Introduction
Although it is not always easy to predict the operation of Articles 81 and 82 in relation to commercial agreements, it is worth considering certain points when drafting or reviewing an agreement. It is important to identify whether the Articles are likely to apply, and if so, whether they can be avoided.
Agency agreements
Article 81(1) may not apply at all because one or more of the following statements is true:
- The agent is not acting independently in relation to the contract goods, e.g. the agent accepts no financial risk under the agreement
- The principal and agent are parent and subsidiary companies and therefore count as a single entity
- The agreement is incapable of affecting trade and competition within the EU, e.g. it does not contain any restrictive terms
- The parties' market share may be small enough to fall within the Notice on Agreements of Minor Importance (see the previous section)
If none of the above apply the agency agreement will probably have to be treated in the same way as a distribution agreement (see below). Bear in mind, however, that no block exemption applies to agency agreements.
Distribution agreements
Article 81(1) may not apply if one or more of the following statements are true:
- The parties are parent and subsidiary companies and therefore count as a single entity
- The agreement is incapable of affecting trade and competition within the common market, e.g. it does not contain any restrictive terms
- The parties' market shares may be small enough to fall within the Notice on Agreements of Minor Importance. When drafting an agreement it is always a good idea to try and draft it to get the benefit of block exemption whenever possible
If none of the exemptions apply, consider notifying the agreement to the Commission for negative clearance or an individual exemption.
Application of Article 82 to agency and distribution agreements
Article 82 is far less likely to apply to individual commercial agreements than Article 81. However, it must not be ignored, especially if one of the parties has a large market share. Bear in mind that if Article 82 does apply, there is no way of avoiding infringement.
When considering the application of Article 82, the following questions will be relevant:
- Does the agreement involve a company with a dominant position in the relevant markets?
- Is that dominant position within the EU a substantial part of it?
- Does the conduct of the dominant company amount to abuse of a dominant position?
If the answers to all these questions are yes, Article 82 prohibits the abuse insofar as it may affect trade between member states.
