Due to the rapid and consistent progression and development of information technology and computer science, widespread use of the internet has catapulted internet sales and e-commerce. E-commerce brings with it many pros and cons. In addition, it significantly affects agreements between the various players of competition law. This research paper seeks to analyse the impact of e-commerce on vertical agreements, particularly, selective distribution agreements. Vertical agreements are agreements which are entered into by undertakings or firms which operate at different levels of the market. Selective distribution systems are a type of vertical agreement within which a supplier sells goods or services to distributors who are obliged to sell these goods or services based on specific criteria. Throughout this paper, the repercussions of e-commerce which are experienced by manufacturers, distributors and consumers will be examined in order to determine the role and effect of e-commerce on selective distribution systems. There will also be critical examination of the rules governing vertical agreements in the European Union and an assessment of their appropriateness and applicability. The pertinency of the aforementioned rules will be discussed and recommendations will be made accordingly.
Both primary and secondary sources are to be utilized in the execution of this research paper. Through a critical examination of such materials, there will be thorough analysis of the primary focus of this paper, the impact of e-commerce on selective distribution systems.
Table of Contents
Introduction
Chapter 1: The Nature and Economics of the Selective Distribution System
1.1 Vertical Agreements
1.2 Selective Distribution Agreements
1.3 Pro-competitive and Anticompetitive Elements of Selective Distribution Systems
1.4 Conclusion
Chapter 2: The Impact of E-commerce on the Participants in Selective Distribution Systems
2.1 Introduction
2.2 Selective Distribution and E-commerce
2.3 The Impact of E-commerce on Consumers in Selective Distribution Systems
2.4 The Impact of E-commerce on Distributors in Selective Distribution Systems
2.5 The Impact of E-commerce on Manufacturers in Selective Distribution Systems
2.6 Conclusion
Chapter 3: The Legal Problems Posed by E-commerce in Selective Distribution Systems
3.1 Introduction
3.2 The European Commission’s Guidelines and Regulation 330/2010
3.3 The Application of the Vertical Guidelines in the Case Law
3.4 Deficiencies of Regulation 330/2010
3.5 Conclusion
Conclusion and Recommendations: The Impact of E-commerce on Selective Distribution Systems
Research Objectives and Core Topics
This paper examines how the integration of e-commerce into selective distribution systems affects the interests and legal status of manufacturers, distributors, and consumers, while evaluating the adequacy of existing European Union regulations in addressing the resulting legal challenges.
- The economic nature and pro-competitive objectives of selective distribution systems.
- The shift in dynamics between market participants brought about by the rise of online retail.
- Compatibility of manufacturer-imposed internet sales restrictions with EU Competition Law.
- Legal analysis of landmark cases, including Pierre Fabre and Coty, in the context of Regulation 330/2010.
- Identification of regulatory deficiencies concerning online and offline market definitions.
Excerpt from the Book
1.1. Vertical Agreements
Vertical agreements may present a challenge in terms of their compatibility with the aims and objectives of Competition Law. Vertical agreements are those agreements which are entered into by two or more undertakings which operate at different levels of the production or distribution chain and are usually considered to be pro-competitive. An example of a vertical agreement is an agreement between a manufacturer and a distributor. In contrast, horizontal agreements are agreements which are entered into by undertakings which compete at the same level of the production or distribution chain. The latter agreements are more likely to be viewed as anticompetitive either by object or effect.
Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) highlights that “all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market” are prohibited. There has been uncertainty as to whether Article 101 TFEU applies to vertical agreements and as to the manner in which vertical agreements are to be assessed. However, in the case of Consten and Grundig, the ECJ clarified the law by stating that “Article 101 TFEU refers in a general way to all agreements which distort competition and does not lay down any distinction between those agreements based on whether they are made between competitors operating at the same level in the economic process or between non-competing persons operating at different levels.”
Summary of Chapters
Introduction: Provides an overview of selective distribution networks and outlines the legal and economic friction caused by the emergence of e-commerce.
Chapter 1: The Nature and Economics of the Selective Distribution System: Explores the definition of vertical agreements and the economic rationales for qualitative distribution systems, such as brand protection and service quality.
Chapter 2: The Impact of E-commerce on the Participants in Selective Distribution Systems: Analyzes the varying, often conflicting, effects of online platforms on manufacturers, distributors, and consumers, with a focus on the free-rider problem.
Chapter 3: The Legal Problems Posed by E-commerce in Selective Distribution Systems: Investigates the application of Regulation 330/2010 to online sales, specifically focusing on how European case law handles absolute versus partial bans on digital channels.
Conclusion and Recommendations: The Impact of E-commerce on Selective Distribution Systems: Summarizes the identified regulatory shortcomings and proposes legislative reforms to better govern the intersection of physical and virtual marketplaces.
Keywords
Competition Law, Selective Distribution Systems, E-commerce, Vertical Agreements, Regulation 330/2010, EU Law, Pierre Fabre, Coty, Online Sales, Free-riding, Market Foreclosure, Consumer Welfare, Intra-brand Competition, Digital Single Market, Qualitative Criteria.
Frequently Asked Questions
What is the fundamental focus of this publication?
The work explores the legal and economic impact of e-commerce on selective distribution systems, evaluating how online sales affect brand control and intra-brand competition within the framework of European competition law.
What are the primary thematic areas of the research?
Key themes include the economics of vertical agreements, the balancing of interests between manufacturers and distributors in the digital age, and the interpretation of EU regulations concerning online sales restrictions.
What is the central research question?
The paper asks how manufacturers, distributors, and consumers are impacted by the inclusion of e-commerce in selective distribution systems and whether current European regulations sufficiently address the resulting legal challenges.
Which scientific or legal methods are applied?
The paper utilizes a legal and economic analysis, incorporating an examination of EU Treaty articles (specifically Article 101 TFEU), Regulation 330/2010, and a deep-dive into relevant European Court of Justice case law.
What topics are covered in the main body?
The main body treats the nature of selective distribution, the specific challenges of internet-based "free-riding," the classification of active vs. passive sales, and the potential deficiencies in existing regulatory frameworks.
Which keywords best characterize this work?
The work is characterized by terms such as competition law, selective distribution, vertical agreements, EU regulatory frameworks, e-commerce, and market foreclosure.
How does the author interpret the impact of the "Pierre Fabre" case?
The author argues that the ruling in Pierre Fabre established that de facto bans on internet sales constitute a restriction of competition by object, which significantly limits a manufacturer's ability to exclude online platforms from their distribution strategy.
What constitutes the core "deficiency" identified in Regulation 330/2010?
The author identifies a failure to treat virtual and physical marketplaces under consistent but distinct rules, noting that the regulation struggles to manage "dual" business operations and lacks specific guidelines for social media and advanced digital advertising.
- Arbeit zitieren
- Chelsea Dookie (Autor:in), 2018, The Impact of E-commerce on Selective Distribution Systems, München, GRIN Verlag, https://www.grin.com/document/1448915
