Resale price maintenance (RPM)

Many stakeholders have lobbied for a relaxation in the rules against stipulating resale prices/RPM. In particular, many feel that the current treatment of RPM policies as hardcore restrictions of competition law ignores possible efficiencies, which result from such practices.

The Commission has said that it is willing to explore engaging in a dialogue with businesses on instances where RPM practices are capable of leading to market efficiencies, such as expanding demand during the introductory stage of a product, which is recognised in the Vertical Guidelines. 

Dual distribution

With the recent growth of direct-to-consumer online sales, dual distribution (where a supplier competes directly with its supply chain at the retail level) has become more commonplace. There is a concern that the current rules no longer adequately take account of the horizontal issues that may exist between a supplier and distributor when they compete for the same customers. Dual distribution is generally covered by the block exemption at present but may inadvertently protect such horizontal issues.  

Among the solutions considered by the Commission is the limitation of the scope of the current block exemption to dual distribution relationships, which are unlikely to raise horizontal concerns by introducing a market share threshold in the downstream retail market. On the other hand, the Commission is contemplating whether to extend the exemption of dual distribution to wholesalers and importers (who, strictly-speaking, do not currently benefit). 

Active sales restrictions

Restrictions on active sales (i.e., actively approaching individual customers, specific groups of customers, or customers in a specific territory) by resellers are generally prohibited within the European Economic Area, unless they relate to active selling to exclusive territories, exclusive customer groups, or unauthorised resellers in a selective distribution system. Many stakeholders have described the rules as rigid because they prevent businesses from designing distribution systems according to local commercial needs. Respondents have also lobbied for a combination of exclusive and selective distribution in the same or different territories.

One possible option proposed by the Commission is to expand the exceptions for admissible active sales restrictions to provide suppliers with more flexibility to design their distribution systems. Another potential solution is to ensure more effective protection of selective distribution systems by allowing restrictions on sales from non-selective distribution territories to unauthorised resellers within selective distribution territories.

Online sales restrictions

Most online sales restrictions are currently regarded as hardcore restrictions of competition. One of the identified issues is that the current rules do not recognise that there are various indirect measures that may make online selling more difficult but that may be necessary and justified due to objective differences between the channels, e.g., the need to differentiate wholesale prices based on the costs specific to each channel (dual pricing). 

The Commission is contemplating whether to stop regarding dual pricing practices as hardcore restrictions.

Most-favored nation (MFN) clauses

Although parity obligations (where a supplier is required to offer the same/better conditions as those offered to others) are currently block exempted, some stakeholders have identified the anticompetitive effects of such MFN clauses, especially given their increased use in recent years. Concerns have been identified with MFN clauses in competition investigations into the hotel online booking sector and in the case of e-books.¹

Among the possible solutions, the Commission is considering whether to exclude certain types of sales channels from the exemption of MFN clauses or whether to exclude MFN clauses as a whole from the block exemption and instead require an effects-based assessment.