In context

Exclusive purchasing clauses can have an anti-competitive object

December 9, 2013
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In context

The Supreme Court ruled that an exclusive purchasing clause had an anti-competitive object as it was concluded between parties that had a vertical as well as a horizontal relationship with each other. This shows that you cannot blindly rely on EU case law on exclusive purchasing clauses in vertical relationships: you need to first understand the legal and economic context of each case.

A transfer deed relating to two parcels of land stipulated that the purchaser of the land could only establish a petrol station there if it bought all its motor fuels from a company affiliated with the claimant. In assessing this exclusive purchasing clause, the Supreme Court reiterated EU case law which states that an agreement involves a restriction of competition ‘by object’ where, following a concrete and individual examination of the wording and aim of the agreement and of the economic and legal context of which it forms a part, it is apparent that it is, by its very nature, injurious to the proper functioning of normal competition on the market or markets concerned. According to the Supreme Court, the exclusive purchasing clause is not comparable to those in EU case law (e.g., Pedro IV) referred to by the claimant because, unlike those clauses, the clause at hand related not only to a vertical agreement between a supplier and a purchaser but also to a horizontal relationship because the claimant was also active on the retail market for petrol. In fact, the Supreme Court held that the case law cited by the claimant favoured its own view as it specifically stated that “even if (emphasis added) those [exclusive purchasing agreements] do not have as their object the restriction of competition (…), it is nevertheless necessary to ascertain whether they have the effect of preventing, restricting or distorting competition.”

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