EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

Guidelines refer to a block exception for situations where the purpose of requiring differential pricing is to incentivise or reward an appropriate level of investment in the online and offline channel. The different price should be related to the differences in investments and costs incurred in each channel by the distributors at the retail level. The wholesale price difference, however, must not be driven by an object to prevent the effective use of the internet for the purpose of selling online – otherwise, it is a hardcore restriction. This concerns particularly situations in which the price difference would make “the effective use of the internet for the purposes of selling online unprofitable or financially not sustainable” (the Draft Vertical Guidelines, para. 195). In general, the author welcomes this proposal. In practice, to motivate offline distributors to promote the manufacturer’s brand when the manufacturer cannot reward the distributors for their efforts and investment with a lower wholesale price is a tough nut to crack for the manufacturer. Under current regime, it can only provide them with a fixed fee to support offline sales, but this may not vary depending on the turnover realised (Vertical Guidelines, para. 52(d)). Therefore, offline and hybrid distributors often become less competitive compared to the pure online players who can afford to sell at low retail prices given their minimal sales costs. The current possibility of applying Article 101(3) of the TFEU, explicitly mentioned only in the case of higher costs for the manufacturer and not for distributors, does not make sense in the context of business reality (Vogel, L., p. 277). A practical approach taking into account the distributors’ costs is therefore more reasonable. However, the interpretation of the second part of para. 195 of the Draft Vertical Guidelines concerning the prohibition of dual pricing in situations where its object is to prevent the effective use of the internet for online sales could raise interpretative problems. In practice, there may be a thin line between conduct that benefits from the safe harbour (rewarding an appropriate level of investment) and conduct that is a hardcore restriction (preventing the effective use of the internet for the purpose of selling online). Thus, the assessment of whether the conditions for applying the block exemption will be met is likely to require objective justification based on the costs that the distributor incurs in selling via each distribution channel. The prices charged to both channels should be more or less equivalent, taking into account the costs incurred by each channel. This may not only be quite problematic from a practical point of view, but may also carry a risk, e.g., in the case of a dual distribution system in the context of the exchange of potentially competitively sensitive information (see the new rules under Article 2(5) of the VBER). Therefore, unless an element of clarity is introduced into this provision, the self-assessment of this kind of vertical restraint under the new regime may not

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