Fabio Bortolotti Buffa Bortolotti

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Fabio BortolottiBuffa Bortolotti Mathis,
Torino-Milano

• Distributors and Internet
• How to keep their action within acceptable
  boundaries

2008 Annual Meeting of the International
Distribution Institute - Torino 6-7 June 2008
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• Is it advisable (for the supplier) that his
  distributors sell through Internet?

• Possible advantages
• More competition between distributors ?more sales
• Better market coverage

• Possible disadvantages
• Invasion of territory of other distributors
• Excessive price competition

BUFFA, BORTOLOTTI MATHISSTUDI LEGALI ASSOCIATI
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• The limitations arising from EU antitrust law

Article 4, Regulation 2790/1999 The exemption
provided for in Article 2 shall not apply to
vertical agreements which have as their
object .

• the restriction of the territory into which, or
  of the customers to whom, the buyer may sell the
  contract goods or services, except
• - the restriction of active sales into the
  exclusive territory or to an exclusive customer
  group reserved to the supplier or allocated by
  the supplier to another buyer, where such a
  restriction does notimit sales by the customers
  of the buyer

BUFFA, BORTOLOTTI MATHISSTUDI LEGALI ASSOCIATI
4

• The freedom of passive sales

• Distributors must remain free to respond to
  unsolicited requests
• Promotion through Internet is considered to be a
  passive sale and cannot be prohibited, unless
  clearly directed to customers outside the
  contractual territory

.
BUFFA, BORTOLOTTI MATHISSTUDI LEGALI ASSOCIATI
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• What limitations can be imposed upon the
  distributor ?

• Use of the suppliers trademark under his control
• The supplier can verify the presentation on the
  website
• The supplier can impose that the presentation of
  the products complies with the image of the
  trademark and of the company
• The supplier cannot impose unjustified
  restrictions which would limit the distributors
  freedom of passive sales

BUFFA, BORTOLOTTI MATHISSTUDI LEGALI ASSOCIATI
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• What limitations can be imposed upon the
  distributor ?

• Further limitations of the distributors freedom
• No use of language of other territories
• No shipment outside the territory ?
• No promotion of products conforming to rules of
  territories other than the contractual territory?

BUFFA, BORTOLOTTI MATHISSTUDI LEGALI ASSOCIATI
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• Special rules applicable to selective distribution

Within a selective distribution network the
distributor retains the right to actively sell to
final users from his place of business. At the
same time he must respect the standards
(presentation, service, etc.) imposed by the
supplier. Do this principles apply to selective
franchising ?
BUFFA, BORTOLOTTI MATHISSTUDI LEGALI ASSOCIATI