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Exclusive supply agreements and competition : Application in the iPhone case

This article reviews the various potential effects of exclusive supply agreements on competition and firm investments and compares it to the reasoning made by the Conseil or Autorité de la concurrence in its decisions. In particular, this analytical framework is put into perspective with the decision of the Conseil de la concurrence regarding the exclusive supply agreement between Orange and Apple on the commercialization of iPhone mobiles (08-MC-01). The article shows that the duration of this agreement was manifestly too long compared to the investments it helped to promote and to the limitations of competition it also entailed. Finally, it highlights the implications and difficulties associated with the standard of proof imposed by the Cour de cassation in the case of interim measures regarding exclusive supply agreements of a new product.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. 1. The Guidelines on Vertical Restraints define exclusive supply agreements as those "whose main object is to oblige or induce the supplier to sell the contract products only or mainly to one buyer, in general or for a particular use". In practice, exclusive supply agreements mainly concern two types of market relationship. The classic framework is that of a "vertical chain", in which a supplier sells a product to a distributor or wholesaler on an exclusive basis: only the distributor or wholesaler may resell the product as it stands to final customers or undertakings. A more recent configuration is that of "system goods", which combine separate products

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Etienne Pfister, Gautier Duflos, Exclusive supply agreements and competition : Application in the iPhone case , September 2010, Concurrences N° 3-2010, Art. N° 31876, pp. 23-32

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