The EU Competition Law Treatment of Exclusive Supply Agreements

Exclusive supply agreements refer to agreements between a supplier and a distributor in which the distributor is the only one authorized to sell the supplier's goods or services in a certain area or market. These agreements can be considered a violation of EU competition law if they limit competition or prevent the emergence of new competitors.

The EU Commission and national competition authorities have the power to investigate exclusive supply agreements and can impose fines on companies found to have engaged in anti-competitive behavior. However, exclusive supply agreements can also be beneficial for competition if they help to increase efficiency and lower costs for consumers. Therefore, EU competition law applies a case-by-case assessment to determine whether exclusive supply agreements are restrictive or beneficial for competition.

The EU Commission will take into account several factors when assessing an exclusive supply agreement, such as market share, the degree of market foreclosure caused by the agreement, and the potential benefits of the agreement such as, technical or commercial advantages that would not be available if the agreement were not in place.