Irish Competiton Law
Irish Category Licence
The Competition Authority, now the Competition and Consumer Protection position, issued a category declaration in relation to vertical agreements and concerted practices in 2010. The declaration follows closely the equivalent 2010 EU block exemption regulation
Market Share
The declaration applies provided the market share held by the supplier does not exceed 30 percent of the relevant market on which it sells the contract goods or services and the market share held by the buyer does not exceed 30 percent of the relevant market on which it purchases the contract goods and services.
Prohibited Objectives
The declaration does not apply to vertical agreements which directly or indirectly, in isolation or in combination with other factors under the control of the party, have as their objective the restriction of the buyer’s ability to determine its sale price.
The agreement must not have as its objective, the restriction of the territory into which, or of the customers to whom, a buyer party of the agreement, without prejudice to the supplier’s ability to place restrictions on the buyer’s place of establishment, may sell the contract goods or services.
Disapplication
The declaration does not apply to vertical agreements, which directly or indirectly, in isolation or in combination with other factors under the control of the parties have as their objective;
- the restriction of active or passive sales to end users by the members of a selective distribution system at the retail level;
- the restriction of cross supplies between distributors within a selective distribution system, including those operating at different levels of trade;
- restrictions agreed between a supplier of components and a buyer who incorporates components, of the supplier’s ability to sell the components and spare parts to end users, repairers or the other service providers not entrusted by the buyer with the repair or servicing of its goods.
Commercial Agency
The EU Directive on commercial agency provides for the terms on which restrictions may be imposed on commercial agents following termination of the agency.
Approach of Commission
The Competition Authority / Commission take the view that vertical agreements may lead to an improvement in distribution because of concentration on sales activity without the need to maintain numerous business relations, with a large number of dealers. Accordingly, vertical restraints should not automatically be deemed anticompetitive.
Non-Exclusive Distribution
Non-exclusive distribution agreements do not allocate territory to the reseller. They do not, in general, prevent, restrict or distort competition. However, the Authority were of the view that certain types of clauses may contravene the Competition Act.
Potentially Justifiable Provisions
Some provisions which might breach the general prohibition, may be potentially permissible on the basis that they allow a fair share of the benefit to consumers.