Glossary of competition terms

This Glossary is based on definitions from DG COMP’s Glossary of terms used in EU competition policy (© European Union, 2002) and the OECD’s Glossary of industrial organisation economics and competition law (© OECD, 1993). Each term is enriched with references of national case laws from the e-Competitions Bulletin and Concurrences Review.

Vertical restraints (or restrictions)

Refers to certain types of practices by manufacturers or suppliers relating to the resale of their products. The usual practices adopted in this regard are resale price maintenance (RPM), exclusive dealing and exclusive territory or geographic market restrictions. Under exclusive dealing and/or exclusive territory, a single distributor is the only one who obtains the rights from a manufacturer to market the product. A significant debate exists in the economic literature as to whether this confers monopoly power on the distributor. Usually, the distributor’s market power is limited by inter-brand competition. The manufacturer’s purpose is normally to provide incentives to the distributor to promote the product and provide better service to customers.

© OECD

See also Resale Price Maintenance

Glossary