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Selective distribution

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Selective distribution

Selective distribution in the European Union Law

Concept of Selective distribution provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Distribution system whereby a supplier enters into (vertical) agree-ments with a limited number of selected dealers in the same geographic area. Selective distribution agreements, on the one hand, restrict the number of authorised distributors. On the other hand, they prohibit sales to non-authorised distributors: this leaves authorised dealers only other appointed dealers and final customers as possible buyers. Selective distribution is almost always used to distribute branded final products.

The possible competition risks are a reduction in intra-brand compe-tition, the facilitation of () collusion between suppliers or buyers and the foreclosure of certain type(s) of distributors, especially in the case of cumulative effects of parallel networks of selective distribution in a market. Purely qualitative selective distribution is, in general, considered to fall outside the prohibition of Article 81(1) of the EC Treaty, provided three conditions are satisfied. Firstly, the nature of the product in question must necessitate a selective distribution system. Secondly, resellers must be chosen on the basis of objective criteria of a qualitative nature. Thirdly, the criteria laid down must not go beyond what is necessary.

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  • Vertical agreement

Self-Incrimination Definition

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Self-Incrimination Definition

Definition of Self-Incrimination

In the Orkem-judgment (para. 34) the ECJ stated that the “Commission may not compel an undertaking to provide it with answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to prove” The precise distinction between self-incriminating questions and lawful questions may sometimes be difficult to draw. However the following indications might be helpful.

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Whether a question is of a self-incriminating nature or not should be assessed from an objective perspective (average and reasonable respondent) rather than the perspective of the individual addressee (subjective perspective). It is not relevant which information the Commission already has in its possession when asking a question. This approach ensures an objective interpretation of the law, consistent with the principle of legal certainty. It is recommended to assess whether a company can answer a question truthfully without an admission of guilt.

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References

  • Information about Self-Incrimination Definition in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Self-Incrimination Definition in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Sending the requests for information

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Sending the requests for information

Sending the requests for information

Requests for information are normally signed by or on behalf of the Head of Unit or casemanager.

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It is advisable to send the request by fax or e-mail, if channels of communication with the addressee have already been established. If a large number of documents or handwritten documents in particular are attached to the request, it is advisable to send the request by registered post (see below). The addressee should be asked to return the acknowledgement of receipt attached to the letter.

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Requests for information may also be sent by registered post with acknowledgement of receipt, or by courier. In this case, when setting the time-limit, account must be taken of the time necessary to deliver the letter.

Other Considerations

Requests for information can also be sent electronically through the eQuestionnaire application, which provides respondents with secure and efficient web-based workspace to submit their replies to the Commission.

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Irrespective of the type of delivery chosen, the request must be registered and uploaded by the Registry in the case management application.

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Pursuant to Article 18(5), a copy of the request should be sent to the NCA of the Member State where the addressee is located as well as to the NCA of the Member State whose territory is affected. The case team must indicate on the minute to which NCAs the request must be copied. The Registry takes care of sending the copy to the relevant NCA(s).

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References

  • Information about Sending the requests for information in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Sending the requests for information in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Settlement procedure

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Settlement procedure

Settlement procedure (Article 15 Reg. 773/2004): Access to relevant information

According to Article 15(1a) of Regulation 773/2004: “After the initiation of proceedings pursuant to Article 11(6) of Regulation (EC) No 1/2003 and in order to enable the parties willing to introduce settlement submissions to do so, the Commission shall disclose to them the evidence and documents described in Article 10a(2) upon request and subject to the conditions established in the relevant subparagraphs. In view thereof, when introducing their settlement submissions, the parties shall confirm to the Commission that they will only require access to the file after the receipt of the statement of objections, if the statement of objections does not reflect the contents of their settlement submissions.”

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Article 10a (2) of Regulation 773/2004 stipulates: “Parties taking part in settlement discussions may be informed by the Commission of: (a) the objections it envisages to raise against them; (b) the evidence used to determine the envisaged objections; (c) non-confidential versions of any specified accessible document listed in the case file at that point in time, in so far as a request by the party is justified for the purpose of enabling the party to ascertain its position regarding a time period or any other particular aspect of the cartel; and (d) the range of potential fines. This information shall be confidential vis-à-vis third parties, save where the Commission has given a prior explicit authorisation for disclosure. Should settlement discussions progress, the Commission may set a time limit within which the parties may commit to follow the settlement procedure by introducing settlement submissions reflecting the results of the settlement discussions and acknowledging their participation in an infringement of Article 81 of the Treaty as well as their liability. Before the Commission sets a time limit to introduce their settlement submissions, the parties concerned shall be entitled to have the information specified in Article 10a(2), first subparagraph disclosed to them, upon request, in a timely manner. The Commission shall not be obliged to take into account settlement submissions received after the expiry of that time limit.”

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References

  • Information about Settlement procedure in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Settlement procedure in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Second Advisory Committee on fines

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Second Advisory Committee on fines

Second Advisory Committee on fines

The purpose of this second Advisory Committee is to present the proposals of DG Competition on the level of fines, as agreed by the Commissioner. The invitation has to be sent out 14 days in advance, but without communication of the proposal on fines.

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The case team describes and explains DG Competition's proposal on the level of fines, and, if relevant, also on a revised version of the draft decision following the first Advisory Committee). Once the debate is closed, the secretariat of the Advisory Committee drafts the opinion of the second Advisory Committee. Where Member States so recommend, opinion will also later be published in the OJ (along with the decision, the final report of the Hearing Officer and the opinion of the first Advisory Committee).

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References

  • Information about Second Advisory Committee on fines in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Further Reading

  • Information about Second Advisory Committee on fines in EU Competition Procedure, 3rd. Edition, Edited by Luis Ortiz Blanco (Oxford University Press)

Self-Incriminating Nature

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Self-Incriminating Nature

How to react if a company claims that a question is of a self-incriminating nature

Where the addressee of a request for information pursuant to Article 18(2) of Regulation 1/2003 refuses to reply to a question in such a request invoking the privilege against self-incrimination, as defined by the case law of the Court of Justice of the European Union 1 , it may raise the matter with DG Competition before the expiry of the original time limit set 2 , otherwise it may simply not reply to this question and settle the discussion, if the questions infringe the privilege against self-incrimination, in the framework of an Article 18(3) decision.

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If DG Competition is convinced that its questions were not of a self-incriminating nature, it should inform the addressee of the request for information of its position.

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If, after having been informed of DG Competition's position, the undertaking still maintains that the questions addressed to it are self-incriminating, it may refer the matter in due time to the Hearing Officer. In appropriate cases, and having regard to the need to avoid undue delay in proceedings, the Hearing Officer may make a reasoned recommendation to the Competition Commissioner as to whether the privilege against self-incrimination applies and inform the director responsible of the conclusions drawn. The addressee of the request receives a copy of the reasoned recommendation.

Other Considerations

If, following the undertaking's refusal to reply to the simple request for information, a decision pursuant to Article 18(3) is adopted, such decision should take into account the Hearing Officer's reasoned opinion. The addressee of the Article 18(3) decision will in any case be reminded of the privilege against self-incrimination as defined by case law of the Court of Justice of the European Union 3 .

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References

  • Information about Self-Incriminating Nature in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Notes


[Note 1] See for example Case C-301/04 P Commission v. SGL, [2006] ECR I-5915, which specifies that addressees of an Article 18(3) decision may be required to provide pre-existing documents, such as minutes of cartel meetings, even if those documents may incriminate the party providing them.
[Note 2] 2)(b) of the terms of reference of the Hearing Officer and Notice on Antitrust Best Practices, para. 36.
[Note 3] See for example Case C-301/04 P Commission v. SGL, [2006] ECR I-5915, which specifies that addressees of an Article 18(3) decision may be required to provide pre-existing documents, such as minutes of cartel meetings, even if those documents may incriminate the party providing them.

Further Reading

  • Information about Self-Incriminating Nature in “An Introduction to EU Competition Law”, Moritz Lorenz (Cambridge University Press)

Self-Incrimination Admissible Questions

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Self-Incrimination Admissible Questions

Categories of questions that are admissible

In line with the existing case law two types of questions are fully compatible with the privilege against self-incrimination (i.e. these types of questions are lawful).

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The provision of documentary 1 evidence already in the possession of the undertaking may always be requested without infringing the privilege against self-incrimination. This applies regardless of whether or not the documents at issue contain incriminating evidence which may be used against the addressee of the request or against any other third party.

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Questions seeking purely factual information are normally admissible and do not infringe the privilege against self-incrimination

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References

  • Information about Self-Incrimination Admissible Questions in the Antitrust Manual of Procedures for the application of Articles 101 and 102 TFEU (Internal DG Competition)

Notes


[Note 1] It is submitted that “document” does not only mean written notes but in accordance with footnote 12 of the Commission Notice of 13 December 2005 on the Rules for Access to the Commission file “all forms of information support, irrespective of the storage medium. This covers also any electronic data storage device as may be or become available.”

Further Reading

  • Information about Self-Incrimination Admissible Questions in “An Introduction to EU Competition Law”, Moritz Lorenz (Cambridge University Press)