Selective distribution agreement from the perspective of ‎competition law (Study in EU and Iran law)‎

Document Type : Research Paper

Authors

1 Faculty of Law, University of Tarbiat Modares, Tehran, Iran

2 Faculty of Law, University of Tarbiat Modares, Tehran, Iran‎

Abstract

The selective distribution contract is a binding agreement whereby the supplier undertakes to supply the products to distributors selected based on certain criteria, in return for which the distributors undertake not to sell such goods to unauthorized distributors (distributors outside the selective distribution network). Due to the contract's restrictions on competition, there are concerns about its competitive or anti-competitive. In EU competition law, whether the contract is competitive or anti-competitive, a dual procedure has been adopted between the courts and the Commission. Based on these procedures, we cannot consider the contract as absolutely competitive or anti-competitive. In each case, it is necessary to analyze the contract from the perspective of competition law according to the criteria. In Iranian competition law based on the form-based approach (Article 45 of the General Policy Implementation Law of Article 44 of the Constitution law), the contract is not anti-competitive. Based on the effect-based approach (Article 44 of said law), we cannot write a single version and we must decide in each case according to market conditions and its competitive and anti-competitive aspects. In EU law, there are cases called block exemptions, which, if proven, exclude the contract from the prohibition and guarantee of enforcement of competition law, but in the Iranian legal system, there is no text in this regard. Under EU law, the deprivation of the right to distribute online from the distributor of the selective distribution network is in principle anti-competitive and its other restrictions are competitive if they are in line with the restrictions on offline distribution and otherwise anti-competitive. In Iranian law, according to Article 44 of said law, the deprivation of the mentioned right and its other restrictions is considered anti-competitive if it leads to the disruption of competition (cases of paragraph 20 of Article 1 of said law).

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Comparative Law Review
Volume 14, Issue 1
Spring & Summer 2023
July 2023
Pages 199-220

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