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Summary Vertical Agreements

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- Vertical Agreement - Brand Competition - Article 101 TFEU v Chapter 1 Commercial Act

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  • March 17, 2020
  • 7
  • 2016/2017
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Vertical Agreements


VERTICAL AGREEMENTS
Article 1.1(a) VRBE
1) Agreement
2) Entered into between 2 or more undertakings
3) Each operates at a different level of the production or distribution chain
4) (Re)sells certain goods or services.


BRAND COMPETITION
a) Inter-brand competition
 Competition dynamic relating to different brands of same product.


Single branding agreement
 Powerful retailer agrees to purchase X product only from Manufacturer A.
 Other manufacturers unable to sell products at this influential store.
 THUS their route to market => Restricted.
 *Depends on market power of retailer;
o Low power => Minimal impact on market => Other manufacturers will have other
available routes to market.


b) Intra-brand competition
 Competition dynamic relating to same branded product.


Problems
 Manufacturer insists all stores to sell product at same price.
 Manufacturer attempts to prevent/reduce competition between stores that stock its
goods.
 THUS no opportunity for stores to attract more consumers by lowering their price.
 THUS consumers forced to buy product at fixed price at all stores.

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