Franchising is interesting from a competition law point of view because it involves co-ordination between independent undertakings on many aspects of strategic business behaviour, yet it is generally seen as pro-competitive. Franchising systems can have characteristics of different forms of distribution (with selective or exclusive elements) and typically adhere to the principle of (...)
Franchising
Dominance
The US FTC asks for comments on the current environment for franchisors exerting control over franchisees and workers
FTC Seeks Public Comment on Franchisors Exerting Control Over Franchisees and Workers*
Public urged to provide input on franchise agreements and franchisor business practices
The Federal Trade Commission requests comment on franchise agreements and franchisor business practices, including (...)
The Icelandic Competition Authority publishes opinion on the operational and competitive conditions at airports
ICA directs recommendations to authorities regarding Isavia and the competitive environment at Keflavik Airport*
The Icelandic Competition Authority (ICA) has published an opinion concerning the operational environment of Isavia ohf. and competitive conditions at Keflavik International (...)
The Japanese FTC publishes a market research report on transactions between franchisers and franchisees
On September 2, 2020, the JFTC published a market research report (“Report”) on transactions between the headquarters of convenience stores (i.e., franchisers) and their franchisees. Previously, the JFTC conducted a similar market research in 2011. The Report indicates some situations that (...)
The Albanian Administrative Court of First Instance in Tirana ascertains the abuse of the dominant position by the national football federation (Albanian Football Federation)
Republic of Albania Competition Authority*
The Competition Authority informs that: Today on 21.09.2020, the Administrative Court of First Instance in Tirana decided:
To uphold the Competition’s Commission Decision no. 693, dated 14.05.2020 "To ascertain the abuse of the dominant position (...)
The Australian Competition Authority accepts a physiotherapy company’s commitment to remove alleged unfair contract terms from its franchisee agreements (Back In Motion Physiotherapy)
Back In Motion Physiotherapy to remove alleged unfair contract terms for franchisees*
The ACCC has accepted a court-enforceable undertaking by Back In Motion Physiotherapy Pty Ltd to remove certain terms from its franchisees agreements which it admits may be unfair.
Under a restraint of (...)
The Indian Competition Authority reinstates fine against the national governing body for cricket for abuse of dominance and granting of exclusive licenses (Board of Control for Cricket in India)
CCI re- imposes penalty of INR 52.24 crores on BCCI for abuse of dominance*
The Competition Commission of India (“Commission/CCI”) vide its Order dated November 29, 2017 has re-imposed the penalty of INR 52.24 Crores on the Board of Control for Cricket in India (“BCCI”) after fresh inquiry (...)
The Portuguese Competition Authority renders legally binding the commitments offered by a food retailer (Dia)
The PCA adopts a decision which renders legally binding the commitments offered by Dia Portugal related to Minipreço franchise*
The Portuguese Competition Authority (PCA) adopted a decision which renders legally binding the commitments offered by Dia Portugal Supermercados, Sociedade (...)
The Indian Competition Authority dismisses allegations of abuse of dominance against petroleum refiner due to absence of market dominance (AnjaniSut Fuel / Reliance Industries)
CCI closes two cases against Reliance Industries Limited*
CCI by its order dated November 17, 2015 ordered dismissed allegations of violation of Section 4 of the Act, in an information filed by AnjaniSut Fuel (Informant) against Reliance Industries Ltd.(RIL)
In order to obtain the (...)
The Indian Competition Authority dismisses allegations of anticompetitive conduct and abuse of dominance against a fast food restaurant chain in the market for franchisee services (Doctor’s Associates / Subway International / Subway Systems India)
CCI dismisses case against Doctor’s Associates Inc, Subway International, Subway Systems India Private Limited alleging abuse of dominance and anti-competitive activities*
CCI vide its order dated May 13, 2015 exonerated Doctor’s Associates Inc (DA), Subway International (SI), Subway Systems (...)
The Australian Federal Government proposes to extend consumer protections against unfair contract terms to some small business contracts
Extension of unfair contract terms protection to small businesses - Many franchise agreements likely to be caught*
The Federal Government has released an exposure draft of proposed legislation that would extend consumer protections against unfair contract terms to small business contracts (...)
The US Northern District of California dismisses a federal antitrust claim brought against automobile manufacturer by a franchise car dealer for failing to prove facts concerning an alleged tying between the rental agreement and the volume of cars sold (Matthew Enterprise / Chrysler)
Northern District of California Addresses Functional Discounts, Price Discrimination Claims*
In Mathew Enterprise, Inc. v. Chrysler Group, LLC, 2014 U.S. Dist. LEXIS 95522 (N.D. Cal. July 11, 2014) (Freeman, J.), the court dismissed certain Robinson-Patman Act price discrimination claims and (...)
The French Competition Authority dismisses abuse of dominance case concerning a pre-emptive right provided in an affiliation agreement (Altimat / Sapec / Weldom)
By a decision (hereinafter the ‘Decision’) dated 29 October 2013, the French Competition Authority (hereinafter the ‘FCA’) rejected a complaint submitted in January 2011 by the company Altimat (hereinafter the ‘Complainant’) alleging abusive exercise of a pre-emptive right by the companies (...)
The Cypriot Competition Authority concludes that the termination of a franchise agreement in a reasonable delay does not constitute an abuse of economic dependence (Bacenco / Orchestra-Premaman)
The case arises out of a complaint filed by Bacenco Ltd against Orchestra-Premaman for the alleged infringement of the Protection of Competition Law 13(I)/2008 (“Law”); concerning the termination of the sub-franchise agreement between Bacenco Ltd and Orchestra-Premaman.
Bacenco was an (...)
The Tokyo High Court recognizes that providing advice or guidance to franchisees to sell products at “recommended price” is indeed an abuse of a superior bargaining position (SEJ)
I. Introduction
A private party is entitled to file an Article 25 suit against a party that has committed a certain act in violation of AMA, including but not limited to unfair trade practice by abusing of superior bargaining position, on condition that there is a final and binding (...)
The French Competition Authority renders legally binding commitments offered by leading retailer to remedy competition concerns on the retail distribution sector (Carrefour Market)
The Autorité de la concurrence makes commitments proposed by Carrefour concerning a Parisian supermarket franchised under the Champion name binding. Carrefour commits to adapt the standard Carrefour Market franchise agreement with regards this supermarket*.
Following a complaint filed in (...)
The Japanese FTC finds the prevention by a franchisor of discount sales of fresh foods and beverages by franchisees to be an abuse of a superior bargaining position (Seven-Eleven Japan)
I. Introduction
On 22 June 2009, the Japan Fair Trade Commission (“JFTC”) found that Seven-Eleven Japan Co., Ltd. (“SEJ”) abused its superior bargaining position in violation of Article 19 of the Antimonopoly Act (“AMA”) by forcing some of its franchisees to stop discount sales of fresh (...)
The Japanese FTC issues a cease and desist order against a franchising business company for having abused its dominant bargaining position (Seven-Eleven)
Cease and Desist Order against Seven-Eleven Japan Co．， Ltd.*
The Japan Fair Trade Commission (JFTC)investigated Seven-Eleven Japan Co., Ltd. (hereinafter referred to as Seven-Eleven Japan) in accordance with the provision of the Antimonopoly Act and found that Seven-Eleven Japan was in (...)
The US Court of Appeals for the Sixth Circuit affirms the decision of the lower court allowing a summary judgment on all claims including the exclusion of competition from the market for gasoline (Partner / ExxonMobil Oil)
PMPA Franchise Agreement Disavowing Plaintiff’s Claim to an Exclusive Market and Geographic Territory Trumps Alleged Oral Commitment*
Partner v. ExxonMobil Oil Corp., 08-1590 (6th Cir. May 4, 2009)
In 2000, plaintiff Partner & Partner, Inc. entered into a lease/franchise agreement with (...)
The German Federal Court of Justice holds that discrimination between own stores and franchisees is not abusive (Praktiker)
Background
Praktiker, one of the leading DIY groups in Germany and Europe, pursues a dual distribution strategy via company owned stores and (few) franchises. The franchise contracts foresaw an exclusive sourcing obligation pursuant to which the franchisees had to source their entire demand (...)
The German Competition Authority holds that franchisees must benefit from central sourcing (Praktiker)
The German Bundeskartellamt rendered a significant decision on the obligation of franchisors to share purchasing advantages with franchisees the 8th May 2006.
Praktiker is a leading German DIY-store chain. While the majority of Praktiker chain stores are owned by Praktiker, a small number of (...)
Mergers
The Belgian Brussels Court of Appeal rejects a supermarket’s request to suspend a merger between two of its rivals due to gun jumping (Carrefour / Intermarché / Mestdagh)
Introduction
On 23 December 2022, the Brussels Court of Appeal (the Market Court) rejected Carrefour Belgium’s application for the suspension of the Belgian Competition Authority’s (BCA’s) decision of 9 November 2022, which authorised the concentration between Intermarché AB (ITM) and (...)
The UK Competition and Markets Authority spurs an undertaking specialized in rail services to offer merger remedies in order to resolve competition concerns and to avoid an in-depth merger investigation (ICRL)
Stagecoach/Virgin consortium given chance to resolve limited competition concerns arising from the East Coast rail franchise award*
ICRL, a subsidiary jointly owned by Stagecoach and Virgin Trains, has the chance to avoid an in-depth merger investigation into its successful bid to run the (...)
The Swedish Competition Authority furthers an application for a prohibition order against the acquisition of the franchisors of the two largest national real estate chains (Swedbank Franchise / Svensk Fastighetsförmedling)
The Swedish Competition Authority is going to court to stop the real estate concentration*
The Competition Authority is going to court to prohibit Swedbank Franchise from acquiring Svensk Fastighetsförmedling. The deal would significantly impede competition on a large number of local (...)
The French Competition Authority conditionally clears an acquisition of sole control on the luxury perfumes and cosmetics market (Nocibé / Advent)
Press Release published on the official website of the French Competition Authority.
The Autorité de la concurrence clears the acquisition of sole control of Nocibé by Advent (Douglas) subject to the divestment of 38 sales outlets by the new entity. These commitments will provide consumers (...)
The Latvian Competition Council concludes a sector inquiry into the market of fuel franchise agreements ( Statoil / Neste / Lukoil)
The Competition Council Assessed an Influence of Franchise Agreements to the Competition into the Fuel Market*
The Competition Council (CC) of Latvia concluded a sector inquiry into the market of fuel franchise agreements. The aim of the sector inquiry was to obtain the information on (...)
The Australian Government proposes reform of the national competition regime including an extension of the unfair terms protection to small business and a review of the formal merger assessment process
This article was originally published on In Competition by King & Wood Mallesons (click here).
Coalition to uproot competition laws?*
With the votes counted and Tony Abbott safely claiming a Coalition victory on 7 September 2013, it’s not only the government that is getting a (...)
The Hungarian Competition Authority approves 13 acquisitions of control concerning 158 food retail stores across the country (Match, Profi and Cora)
Information about mergers on the food retail market*
Substantial ownership shifts took place in the food retail market in Hungary between June 2012 and February 2013. During this period the GVH (Gazdasági Versenyhivatal - Hungarian Competition Authority) received 13 merger applications (...)
The French Competition Authority clears, subject to conditions, a merger in the sector of distribution of DIY, decoration and gardening items (Mr Bricolage / Passerelle)
Subject to several conditions, the Autorité de la concurrence authorizes the acquisition of the Passerelle group by Mr Bricolage.*
The Autorité de la concurrence has examined the acquisition of the Passerelle group by the Mr Bricolage group, both of which are active in the sector of the (...)
The French Competition Authority specifies under which conditions a merger is likely to affect competition in local markets and validates behavioural remedies due to the economic crisis (Caisse d’Epargne / Banque Populaire)
Since it was granted jurisdiction over mergers, the Competition Authority (hereafter “the Authority”) gave its first decision of approval with commitments on June 22, 2009. Even though it was a Phase I decision, the Authority performed a very thorough analysis of the operation’s impact, (...)
The UK Competition Authority clears subject to behavioral remedies an acquisition of a rail franchise by the leading supplier of bus travel (FirstGroup / ScotRail)
The operation
FirstGroup was the leading supplier of bus travel in the UK with four bus subsidiaries in Scotland. As at April 2004, it was also the operator of five passenger train operating companies. The Scottish rail franchise operated by ScotRail accounted for 95 per cent of railway (...)
The UK Office of Fair Trading clears the acquisition of a rail passenger services franchise by an existing operator of rail and bus services subject to behavioral remedies (Arriva / Wales and Borders rail franchise)
The operation
Arriva plc (“Arriva”) operates an extensive range of public transport services across the UK, including buses, trains and commuter coaches. Arriva Passenger Services Limited (“APS”) is the holding company for a number of bus subsidiaries, including companies which operate in (...)
The French Minister of Economy cleared a merger in the DIY products sector subject to termination of a franchise agreement (Mr Bricolage / Tabur)
The operation
Mr Bricolage acquired sole control of Tabur. Both parties were active in the distribution of DIY products, notably through integrated networks and franchises.
The market concerned
The market involved is the retail of DIY products through specialized superstores.
Remedy: (...)
The Dutch Competition Authority decides as a result of a planned merger and after an initial investigation that a dominant position could emerge or be strengthened on the market for the sale of daily consumer goods through supermarkets as a result of a planned merger (Schuitema / Sperwer)
NMa to Investigate Further the Merger of Schuitema and Sperwer*
The Dutch Competition Authority (NMa) today decided that a licence is required for the merger of the supermarket organisations Schuitema and Sperwer. After an initial investigation, NMa concluded provisionally that a position of (...)
The US FTC imposes the largest retail divestiture in its history, affecting multiple levels of the production chain, before clearing one of the largest mergers in the gasoline industry (Exxon / Mobil)
On November 30, 1999 after an extensive and in-depth investigation, the FTC announced that Exxon Corporation and Mobil Corporation agreed to enter into a consent decree, in which the FTC mandated significant structural changes to the corporations prior to approving their merger. The consent (...)
Procedures
The European Competition Network publishes report on competition law enforcement in the food sector
Continuing close scrutiny of the EU food sector – ECN report*
On May 24 2012, the European Competition Network (“ECN”) published a report on the competition law enforcement and market monitoring activities by the European competition authorities in the food sector.
The report is an (...)
Regulations
The Australian Competition Authority announces its first-class exemption ever aimed at fuel retailers to collectively negotiate with wholesalers
Class exemption will enable small businesses to collectively bargain*
An ACCC class exemption due to commence in early 2021 will allow small businesses, franchisees and fuel retailers to collectively negotiate with their suppliers and processors, franchisor or fuel wholesaler respectively, (...)
The Hong Kong Transport and Housing Bureau releases the fare adjustment mechanism applicable to the monopolist railway company (MTRCL)
The joint review of the Fare Adjustment Mechanism (“FAM”) of the MTR Corporation Company Limited (“MTRCL”), the only railway company in Hong Kong, by the Government of the Hong Kong Special Administrative Region (“HKSARG”) and MTRCL was completed. The outcome of the review was approved by the (...)
The French Competition Authority issues the results of a sector inquiry into networks of retail distributors and makes policy recommendations
France: The Autorité de la concurrence issues the Results of a Sector Inquiry into Networks of Retail Distributors and makes Policy Recommendations
On 7 December 2010, the Autorité de la concurrence adopted the final report of its sector inquiry into networks of retail distributors. On 25 (...)
The US Federal Energy Regulatory Commission supplements existing cross-subsidization restrictions and sets pricing standards for certain affiliate transactions
On February 21, 2008, FERC issued a Final Rule through Order No. 707 in which it supplements existing affiliate transaction rules and codifies restrictions on and pricing of affiliate transactions between franchised public utilities that have captive customers or own or provide transmission (...)
Anticompetitive practices
The US FTC files an amicus brief in support of employees challenging a fast food company’s intra-franchise no-poach rules (McDonald’s / Deslandes and others)
FTC Joins Justice Department in Amicus Brief Supporting Workers’ Challenge to McDonald’s “No Hire” Franchise Restrictions*
Brief argues that a provision in McDonald’s franchise agreement is per se illegal under U.S. antitrust law
The Federal Trade Commission joined the Department of (...)
The Italian Competition Authority finds that a fast-food giant abused the economic dependence of franchisees and imposes contractual obligations to remedy the situation (McDonald’s)
The case concerns the franchising activity carried out in Italy by McDonald’s Development Italy LLC (hereinafter MCDI). MCDI - is a U.S. company, with registered office in Wilmington and branch office in Milan, member of the McDonald’s Group (a U.S. company based in Oak Brook, Illinois). The (...)
The New Zealand Competition Authority declines clearance for agreements between a gym-owner and their franchisees which would have permitted the setting of price ceilings and floors (Anytime NZ)
Commission declines clearance for Anytime NZ Limited’s collaborative activity clearance application*
The Commerce Commission has declined to give clearance to Anytime NZ Limited (Anytime NZ) to enter into proposed agreements with its franchisees that would have contained or may have (...)
The New Zealand Competition Authority releases a Statement of Issues to a franchisor regarding proposed price agreements with franchisees (Anytime NZ)
Statement of Issues released for Anytime NZ Limited’s collaborative activity clearance application*
The Commerce Commission has published a Statement of Issues relating to the application by Anytime NZ Limited (Anytime NZ) for clearance under section 65A of the Commerce Act 1986 for proposed (...)
The French Competition Authority fines a sportswear company for resale price maintenance introduced through contractual clauses with its franchisees (Espace Foot)
The Autorité de la concurrence fines ESPACE FOOT for imposing the prices of the sporting goods sold in the stores on its franchisees*
Background
Following a report sent by the French Ministry of the Economy, the Autorité de la concurrence today fined ESPACE FOOT €25,000 for imposing on its (...)
The Italian Competition Authority investigates national fashion retailer for alleged abuse of economic dependence in franchising agreements (Benetton)
A543 - ICA: Benetton under investigation for an alleged abuse of economic dependence in franchising agreements*
According to the Authority, the group might have obliged its retailers to maintain a sales structure and a commercial organisation tailored to Benetton’s needs and such as to (...)
The EU Commission publishes a staff working document of the vertical block exemption regulation and does not plan to relax the resale price maintenance rule for franchises
In the last few years, franchising has become an increasingly popular distribution structure across the EU. A franchise is a vertical agreement, and therefore should not contain any of the hard-core restrictions set out in the VBER in order to benefit from the block exemption. Nonetheless, it (...)
The Turkish Competition Authority holds that no-poach clauses in a gym company’s franchising agreements violates against competition law (BFIT)
This case summary includes an analysis of Turkish Competition Board’s (the “Board”) BFIT preliminary investigation decision (07.02.2019, 19-06/64-27) in which the Board evaluated non-compete and no-poaching obligations imposed by Bfit Sağlık ve Spor Yatırım ve Tic. A.Ş. (“BFIT”) to its (...)
The Hellenic Competition Authority accepts remedies addressing competition concerns related to franchise agreements in the pizza market (Roma Pizza)
HCC has accepted commitments proposed by Roma Pizza S.A. to address competition concerns with regard to the terms of its franchise / distribution system following a complaint by former franchisees*
By its unanimous decision no. 639/2017, the Chamber of the Hellenic Competition Commission (...)
The Portuguese Competition Authority opens a market inquiry concerning the commitments proposed by a supermarket operator suspected of engaging in resale price maintenance (Dia)
DIA Portugal offers commitments to the PCA*
On 3 April 2014, the Portuguese Competition Authority (PCA) opened proceedings against DIA Portugal Supermercados, Sociedade Unipessoal, Lda. (DIA Portugal), for alleged infringement of national competition rules in the context of the Franchise (...)
The Danish Competition Appeals Tribunal upholds the Competition Authority’s decision which found a franchisor company guilty of price fixing and market sharing in the market for robotic milking systems (Lely Scandinavia / Danish Lely Centres)
The Danish Competition Appeal Tribunal: Agreement to Fix Prices and Share Markets in Robotic Milking Systems Sector was Illegal*
On 30 September 2015, the Danish Competition Appeals Tribunal has upheld a decision adopted by the Danish Competition Council (DCC) on 25 June 2014.
The DCC’s (...)
The Spanish Competition Authority fines 12 companies in the refrigerated road haulage market and their sectoral association for price fixing (Grupo Disfrimur, Grupo Trans Onuba)
The CNMC issues 8.8 million euros in fines to 12 refrigerated road haulage companies and their sectoral association*
The CNMC issues 8.8 million euros in fines to 12 refrigerated road haulage companies and their sectoral association. The sanctions were imposed following an infraction of (...)
The Hellenic Competition Commission imposes fines on an undertaking for implementing resale price maintenance practices and a restriction of cross-supplies between distributors/franchisees within its selective distribution network (Germanos)
The HCC imposes fines on GERMANOS for infringing EU and national competition rules in relation to its franchise network*
The HCC imposes fines on GERMANOS for infringing EU and national competition rules in relation to its franchise network Following an extensive investigation, the Hellenic (...)
The Polish Competition Authority upholds the NCA’s decision regarding price fixing within a restaurant franchising network (Sfinx)
The court of the Competition and Consumers Protection (the Court) upheld the decision of 25 June 2013 of the President of the Polish Office of Competition and Consumers Protection (NCA) stating that Sfinx Polska SA (Sfinx) infringed the art. 6 (1) (1) of the Polish Act on competition and (...)
The Hungarian Competition Authority initiates a competition supervision proceeding following its unannounced inspection held at the seats of two realtors (Duna House / Otthon Centrum)
The GVH commenced proceeding because of suspected cartel*
On 3 July 2014 the Gazdasági Versenyhivatal (GVH – Hungarian Competition Authority) launched a competition supervision procedure against DUNA HOUSE FRANCHISE Kft. (Real Estate Agency) and Otthon Centrum Franchising Tanácsadó Kft. (...)
The Danish Competition Authority orders an end to passive sales, price fixing and market sharing infringements on the market for robotic milking systems and the adjacent markets (Lely Scandinavia / Danish Lely Centres)
Franchise chain has fixed selling prices and shared markets of supply with respect to milking robots*
On 25 June 2014, the Danish Competition Council (DCC) ruled in a case concerning anticompetitive behavior regarding the market for milking systems, the market for repair and maintenance of (...)
A US District Court receives a complaint of anticompetitive agreements to exclude the plaintiff from the market for ownership of professional basketball franchises (Donald Sterling / NBA)
Basketball, Surreptitious Recordings, and Antitrust*
Donald Sterling — yes, that Donald Sterling — filed an antitrust lawsuit a few days ago against the National Basketball Association. You can download a copy here: Sterling Antitrust Complaint.
It’s not clear if the complaint has now been (...)
The Australian Competition Authority launches its twice-yearly report providing a summary of activities in the small business and franchising sectors and updates on industry codes
Big spike in small business contacts to competition regulator*
The Australian Competition and Consumer Commission has launched the latest Small Business in Focus Report which outlines its work in the sector.
ACCC Deputy Chair Dr Michael Schaper said that the report highlights the ongoing (...)
The Australian Competition and Consumer Commission proposes the re-authorisation of a professional conduct regime (RCSA)
ACCC proposes to grant authorisation to the Recruitment and Consulting Services Association’s Professional Conduct Regime*
The Australian Competition and Consumer Commission has issued a draft determination proposing to re-authorise the Recruitment and Consulting Services Association’s (...)
The Australian Competition and Consumer Commission grants interim authorization to a dealer group active in the stationary and office supply to collectively bargain with its suppliers (Office Choice)
ACCC grants interim approval to Office Choice members and franchises*
“The Australian Competition and Consumer Commission” has granted interim authorisation to Office Choice Limited, Office Brands Limited, Office Products Depot Limited, and the members and franchisees of these companies (...)
The Portuguese Supreme Court declares a non-compete clause in a franchise agreement invalid due to absence of transference of confidential information justifying protection of know-how (Montijo)
In a dispute concerning an infringement of a franchising agreement in the food services industry, including an alleged violation of a non-compete clause, the Portuguese Supreme Court reversed a ruling of the Lisbon Appeal Court, providing clarifications on its view on the validity of such (...)
The Australian Federal Court establishes that a defendant has been directly knowingly involved in an anti-competitive arrangement and imposes criminal sanctions (Chaste Corporation)
Peter Foster sentenced for contempt of court*
The Federal Court has sentenced Peter Foster to three years imprisonment, with 18 months to be served and 18 months suspended, for contempt of court.
Justice Logan also placed conditions on Mr Foster’s involvement in the weight loss, cosmetic (...)
The Polish Competition Authority imposes fines on a franchisor for practising fixed and minimum prices of goods on its trading partners (Sfinks Polska)
Franchise networks under siege from the Polish competition authority over alleged RPM arrangements*
In its decision of 25 June 2013, the Polish competition authority has fined Sfinks Polska the amount of PLN 464,228.92 (approximately €107,000) for imposing fixed resale prices on its (...)
The Polish Competition Authority reminds franchisors that resale price maintenance is a hardcore violation of competition law (Sfinks Polska)
In its unprecedented decision of 25 June 2013 in Sfinks Polska, the President of the Polish competition authority (Prezes Urzędu Ochrony Konkurencji i Konsumentów, the UOKiK), established a list of competition law “don’ts” in franchise agreements. While the UOKiK’s jurisprudence in relation to (...)
The Paris Court of Appeal finds that non-compete clause in supermarket franchise agreement is anti-competitive (Prodim)
On 6 March 2013, the Paris Court of Appeal ruled that a non-compete clause in a franchise agreement in the food distribution sector infringed competition law, as it was neither necessary nor proportionate for the purpose of protecting the franchisor’s know-how and the reputation of the (...)
The South Korean FTC finds that the territorial restraints clauses contained in the distribution agreements of a liquor manufacturer are illegal since they suppress intra-brand competition among the wholesale distributors (Kook Soon Dang)
I. Introduction
Vertical restraints are largely scrutinized under a less strict standard of review as compared to horizontal restraints – especially in relation to naked price-fixing or market division. Since the US Supreme Court held in the watershed decision of 1977, Continental TV v. GTE (...)
The EU Court of Justice hands down preliminary ruling on post-term non-compete obligation in franchise agreement (La Retoucherie)
On 7 February 2013, the Court of Justice of the European Union (“ECJ”) handed down its ruling in response to a preliminary reference from a Spanish court that had questioned the meaning of the phrase “premises and land from which the buyer has operated during the contract period” in (...)
The French Competition Authority makes binding the commitments proposed by a leading retailer concerning its franchise agreement (Carrefour / Carrefour market)
On 16 December 2011, the French Competition Authority made binding the commitments proposed by Carrefour concerning its Carrefour Market franchise agreement. In August 2010, Marcadet (a Carrefour franchisee) complained to the French Competition Authority concerning certain commercial (...)
The Croatian Competition Authority grants an individual exemption in relation to non-compete obligation contained in a settlement agreement (Intereuropa sajam međunarodno otpremništvo / UPS Worldwide Forwarding)
On 16 December 2010 the Croatian Competition Authority (AZTN) granted an individual exemption in relation to a non-compete obligation contained in a settlement agreement between international courier services providers Intereuropa sajam međunarodno otpremništvo d.o.o.(Intereuropa) and UPS (...)
The Greek Competition Authority imposes fine of € 12.5 M for resale price maintenance in the supermarket sector (Carrefour)
According to a press release of 15 July 2010, the Greek Competition Authority has imposed a fine of € 12.5 million on Carrefour Marinopoulos (“Carrefour”) for engaging, inter alia, in resale price maintenance with its supermarket franchisees in breach of Greek and EU competition law. In (...)
The English High Court upholds post-term non-compete obligation in franchise agreement (Pirtek / Joinplace)
On 7 July 2010, the English High Court upheld a claim brought by a franchisor against a former franchisee based on a post-term non-compete obligation, finding that the obligation did not infringe the equivalent provision to Article 101 TFEU under English law.
The case arose from a franchise (...)
The Hellenic Competition Authority fines a supermarket chain for restrictive practices in its franchise network (Carrefour Marinopoulos)
Greece: Carrefour fined for Restrictive Practices in Greek Franchise Network
On 6 July 2010, the Hellenic Competition Commission (HCC) has levied a fine of € 12,500,000 on Carrefour’s Greek business (Carrefour Marinopoulos S.A.) for applying resale-price maintenance among its franchise (...)
The Hellenic Competition Commission fines a retailer for resale price maintenance and other infringements within its franchise network (Carrefour Marinopoulos)
On 6th April 2010, the Hellenic Competition Commission (“Epitropi Antagonismou”, hereinafter: “HCC”) issued a decision on the merits by which it imposed a fine on the retailer Carrefour Marinopoulos S.A. (hereinafter: “Carrefour”) for infringements detected within its franchise network, namely (...)
The French Competition Authority validates a franchise network in the car wash sector (Hypromat France)
On 15 April 2010, the French Competition Authority dismissed a complaint lodged by several franchisees and former franchisees (the “complainants”) against their franchisor, Hypromat France SAS (“Hypromat”), concerning alleged infringements of Articles 101 and 102 TFEU (ex-Articles 81 and 82 (...)
The French Competition Authority issues two opinions on questions involving mass retail distribution which may hinder the functioning of competition in this sector
On 25 February and 19 March 2010, the French Competition Authority decided on its own initiative, to make a reference to issue two opinions in the mass retail distribution sector, in order to ensure that the functioning of competition in this sector is not hindered.
The French NCA’s power to (...)
The Danish Competition Authority adopts a commitment decision lifting a ban on reporting of sales prices and contribution margins (Bestseller)
On 24 March 2010, the Danish Competition Council adopted a commitment decision, cf. section 16 a of the Danish Competition Act, allowing Bestseller A/S to regain access to price information from its franchise partners - irrespective of a previous injunction issued by the Competition Council in (...)
The Dutch Supreme Court annuls a judgment of the Court of Appeal for error in market definition and lack of analysis of the franchise agreement’s restrictive object in the light of its context (Prisma Vastgoed, Prisma Food Retail / Verweerders)
In 1989, Prisma rented out a supermarket to the defendant. The rental agreement provided for an option to purchase the supermarket in favour of the defendant, which could be exercised on 30 April 2001. This agreement further provided that in case the defendant purchased the supermarket, it (...)
The Turkish Competition Authority investigates price-fixing and non-compete provisions in franchising agreements (DiaSA / Complaining Franchisees)
Two complaints were lodged against DiaSA by its franchisees alleging that the provisions and application of DiaSA’s franchise agreements are in violation of the Act on Protection of Competition Numbered 4054 (“Competition Act”).
The Competition Board (“CB”) examined the price and non-compete (...)
The Dutch Court of First Instance of Arnhem holds, in interlocutory proceedings, that a non-compete clause concluded in a franchise agreement, which was not exempted under the vertical agreements and concerted practices Regulation is enforceable (Bruna)
In March 1999, a franchise agreement was concluded for a period of five years between Bruna, the franchisor, and the defendant in this case, the franchisee. After renewal in 2004, this agreement was prolonged until 1 August 2009. The defendant was given the right to use the Bruna system for (...)
The French Competition Authority issues an opinion on the EU Regulation 2790/99 and the guidelines on vertical restraints
Press Release published on the official website of the French Competition Authority.
The Autorité de la concurrence welcomes the modernization undertaken by the European Commission and recommends that the Commission better explains the balance it intends to guarantee between online trade (...)
The UK Competition Commission publishes the conclusions of its rolling stock leasing market investigation (Rolling Stock Leasing Market Investigation)
1. Introduction and background
In April 2007 the Office of the Rail Regulator made a reference under section 130 of the Enterprise Act 2002 to the Competition Commission (CC) requesting an investigation into the leasing of rolling stock for the provision of passenger services in the UK and, (...)
The Greek Competition Authority fines franchisor for resale price maintenance (Dia)
In a decision of 21 June 2008, which was recently published, the Greek Competition Authority found that the supermarket operator Dia Hellas SA (hereinafter “Dia”) infringed Article 81 EC and the equivalent provision of Greek law by engaging in resale price maintenance with members of its (...)
The Higher Regional Court of Düsseldorf holds that exclusive purchase obligations contained in franchise agreements are not necessarily prohibited as unfair hindrances, even though they cover the whole assortment of goods (Baumarkt)
On 16 January 2008 the Higher Regional Court of Düsseldorf issued a decision on questions concerning the German prohibition of unfair hindrance, Sec. 20(1) of the German Act against Restraints on Competition (ARC). The questions arose in administrative proceedings by the German Federal Cartel (...)
A Dutch Court rules on the anticompetitive effects of an obligation to offer a supermarket for sale in case of termination of a franchise agreement in the large retail distribution sector (Prisma)
The present case was concerned with the restrictive effects, under competition law, of contractual conditions surrounding the ending of a franchise agreement in the supermarket sector. The facts of the case were the following. In 1989, Prisma, the legal successor of Flevozoom Vastgoed B.V., (...)
The Spanish National Competition Commission rules that neither inter- nor intra-brand competition is affected by restrictive practices in the postal sector (Logimail / Unipost)
On April 29th, 2005, Logimail filed a complaint against Unipost. Logimail is a postal operator that performs pickup services, sorting and even distribution. To complete the distribution, however, it outsources the service to other postal operators. Unipost is one of the main postal-services (...)
The Higher Regional Court of Düsseldorf finds an exclusive purchase obligation in breach of Art. 81 EC and replaces a void non-compete obligation in a franchise agreement (The Body Shop)
Background
The cosmetics chain The Body Shop (TBS) employs two different types of distribution channels in Germany: On the one hand, it holds a number of proprietary retail outlets and, on the other hand, it distributes its products through a franchise system. Under the franchise system the (...)
A Dutch Court decides, in an interlocutory proceeding, that the nullity of a price-fixing clause brings along the nullity of the franchise agreement as a whole, including its non-compete clause (Make It Easy)
Several franchise agreements were concluded between Make It Easy B.V. and Make It Easy Reality B.V. (hereafter the franchisers) on the one hand, and Make it Easy Gelderland V.O.F as well as other undertakings (hereafter the franchisees), on the other. According to these franchise agreements, (...)
The French Competition Council fines a chain store chocolate franchisor for a price fixing practices in sales to work councils (Jeff de Bruges)
French Competition Council (Conseil de la Concurrence), 24 January 2007, Decision n° 07-D-04, rregarding practices implemented by the Jeff de Bruges franchise network (“relative à des pratiques mises en œuvre par le réseau de franchise Jeff de Bruges”)
In a decision dated 24 January 2007, (...)
The French Competition Authority fines a chocolate manufacturer for having imposed on its franchisees retail prices to certain of its corporate customers (Jeff de Bruges)
Description of the impugned case
Jeff de Bruges SAS limited the contractual freedom of its franchisees by imposing retail prices for certain corporate customers (comité d’entreprise).
These sales with specific range of products were promoted through “books CE”, containing notably CE (...)
The French Competition Council fines a Belgian chocolate manufacturer for having imposed resale price maintenance for sales to works committees (Jeff de Bruges)
By a decision dated January 27, 2007, the French Competition Council fined the Belgian chocolate manufacturer Jeff de Bruges for fixing retail prices concerning chocolate sales to works committees.
The Belgian company Jeff de Bruges specializes in the distribution of chocolates and other (...)
A Danish Court confirms that reporting of sales prices and contribution margins may amount to resale price fixing (Bestseller)
On 27 November 2006, the High Court of Western Denmark upheld a decision by the Danish Competition Appeal Tribunal finding that an IT-system through which the supplier was informed on a daily basis of independent retailer’s sales prices and contribution margins on individual items effectively (...)
The Dutch District Court of Maastricht assesses compatibility of a franchise agreement with EC competition law (BBQ Franchise)
In January 2006 summary proceedings were brought before the District Court of Maastricht by a franchisee (hereafter: the claimant) against its franchisor BBQ Franchise B.V. (hereafter: BBQ). The District Court applied EC competition law to set out the limits of what can and cannot be arranged (...)
The US Supreme Court overturns a Lower Court decision for the plaintiff but reiterates the traditional method of proving secondary line price injuries under the Robinson-Patman Act (Volvo Trucks / Reeder-Simco)
The Robinson-Patman Act and Consumer Welfare: Has Volvo Reconciled them?*
The Robinson-Patman Act is the black sheep of antitrust. Unlike the other antitrust laws, its fundamental goal is not to preserve competition in order to benefit consumers, but to limit competitive rivalry in order to (...)
The US Supreme Court reverses a lower court’s decision clarifying competitive injury and secondary price line discrimination under the Robinson-Patman Act (Volvo Trucks / Reeder-Simco)
Competitive Injury and Price Discrimination in the United States*
In Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., the Supreme Court provided guidance on whether, under the Robinson-Patman Act, a manufacturer may offer one dealer better prices than another dealer when those (...)
A Dutch Court of Appeal declares a franchise agreement compatible with national competition law on the basis of the ECJ Pronuptia Case (Multicopy)
In 1989, Multicopy (the franchisor) and the applicant (the franchisee) concluded a franchise agreement for the exploitation of a Multicopy print service establishment. This agreement was concluded for a duration of 10 years and was due to expire in October 1999. Under this agreement, the (...)
The Paris Court of Appeal holds that Art. 81 EC does not apply to a hairdressing franchise national network and that the provided “clause d’agrément” does not amount to a hardcore restriction (Socovi / Jean-Louis David)
Background
SARL SOCOVI, the franchisee, had entered into a franchising agreement with Jean Louis David SA, the franchisor, whereby the latter granted the former the right to run a franchise for the purposes of marketing hairdressing products and services. It included inter alia the right to (...)
A Dutch Court declares a franchise agreement void because of a clause allowing the franchisor to impose a maximum price for promotional purposes (Market Food Group - “Bakkerijt Stoepje")
Market Food Group B.V. (hereafter “MFG”) is active in bakery products. It has developed a franchising network under the brand “Bakkerij ‘t Stoepje” for open air markets stands in The Netherlands.
The franchise agreement contains inter alia the following clauses: The franchisee shall (...)
The French Competition Council authorizes a franchisor to recommend a maximum resale price on its franchisees (Plus International)
Description of the impugned case
In a case of a franchising agreement, the franchisor recommended to franchisees to respect a maximum price during promotional and non-promotional period.
The French competition Council considers that the pricing policy implemented by the franchisor was not (...)
The Hungarian Competition Authority objects to RPM and exclusive purchasing in petrol station franchising agreements (MOL)
Description of the impugned case
The agreements at stake were part of a franchising network by MOL (the largest oil and gas company in Hungary) relating to operators of petrol stations and contained straightforward RPM clauses. The agreements also contained exclusive purchasing obligations. (...)
The German Federal Court of Justice holds that a franchisor’s advertisement containing sale prices can constitute a prohibited retail price maintenance if the franchisor does not explicitly limit the indication of price to his own branches or clearly indicates that they are not binding for the franchisees (Apollo)
Description of the impugned case
The case deals with indirect RPM in the framework of a franchising system. The BGH holds that if a franchisor who distributes his products both, via a franchise system and via his own branches, advertises with fixed sale prices without however limiting such (...)
The German Federal Cartel Office imposes a fine on a specialist retailer for not having clearly distinguished his own branches from the franchisees with regard to pricing and advertisement policies, thus restricting the franchisee’s freedom to determine their own retail prices
Description of the impugned case
The FCO decided that the specialist retailer violated the (at that time applicable) special prohibition to recommend retail prices in particular by providing the franchisees with price recommendations without however indicating that those prices were not (...)
A Luxembourg Commercial Court rules that a de minimis exclusive distribution agreement is not prohibited under Article 85 EC (La Pastourelle / Rolling)
1. Facts
On 1 April 1982, "la Pastourelle" (hereafter "the plaintiff"), limited company under Belgian law, and "Maison Rolling" (hereafter "the defendant"), shop located in Luxembourg, concluded an exclusive sale agreement for a duration of 5 years. This agreement was extended for the same (...)
The German Federal Court of Justice holds that the prohibition to fix prices regarding contracts with third parties is applicable to the relationship between franchisor and franchisee at least in the event that the franchisee himself bears the economic risk of his franchising business (Preisbindung durch Franchisenehmer)
Description of the impugned case The case deals with indirect RPM in the framework of a franchising system in which the franchisor who operates several own branches, advertises for certain prices without however limiting the indications of prices to his own branches or pointing out their (...)
The Italian Competition Authority assesses a de minimis franchising contract (Il Tucano Franchising)
Background On 13 November 1997 the ICA issued its first decision regarding the compatibility of a franchise contract with the prohibition of anticompetitive agreements.
The agreement which was assessed by the ICA regarded the franchising network set up by Il Tucano Franchising for the retail (...)
The French Supreme Court confirms the NCA’s decision that the publication of a catalogue including prices combined with recommendations pursuant to which retailers are only allowed to apply a lower price when there is a fierce competition, amounts to resale price maintenance (ITM)
Description of the impugned case
ITM manages a supermarkets’ network, mostly with franchisees.
ITM has published in France during 1990 and 1991 a few millions of catalogues called “L’argus de la distribution” including the prices of washing powders.
It also results from the (...)
The Paris Court of Appeal considers that the use and implementation by franchisees of the franchisor’s contractual documents has an equal effect to a resale price maintenance practice (CEJIBE)
Description of the impugned case
In a franchising network, franchisor sent to each franchisee pre-printed and standardized documents including amount of rebates and fixe fees.
The appeal Court has considered that diffusion of standards documents was a huge incitation to apply rebates and (...)
The Luxembourg Commercial Court found non-compete, price fixing and exclusivity clauses in a franchising agreement severable from the rest of the agreement (Wintergarten Feddersen / Soluver)
The undertakings Wintergarten Feddersen and Soluver concluded in 1985 a franchising agreement for the distribution of verandas. In 1987 Wintergarten Feddersen, the franchisor, brought proceedings against Soluver, the franchisee, before the Tribunal de commerce (“Commercial Court”) of (...)