European Parliament legislative resolution on the draft guidelines on vertical restraints (C5-0009/2000 - 2000/2003 (COS))
Date: 2000-05-03
Institutions: Committee on Economic and Monetary Affairs, European Parliament
Subjects: competition law, competition policy, control of restrictive practices, vertical agreement

7.2.2001

EN

Official Journal of the European Communities

C 41/19

Wednesday 3 May 2000

F. whereas all food aid should be distributed through NGOs to make sure it reaches the starving popula-

tion,

G. whereas Ethiopia has been involved in a bloody border conflict with Eritrea since May 1998 which is

diverting scarce resources for relief and development to the military effort,

H. whereas the humanitarian aid needs of the Horn of Africa region are immense, ranging from food,

drinking water and drugs to vaccines for children with a view to preventing epidemics,

Urges the European Union, the Member States and international bodies to respond to the region’s

1.
calls for aid immediately, particularly as regards food and health requirements;

2.
Urges the governments of Ethiopia and Eritrea to take every possible step to resolve the conflict,
under the auspices of the OAU, and, at the same time, to halt all military activity so that they can use
their logistical capacities and human resources to provide practical and immediate assistance to their peo-
ples;

3.
Calls on the Commission to monitor carefully the food requirements of the populations at risk and to
coordinate closely food shipments and delivery with the other donors in order to avoid congestion of ports
and access roads;

4.
Calls on all governments in the Horn of Africa, in particular those of Ethiopia and Eritrea, to coop-
erate fully in the transport and delivery of food aid, in particular by allowing deliveries through all the
ports in the region;

Calls on the Commission, the Member States and international organisations to make provision for
5.
financial aid which goes beyond the emergency humanitarian aid phase and is intended to help farmers
regenerate their land and purchase livestock;

Calls on the Commission to implement, once the emergency is over, a comprehensive policy to
6.
strengthen food security in the region, in particular by increasing self-reliance based on local production
and purchases;

Calls on the governments in the region, and particularly the Ethiopian Government, to implement a
7.
policy of sustainable development in the agricultural sector with a view to enabling farmers to invest in
their land and meet their own needs;

Calls on the Commission and the Council to improve the early warning system to monitor sensitive

8.
regions where famine may arise, in order to allow earlier action and to prevent disasters occurring;

Instructs its President to forward this resolution to the Commission, the Council, the governments of

9.
the Member States, the governments of Ethiopia and Eritrea and the IGAD.

4. Vertical restraints

A5-0077/2000

European Parliament legislative resolution on the draft guidelines on vertical restraints (C5-0009/
2000 " 2000/2003 (COS))

The European Parliament,

4 having regard to the communication pursuant to Article 5 of Council Regulation 19/65/EEC of
2 March 1965 on application of Article 81(3) of the Treaty to certain categories of agreements and
concerted practices and Guidelines on Vertical Restraints (1) (C5-0009/2000),

(1) OJ C 270, 24.9.1999, pp. 7 and 12.

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4 having regard to its resolution of 18 July 1997 on the Commission’s Green Paper on vertical restraints

in EC competition policy (1),

4 having regard to its opinions of 15 April 1999 on the proposal for a Council Regulation amending
Regulation No 19/65/EEC on the application of Article 85(3) of the Treaty to certain categories of
agreements and concerted practices and on the proposal for a Council Regulation (EC) amending
Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty (2),

4 having regard to its resolution of 18 January 2000 on the Commission White Paper on modernisation
of the rules implementing Articles 85 and 86 of the EC Treaty (COM(1999) 101 4 C5-0105/1999) (3),

4 having regard to the Commission’s 1962 communication on exclusive representation contracts con-

cluded with trade representatives (4),

4 having regard to Commission Regulation (EC) No 2790/1999 of 22 December 1999 on the applica-
tion of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices (5),

4 having regard to Rule 47(1) of its Rules of Procedure,

4 having regard to the report of its Committee on Economic and Monetary Affairs (A5-0077/2000),

A. whereas the guidelines, hereinafter referred to as ‘the Guidelines’, are a document in which the Com-
mission sets out its policy on the application of Article 81 to vertical agreements in the light of the
altered legal framework,

B. whereas a formal opinion from the European Parliament is not called for at this stage because the
legislative procedure has already been completed, but whereas the Commission has made it known
that it would value Parliament’s view on the matter,

C. whereas the European Parliament has also informed the Commission of its opinion on the draft Block
Exemption regulation on the application of Article 81(3) of the Treaty to categories of agreements and
concerted practices (6), by means of a letter to Commissioner Monti (7),

D. whereas the fundamental policy decisions have already been made and are, inter alia, enshrined in the

new Block Exemptions regulation,

E. whereas Parliament is obliged to confine itself to comments on the substance and wording of the

Guidelines,

F. whereas the Commission’s competition policy in the field of vertical agreements seeks on the one
hand to protect competition, thereby contributing to the welfare of the consumer and the efficient
allocation of resources, and on the other hand to promote the integration of the market with the
underlying aim of preventing firms from setting up further individual obstacles between Member
States now that obstacles imposed by the authorities have successfully been removed,

G. whereas the new Commission Guidelines on vertical restraints, in which economic analysis and recog-
nition of the power of the market occupy pride of place, mark a substantial change from the formally
more coherent earlier system and whereas means should consequently be devised to prevent legal
certainty from being undermined,

H. whereas the Commission’s Guidelines refer solely to vertical agreements concerning the production or

distribution chains for goods or services,

(1) OJ C 286, 22.9.1997, p. 347.
(2) OJ C 219, 30.7.1999, p. 422.
(3) Texts Adopted of that sitting, Item 9.
(4) OJ B 139, 24.12.1962, p. 2 921.
(5) OJ L 336, 29.12.1999, p. 21.
(6) OJ C 270, 24.9.1999, p. 7.
(7) Letter from the chairman of the Committee on Economic and Monetary Affairs, and from your rapporteur,
to Commissioner Monti on the draft Block Exemptions Regulation on the application of Article 81(3) of the
EC Treaty to categories of vertical agreements and concerted practices, PE 229.816.

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1. Welcomes the Commission’s initiative of publishing Guidelines on the application of Article 82,
because businesses are thus provided with an instrument enabling them to assess their vertical agreements
with a view to the way in which the Commission proposes to implement the policy;

Wednesday 3 May 2000

Notes, however, that it would be possible for businesses to make this assessment still more effective if

2.
the Guidelines contained references to earlier administrative decisions and constant case law;

3.
Fundamentally welcomes the Commission’s new policy on vertical restraints because they introduce
economic analysis and recognition of the power of the market as essential reference points to be used to
gauge the impact of distribution agreements in terms of competition;

4. Maintains, given the change of policy, that means should be devised to preserve legal certainty,
including the Commission Guidelines, which set out the Commission’s attitude;

Considers that the Guidelines are generally clear and unambiguous, but asks the Commission never-

5.
theless to take into account the following observations:

(a) With regard to the limited duration of vertical agreements containing a non-compete clause, para-
graph 147 of the Guidelines should contain more interpretation and concrete examples of cases in
which the supplier makes significant investments to the benefit of the purchaser. In such cases 4
as the Commission itself acknowledges in paragraph 108(2) and paragraph 147 4 it is justifiable for
the duration of non-compete agreement to be coterminous with that of the depreciation of the invest-
ments;

(b)

(c)

(d)

In paragraph 25 of the Guidelines it should be made clear what is meant by potentially competing
undertakings. This provision creates uncertainty among undertakings, particularly since they are not
always in a position to judge who their potential competitors are. Concrete examples would clarify
matters;

In part 2 of the Guidelines, concerning agency agreements (paragraphs 12-21), attention should be
paid to the actual current economic situation, which is that an agent, in order to implement the
agreement properly, does have to bear a certain financial or economic risk, such as a contribution to
publicity costs; that being so, it would be desirable for the Commission to review paragraph 17 of the
Guidelines; Paragraph 17 of the Guidelines should at least stipulate that a small contribution to pub-
licity costs, by an agent, should have no bearing on the fact that the agreement lies outside the scope
of Article 81(1);

In paragraph 20 of the Guidelines, the Commission discusses how it will evaluate exclusive agency
agreements. In so doing the Commission disregards the fact that most agency agreements contain
exclusivity clauses, which do not result in foreclosure on the market. This should be made clearer in
paragraph 20. The Commission should also examine how it will monitor the possible anti-competitive
effect of such clauses. In the interest of legal certainty for undertakings, this needs to be gone into in
more detail; for the purposes of evaluating exclusivity clauses in agency agreements, the Commission
should state that cases would not be pursued unless, on the market to which the agency agreements
applied, an operator entering that market were denied the possibility of finding agents to sell its pro-
ducts;

(e)

In paragraph 27 and the footnote thereto, the Commission discusses the conditions whereby vertical
agreements entered into between an association of retailers and its members or its supplier are cov-
ered by the scope of the agreement. It would be a good idea for the Commission also to make it clear
in the Guidelines that,
if only a limited number of retailers has a turnover slightly exceeding
€ 50 million, the general evaluation pursuant to Article 81 will not normally differ from instances
where all members respect the turnover ceiling.

(f)

Paragraph 40 refers to particular habitual practices of suppliers designed to restrict resales (use of
differentiated labels or serial numbers). Specific action should be taken in respect of these practices,
since they are not only inimical to competition, but are regularly used to block parallel imports in
order to create watertight national markets;

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(g) Paragraph 49 should specify the cases in which a non-compete clause may remain valid for more than
five years, ruling out cases where suppliers resort to bogus transactions (establishing surface rights,
usufruct, sale to the distributor with a buy-back agreement, and so forth) to extend the life of a con-
tract and foreclose the market;

(h) Referring to markets for spare parts, paragraph 84 states that the relevant market for the purposes of
the BE is the market for the original equipment, ‘without prejudice to Article 82’. It is necessary to
specify the cases in which the market for a make’s spare parts constitutes a distinct market (as defined
in the Hugin ruling) and Article 82 should consequently apply and those in which the market for the
original equipment should be deemed the relevant market. At all events, the above paragraph should
be considered in conjunction with paragraph 38(e);

Calls on the Commission to evaluate the application of the Guidelines over time and where appro-

6.
priate to adjust them;

7.
Calls on the Commission to carry out this evaluation within four years, and urges it to notify Parlia-
ment of the results, together with any proposed amendment of the guidelines, Parliament, and to publish
them in the Official Journal of the European Communities;

Considers it at any rate appropriate that the Commission, should it depart for whatever reason from

8.
its policy set out in these Guidelines, should issue a communication to notify businesses of this;

Instructs its President to forward this resolution to the Commission and Council and to the national

9.
parliaments.