The Italian Competition Authority closes with a commitment decision an investigation into 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 ed Eolici – Imposizione Prezzi Minimi (Inverter). 
The ICA believed that Power-One Italy (POI) imposed a RPM on the dealers that belonged to its distribution network. By the letter of 17 October 2012 having as object “ Minimum selling price”, 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. In addition, a clause in the model distribution agreement of January 2012 used by POI to govern its Italian distribution network obliged the authorized distributors to strictly comply with the prices reported in the price lists of the manufacturer.
To deal with the competition problems arising out the RPM arrangement, DOI offered a set of behavioural commitments. The commitments were approved and made binding by the ICA, which then closed the proceedings with a commitment decision on the basis of Article 14-ter of the Italian Competition Act.
DOI committed to adopt new distribution agreements both in replacement of those already in force and to govern future commercial relationships with dealers that will be admitted in the distribution network. The new agreements rest on the principle of the unconditioned freedom for distributors to set reselling prices. In that regard, DOI shall refrain from including in the distribution agreement any RPM clauses and price recommendations. DOI also gave the undertaking to not impose any mechanism that indirectly might influence the pricing decisions of traders. DOI also will not impose on distributors any price benchmarks or information exchange obligations. Only the commitments regarding price recommendations, benchmarks and information exchange will be in place for a three-year period, while the others will be permanent.
Moreover, DOI committed to remove from future and present agreements any territorial and product exclusivity, though such clauses were not contested by the ICA. As a result, no restriction for passive and active sales will be in place for an initial period of three years. Afterwards, the distribution agreements may provide for a territorial exclusivity only on active sales. Then, a distributors may accept orders from customers in territories allocated to other distributors.
The ICA favourably viewed the DOI commitments. In particular, it took the view that the abolition of territorial and products exclusivity on active sales might promote intra-brand and inter-brand competition. Incidentally, the DOI commitment on active sales went beyond EU provisions on vertical restraint, which prohibit only passive sales ban. As in Inverter Solar ed Eolici, also in the Enervit case, the other RPM investigation the ICA recently started, the parties offered a set of commitments that the ICA is still reviewing. These recent cases may indicate that, alhough RPM are serious competition infringements, the ICA is however ready to accept suitable commitments by the parties and, accordingly, close the investigation without adopting an infringement decision.

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