Exclusive distribution and exemption rules

In principle, the responsibility to protect its exclusive members from active sales in their exclusive territories, otherwise known as the “parallel obligation”, rests on the head of the distribution network.

Principle of parallel obligation

To date, no text or case law expressly requires the head of the network to take action against a member or a buyer making active sales in exclusive territories. Indeed, only the 2022 guidelines on vertical restraints state that:

“[i] n order to preservetheir [exclusive distributors’] incentives to invest, the supplier shall protect its exclusive distributors from active sales, including targeted online advertising, by all other buyers of the supplier in their exclusive territory or to their exclusive group of customers ”. (2022 Vertical Restraint Guidelines, 2022/C 248/01, para 219)

Facts of the case

In the case discussed, it is the company Beevers Kaas, exclusive distributor in Belgium of Beemster products, which it buys from the producer Cono, a company based in the Netherlands. Since 1993, there has been an exclusive distribution agreement between Cono and Beevers Kaas for the distribution of Beemster products in Belgium and Luxembourg. Albert Heijn companies operate in the supermarket sector in Belgium and the Netherlands. They buy Beemster goods produced by Cono for markets outside Belgium and Luxembourg.

Beevers Kaas accuses Albert Heijn companies of engaging in activities in Belgium that have the direct or indirect effect of infringing Beevers Kaas’ exclusive rights under the exclusive distribution agreement, even though they knew that Cono is bound by this agreement.

According to Albert Heijn, Beevers Kaas and Cono are seeking to impose a ban on active sales. Albert Heijn considers that the exclusive distribution agreement does not impose an obligation on Cono to protect Beevers Kaas against active sales by other distributors and does not meet the strict conditions of competition law to justify a resale ban.

In this case, two questions are referred to the Court for a preliminary ruling, but only the first one will be of interest to us today.

Question for a preliminary ruling

The first question referred for a preliminary ruling is whether Regulation ^No 330/2010 should be interpreted as meaning that, in a situation where a supplier has allocated a territory exclusively to a given distributor, the mere finding that its other purchasers (i.e. purchasers who do not benefit from this particular exclusivity regime) do not engage in active sales in that territory is sufficient to establish the existence of an agreement between that supplier and those other purchasers concerning the prohibition of active sales in that territory.

Findings of the Court of Justice

To answer this question, the Court of Justice begins by recalling that in accordance with Article 4 of Regulation ^No 330/2010, restrictions on active sales in the exclusive territory that a supplier has allocated to one of its buyers may benefit from an exemption, provided that the conditions provided for in Regulation ^No 330/2010 are met.

As such, the Court takes up the argument of the Advocate General, based on point 51 of the 2010 guidelines, considering that “the granting, by a supplier, of territorial exclusivity to one of its buyers necessarily comes with the parallel obligation, for this supplier, to protect this buyer against the active sales of the other buyers of said supplier. It follows that Article 4 (b) (i) of Regulation ^No 330/2010 aims to cover the restrictions on active sales that a supplier must, as such, impose on its buyers in order to guarantee the effectiveness of such exclusivity in the territory it has allocated to one of its buyers. “(paragraph 39, judgment commented)

Indeed, in her conclusions, Ms Laila MEDINA, Advocate General at the Court of Justice of the European Union, published on 9 January 2025, recalled that the supplier putting in place restrictions on the active sales of its network: “has the corresponding obligation to ensure the useful effect of this exclusive allocation of a territory, including by protecting this buyer against active sales in this territory by all other buyers of the supplier. (Opinion of Advocate General Laila MEDINA, 9 January 2025, C-581/23, paragraph 40)

The Court is engaged in the assessment of the existence of an agreement between the supplier and the buyer, which can be qualified as a vertical agreement likely to fall under Article 4 (b) (i) of the aforementioned Regulation. For the purposes of Article 101 of the Treaty on the Functioning of the European Union (hereinafter “TFEU”), for there to be an “agreement”, “it is sufficient that the undertakings in question have expressed their common desire to behave on the market in a determined manner. An agreement cannot therefore be based on the expression of a purely unilateral policy of a party to a distribution contract “. (paragraph 41, judgment commented)

Thus, in its examination, the Court verifies (1) whether it can be found that Cono has invited, in any form whatsoever, its buyers not to engage in active sales in the exclusive territory allocated to Beevers Kaas, (2) whether Cono’s buyers have explicitly or tacitly acquiesced to a possible invitation from this supplier.

The Court notes, on the one hand, that the distribution agreements concluded between Cono and its buyers did not contain any clause requiring the latter to prohibit active sales in the exclusive territory allocated to Beevers Kaas. On the other hand, it was noted that with the exception of the Albert Heijn companies, no other buyer of Cono had made such sales in this territory. (paragraph 47, judgment commented)

Conclusion

Consequently, the mere fact that, apart from the Albert Heijn companies, no other buyer of Cono has made active sales in the exclusive territory of Beevers Kaas is not sufficient, in itself, to establish the existence of an “agreement” within the meaning of Article 101 TFEU. (paragraph 52, judgment commented)

In the end, despite the comments raised by the present case, the Court was rigorous in limiting itself strictly to the question put to it, namely to determine the existence or not of an agreement, even tacit, between the supplier and the buyer, relating to the prohibition of active sales in the exclusive territories granted.

Commented judgment: CJEU, 8 May 2025, C-581-23