The supplier has the total freedom to sell directly and appoint other distributors within the territory. The supplier designates a distributor as its sole distributor within a territory, but the supplier reserves the right to deliver the goods directly to the end consumer. Restrictions on the territory on which the distributor is authorized to sell or to customers to whom the distributor is authorized to sell must be free to choose where and to whom they sell, but “active selling” restrictions are permitted (but only if there is (i) an exclusive agreement, i.e. the territories are reserved exclusively for the supplier or another distributor); and (ii) the supplier is not allowed to limit passive sales). From 2021, EU authorities will lose the power to conduct on-the-spot investigations in the UK (also known as Dawn Raids). Instead, their investigative powers are limited to written requests for information from UK-based companies. The CMA will replace them as the central competition law enforcement body in the United Kingdom and will consider anti-competitive agreements and any possible abuse of dominance. When negotiating contractual terms, draft contracts can be used as a checklist. It cannot replace professional advice and any use is done at its own risk. Even if a distribution agreement contains an excluded restriction, the agreement may still benefit from the category exemption if the challenge clause can be dissociated from the agreement.
Under these conditions, the other parts of the distribution contract may be maintained. An illegally excluded restriction cannot be dissociated from an agreement if such a separation would destroy the fundamental character of the agreement. What do you think of an exclusive sales contract? FAS Russia: Ipsen unreasonably rejected Biotek, contract for the supply of drugs – In order not to enter into a contract with a counterparty of the pharmaceutical company changed its commercial policy several times during the verification of the application of the distributor. The FAS Russia gave a (…) Companies involved in anti-competitive behaviour may consider their agreements to be unenforceable and may be fined up to 10% of their global turnover for particularly harmful behaviour.