CONSTITUTE AN ELEMENT OF COMPETITION WHICH IS IN CONFORMITY WITH ARTICLE 85 ( 1 ) OF THE TREATY .
THE LIMITATIONS INHERENT IN A SELECTIVE DISTRIBUTION SYSTEM ARE HOWEVER ACCEPTABLE ONLY ON CONDITION THAT THEIR AIM IS IN FACT AN IMPROVEMENT IN COMPETITION IN THE SENSE ABOVE MENTIONED . OTHERWISE THEY WOULD HAVE NO JUSTIFICATION INASMUCH AS THEIR SOLE EFFECT WOULD BE TO REDUCE PRICE COMPETITION .
5.SELECTIVE DISTRIBUTION SYSTEMS CONSTITUTE ONE OF A NUMBER OF ASPECTS OF COMPETITION IN CONFORMITY WITH ARTICLE 85 ( 1 ) OF THE TREATY PROVIDED THAT RESELLERS ARE CHOSEN ON THE BASIS OF OBJECTIVE CRITERIA OF A QUALITATIVE NATURE RELATING TO THE TECHNICAL QUALIFICATIONS OF THE RESELLER AND HIS STAFF AND THE SUITABILITY OF HIS TRADING PREMISES AND THAT SUCH CONDITIONS ARE LAID DOWN UNIFORMLY FOR ALL POTENTIAL RESELLERS AND ARE NOT APPLIED IN A DISCRIMINATORY FASHION .
THE OPERATION OF A SELECTIVE DISTRIBUTION SYSTEM BASED ON CRITERIA OTHER THAN THOSE MENTIONED ABOVE CONSTITUTES AN INFRINGEMENT OF ARTICLE 85 ( 1 ). THE POSITION IS THE SAME WHERE A SYSTEM WHICH IS IN PRINCIPLE IN CONFORMITY WITH COMMUNITY LAW IS APPLIED IN PRACTICE IN A MANNER INCOMPATIBLE THEREWITH .
6.A REFUSAL BY A MANUFACTURER TO APPROVE DISTRIBUTORS WHO SATISFY THE QUALITATIVE CRITERIA OF HIS SYSTEM OF SELECTIVE DISTRIBUTION DOES NOT CONSTITUTE , ON THE PART OF THE UNDERTAKING , UNILATERAL CONDUCT EXEMPT AS SUCH FROM THE PROHIBITION CONTAINED IN ARTICLE 85 ( 1 ) OF THE TREATY . ON THE CONTRARY , SUCH AN ATTITUDE FORMS PART OF THE CONTRACTUAL RELATIONS BETWEEN THE UNDERTAKING AND RESELLERS , SINCE THE ADMISSION OF A DISTRIBUTOR IS BASED ON THE ACCEPTANCE , TACIT OR EXPRESS , BY THE CONTRACTING PARTIES OF THE POLICY PURSUED BY THE UNDERTAKING , WHICH REQUIRES INTER ALIA THE EXCLUSION FROM THE NETWORK OF DISTRIBUTORS WHO ARE QUALIFIED FOR ADMISSION BUT ARE NOT PREPARED TO ADHERE TO THAT POLICY .
7.A RESTRICTION OF PRICE COMPETITION , WHICH IS INHERENT IN ANY SELECTIVE DISTRIBUTION SYSTEM , IS LAWFUL ONLY TO THE EXTENT TO WHICH THE MAINTENANCE OF A CERTAIN LEVEL OF PRICES IS STRICTLY JUSTIFIED BY THE REQUIREMENTS OF A SYSTEM WITHIN WHICH COMPETITION MUST CONTINUE TO PERFORM THE FUNCTION ASSIGNED TO IT BY THE TREATY , SINCE THE OBJECT OF SUCH A SYSTEM IS SOLELY THE IMPROVEMENT OF COMPETITION IN SO FAR AS IT RELATES TO FACTORS OTHER THAN PRICES AND NOT THE GUARANTEE OF A HIGH PROFIT MARGIN FOR APPROVED RESELLERS .
A MANUFACTURER OPERATING A SYSTEM OF SELECTIVE DISTRIBUTION IS THEREFORE NOT JUSTIFIED IN TAKING THE VIEW THAT THE ACCEPTANCE OF A COMMITMENT TO CHARGE PRICES MAKING POSSIBLE A SUFFICIENTLY HIGH PROFIT MARGIN CONSTITUTES A LAWFUL CONDITION FOR ADMISSION TO A SELECTIVE DISTRIBUTION SYSTEM . BY THE VERY FACT THAT HE IS AUTHORIZED NOT TO ADMIT TO AND NOT TO KEEP IN HIS DISTRIBUTION NETWORK TRADERS WHO WERE NOT , OR ARE NO LONGER , IN A POSITION TO PROVIDE SERVICES TYPICAL OF THE SPECIALIST TRADE , HE HAS AT HIS