An Agreement Between A Manufacturer And A Distributor Stipulating That A Dealer

On the other hand, the European Commission (EC) has defined RPM as “concerted agreements or practices with the direct or indirect purpose of setting a fixed or minimum selling price or a fixed or minimum price level to be respected by the purchaser.” 9 According to the Commission`s vertical restriction guidelines, it is theoretically possible to argue that an agreement containing the RPM should not be subject to the prohibition of Article 101, paragraph 1 of the Treaty on the Functioning of the European Union (TFUE) when it brings efficiency gains under Article 101, paragraph 3, of the Treaty on the Functioning of the European Union, the EU competition authorities believe in practice that the EU competition authorities fall under Article 101, paragraph 1 of the Treaty. A: Exclusive distribution agreements such as these are generally allowed. Although the retailer is prevented from selling competing flat screens, this may be the type of product that requires a certain level of knowledge and service to sell. For example, if the manufacturer invests in training the distributor`s sales staff in the operation and characteristics of the product, it may reasonably require the distributor to agree to sell only its brand of monitors. This level of service benefits buyers of sophisticated electronic products. As long as there are enough opportunities for consumers to buy their products elsewhere, antitrust laws are unlikely to encroach on these types of exclusive agreements. The first was in the case of M/s Esys Information Technologies Pvt. Ltd. v. Intel Corporation – Anr1 .

In this case, the informant (a distributor) asserted that Intel was a dominant company that had engaged in the practice of RPM. However, the ICC found that Intel`s mere monitoring of the resale price at the macro level cannot be characterized as maintaining the resale price within the meaning of Section 3.4 (e) of the Act and cannot be considered a single infringement of competition. The Director General of investigation (DG) found no evidence that Intel`s aforementioned act would create barriers to new entrants, exclude existing competitors from the market or exclude competition. The ICC`s consistent approach in all of these decisions is to study the impact of speed on the market rather than adopting an approach to setting resale prices in itself. In Bajaj, the ICC examined the market structure of fmCG products and, in particular, the hair oil segment in India and felt that it was dynamic and broad and that consumers had different options to choose from. Bajaj did not have the strong position in this sector, as other major players were also present in the market. Therefore, RPM agreements should not affect competition between brands. The ICC therefore did not impose a sanction because it did not determine AAEC on the basis of the factors listed in Section 19 (3) of the Act.