Navigating the competition law aspects of franchising Corinne Khayat Astrid Ablasser-Neuhuber
18
Navigating the competition law aspects of franchising Corinne Khayat Astrid Ablasser-Neuhuber 2014 UIA Florence
description
2014 UIA Florence. Navigating the competition law aspects of franchising Corinne Khayat Astrid Ablasser-Neuhuber. ROADMAP. General Exclusive dealing (Non-complete obligations, Exclusive Supply clauses) Pricing (Price fixing and price recommendations) Use of the internet - PowerPoint PPT Presentation
Transcript of Navigating the competition law aspects of franchising Corinne Khayat Astrid Ablasser-Neuhuber
Navigating the competition law
aspects of franchising
Corinne Khayat Astrid Ablasser-Neuhuber
2014 UIA Florence
21 February 2013
ROADMAP
• General
• Exclusive dealing (Non-complete obligations, Exclusive Supply clauses)
• Pricing (Price fixing and price recommendations)
• Use of the internet
• Post-term non-compete obligations
• Preferential and preemption rights
l 2
21 February 2013
Exceptions for franchise agreements
Commission‘s Guidelines on Vertical Restraints
• on how to apply the BER to licencing IPRs (paras 24-26),
• concerning efficiency gains pursuant to Art 101(3) AEUV (para. 190(1))
• and non-compete clauses (para. 190(2)).
But otherwise no distiction for vertical restraints on the purchase, sale and resale of goods and
services within franchising arrangements.
l 3
21 February 2013
A non-compete clause in franchise agreements is justified and may even exceed five years, where the obligation
The transfer of substantial know-how usually justifies a non-compete obligation for the whole duration of the supply agreement, as for
example in the context of franchising. (Commission‘s Guidelines on Vertical Restraints, para. 148)
Non-compete obligations in franchising
l 4
21 February 2013
Exclusive supply clauses together with territorital protection restrict competition, but can be justified, in case of
Exclusive supply clauses in franchising
l 5
21 February 2013
!! MIND THE NO-GOES !!
•no absolute territorital protection:
• don‘t eliminate possibility of cross-supply between franchisees
• don‘t restrict passive sales
•never in combination with determination of sales prices
Exclusive supply clauses in franchising
l 6
21 February 2013
• NO PRICE FIXING
• OK: recommendation of sales prices from franchisor to franchisees
no collusion between franchisor and franchisee as well as between franchisees amongst each other
l 7
Pricing in franchising
… as long as the franchiseesremain entirely free to
determinetheir own prices …
21 February 2013
Use of the internet in franchising
« IT IS FORBIDDEN TO FORBID »
• General rule: no prohibition or restriction on the use of the internet by a franchisee to sell products
• The use of a website to sell products: a form of passive selling
• The use of an own website: not the same thing as the opening of a new outlet
l 8
21 February 2013
Use of the internet in franchising
Authorised restrictions
• Active selling into other franchisees’ exclusive territories or customer groups through internet may be restrained within an exclusive distribution system
• Quality standards may be required for the use of the website
• A brick and mortar point of sale may, in principle, be required, excluding « pure players »
l 9
21 February 2013
Post-term non-compete obligations in franchising
Definition
Post-term non-compete obligation is any direct or indirect obligation causing the franchisee, after termination of the agreement, not to
manufacture, purchase, sell or resell goods or services
l 10
21 February 2013
Post-term non-compete obligations in franchising
Conditions of validity
Post-term non-compete obligation should be covered by the BER if it:
relates to goods or services which compete with the contract goods or services
is indispensable to protect know-how transferred by the franchisor to the franchisee
is limited to the premises and land from which the franchisee has operated during the contract period
is limited to a maximum period of one year after the termination of the agreement
l 11
21 February 2013
Post-term non-compete obligations in franchising
Definition of know-how
“non-patented practical information, resulting from experience and testing by the franchisor, which is secret, substantial and identified”
“secret”: the know-how should not be generally known or easily accessible
“substantial”: the know-how should be significant and useful for the franchisee for the use, sale or resale of the contract goods or services
“identified”: the know-how should be described in a sufficiently comprehensive manner so as to make it possible to verify that it fulfils the criteria of secrecy and substantiality
l 12
21 February 2013
Post-term non-compete obligations in franchising
Geographic scope
• The words ‘premises and land from which the buyer has operated during the contract period’ used in Article 5(3) of the BER refer only to the place from which the contract goods or services are offered for sale and not to the whole of the territory in which those goods and services may be sold under a franchise agreement (Order of the Court of Justice of the European Union, 7 February 2013, Case C-117/12 - La Retoucherie de Manuela)
l 13
21 February 2013
Preferential and preemption rights in franchising
Competition law aspects
A right of priority (preferential right or preemption right) in favour of the franchisor to acquire the franchisee’s store:
may artificially reduce competition, notably by restricting the possibility for independent stores to be purchased by competing distribution groups
could, when combined with other elements (such as a minority shareholding), confer to the franchisor a decisive influence over the franchisee under merger control rules
l 14
21 February 2013
Contact Details bpv Hügel
Professional ExperienceUniversity of Salzburg (1993 Mag. iur., 1997 Dr. iur.), University of Salzburg: Master in Journalism and French (1997 Mag. phil.), 1995 European Commission (Directorate General for Competition, stage in the Merger Task Force), 1998 court practice at the Cartel Court (Legal Assistant to the President), 1998 internship with Linklaters & Alliance (London), 1998–2002 Associate with an International Law Firm (Vienna), since 2002 Associated Partner with bpv Hügel, since 2004 Partner, Head of Competition & Antitrust
Areas of PracticeEuropean and Austrian Competition Law, (Antitrust, Merger Control and Market Dominance) Distribution Law, European Law, International Business Transactions, Representation before Austrian and European courts and competition authorities
Born1969
LanguagesGerman, English, French, Italian, Spanish
MembershipsInternational Bar Association, Union Internationale des Avocats (President of the Competition Law Commission), Vienna Bar Association, Studienvereinigung Kartellrecht e.V. (Member of the Board), International League of Competition Law
Additional Professional InformationFrequent speaker at seminars and conferences, numerous nominations in national and international rankings and publications
MMag. Dr. Astrid Ablasser-NeuhuberRechtsanwalt/Attorney-at-Law
Partner
Contact:bpv Hügel Rechtsanwälte OGDonau-City-Straße 111220 WienPhone: +43 1 260 50-205Fax: +43 1 260 50-208e-mail: [email protected]
l 15
21 February 2013
Contact Details bpv Hügel
bpv Jádi Németh
Vörösmarty tér 4
HU-1051 Budapest
Tel. +36 1 429 4000
Fax +36 1 429 4001
www.bpv-jadi.com
bpv Grigorescu Stefanica
33 Dionisie Lupu Street
RO-020021 Bukarest
Tel. +40 21 264 16 50
Fax +40 21 264 16 60
www.bpv-grigorescu.com
bpv Braun Partners
Ovocný trh 8
CZ-110 00 Prag 1
Tel. +420 224 490 000
Fax +420 224 490 033
www.bpv-bh.com
bpv Hügel Rechtsanwälte
Donau-City-Straße 11, ARES-Tower
AT-1220 Wien
Tel. +43 1 260 50 0
Fax +43 1 260 50 133
www.bpv-huegel.com
bpv Hügel Rechtsanwälte Rond Point Schuman 9Postfach 14 / 4. StockBE-1040 BrüsselTel. +32 2 286 81 10Fax +32 2 286 81 [email protected]
bpv Braun Partners
Štefánikova 6/A
SK-811 05 Bratislava
Tel. (+421) 233 888 880
Fax.(+421) 257 200 170
www.bpv-bh.com
l 16
21 February 2013
Contact Details UGGC Avocats
Corinne KhayatAvocat à la Cour
Partner
Contact:47 rue de Monceau75008 - ParisPhone: +33 1 56 69 70 00Fax: +33 1 56 69 70 71e-mail: [email protected]
Professional ExperiencePartner of UGGC Law Firm (2000)Lawyer, Robert Collin & Associés (1987-1999)Admitted to the Paris Bar (1991)Civil Law Degree (International Law), Paris V-René Descartes Law School
Areas of PracticeFrench, Moroccan and European Union Competition Law (Antitrust, Merger Control and Market Dominance), Distribution Law, European Law, Intellectual Property Law, Contract LawRepresentation before French and European courts and competition authorities, representation before Moroccan competition authorities
LanguagesFrench, English
MembershipsAPDC (Association of the practitioners of Competion Law)Institut Art & DroitUIA (International Union of Lawyers)
Additional Professional InformationLecturer in Competition Law at the University Paris I, Pantheon Sorbonne (2011)Professor of European Union Competition Law at the Institut Catholique (1995-2002)Nominations in rankings (Legal 500, Decideurs…) and publications
l 17
21 February 2013
Contact Details UGGC Avocats
www.uggc.com
Tel: + 33 1 56 69 70 00
Fax: + 33 1 56 69 70 71
47 rue de Monceau
75008 Paris
France
l 18
![[12] - Fouret - Khayat - SQDI](https://static.fdocuments.net/doc/165x107/61570463a097e25c765024a1/12-fouret-khayat-sqdi.jpg)
