Exclusivity and competition law: Does excellence excuse exclusion?

Dinner organized by Concurrences Review in partnership with Clifford Chance.

The exclusivity between exclusion and efficiency

Patrick Hubert

The question of the role of economic analysis in case law is raised. It seems to favour clear and more formalistic rules, making it possible to identify anti-competitive practices without resorting to complex calculations.

Exclusivity refers to a situation in which a product is sold by or to a single company. In essence, exclusivity produces tension. It presupposes an absence of competition, in particular between distributors. But it can also have pro-competitive effects in some cases, which economists help to identify. Exclusivity thus makes it possible to make investments, for example in advertising, which distributors are normally reluctant to make, mainly for fear of free riding.

This tension is known in terms of exclusive distribution, but it is actually found in a wide variety of areas. Several types of exclusivity can be identified. First, statutory exclusions, such as the monopoly reserved for taxis. Then there are contractual exclusivities: they allow the supply of a product, its sale, or any innovation to be reserved for a given company. Exclusivity can also be purely unilateral: this is the case for coffee machines that only work with the pods sold by the machine manufacturer. Finally, there are de facto exclusions: this is the case of discount systems that are conditional on exclusive supply from the company concerned: although there is nothing to prevent the customer from diversifying his supply, he loses his discount.

Photos © Léo-Paul Ridet.

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