdiction of the European Commission to review. A concentration is presumed to have such a dimension when it meets the financial threshold in Article 1 of the ECMR. To this end, it is necessary to calculate the turnover generated by the merging parties within the Community or in one or more member states. However, the geographical allocation of the turnover required by Article 1 for the purpose to establish the Commission’s jurisdiction can be a tricky issue in case of mergers between undertakings with a cross-border activity such airliners. In fact, the activities of airlines span several countries as they typically operate flights and sell tickets in many national markets. Recently, the Commission has dealt with the issue at length in the Ryanair/Aer Lingus case. It identified three possible methodologies for geographical allocation of turnover: -...
Read more

The European Commission unconditionally clears the Facebook/WhatsApp merger

By a Phase I decision the Commission unconditionally approved the Facebook $ 19 billion acquisition of WhatsApp ( Case No COMP/M.7217,Facebook/WhatsApp) . The Commission was required by the parties to review the transaction by means of a reasoned submission filed on the basis of Article 4(5) of the EU Merger Regulation. Indeed, the merger was not a concentration with EU dimension within the meaning of Article 1 EUMR falling within the Commission jurisdiction, since the EU turnover of WhatsApp in 2013 failed to met the financial thresholds in that provision. The Commission identified three relevant product markets affected by the concentration. It restrained the first relevant market, the market for consumer communication services, to the communication apps for smartphones, because WhatsApp was available only for this device. Following its approach in Microsoft/Skype (Case M.6281), upheld by the General Court in the case T-79/12, Cisco Systems and Messagenet v Commission, the Com...
Read more