2014 UIA Florence. Navigating the competition law aspects of franchising

Transcription

1 2014 UIA Florence Navigating the competition law aspects of franchising Corinne Khayat Astrid Ablasser-Neuhuber

2 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

3 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

4 Non-compete obligations in franchising A non-compete clause in franchise agreements is justified and may even exceed five years, where the obligation is necessary for common identity and reputation does not exceed the duration of FR agrmt. allows for cross-supply between franchisees 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) l 4

5 Exclusive supply clauses in franchising Exclusive supply clauses together with territorital protection restrict competition, but can be justified, in case of efficiency gains customers fair share franchisee s willingness to invest l 5

6 Exclusive supply clauses in franchising!! MIND THE NO-GOES!! no absolute territorital protection: don t eliminate possibility of crosssupply between franchisees don t restrict passive sales never in combination with determination of sales prices l 6

7 Pricing in franchising as long as the franchisees remain entirely free to determine their own prices 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

8 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

9 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

10 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

11 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

12 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

13 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

14 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

15 Contact Details bpv Hügel Professional Experience University 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), Associate with an International Law Firm (Vienna), since 2002 Associated Partner with bpv Hügel, since 2004 Partner, Head of Competition & Antitrust MMag. Dr. Astrid Ablasser- Neuhuber Rechtsanwalt/Attorney-at-Law Partner Contact: bpv Hügel Rechtsanwälte OG Donau-City-Straße Wien Phone: Fax: astrid.ablasser@bpvhuegel.com Areas of Practice European 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 Born 1969 Languages German, English, French, Italian, Spanish Memberships International 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 Information Frequent speaker at seminars and conferences, numerous nominations in national and international rankings and publications l 15

16 Contact Details bpv Hügel bpv Jádi Németh Vörösmarty tér 4 HU-1051 Budapest Tel Fax budapest@bpv-jadi.com bpv Grigorescu Stefanica 33 Dionisie Lupu Street RO Bukarest Tel Fax office@bpvgrigorescu.com bpv Hügel Rechtsanwälte Rond Point Schuman 9 Postfach 14 / 4. Stock BE-1040 Brüssel Tel Fax brussels@bpv-huegel.com bpv Braun Partners Ovocný trh 8 CZ Prag 1 Tel Fax prag@bpv-bh.com bpv Hügel Rechtsanwälte Donau-City-Straße 11, ARES-Tower AT-1220 Wien Tel Fax wien@bpv-huegel.com bpv Braun Partners Štefánikova 6/A SK Bratislava Tel. (+421) Fax.(+421) bratislava@bpv-bpv.com l 16

17 Contact Details UGGC Avocats Professional Experience Partner of UGGC Law Firm (2000) Lawyer, Robert Collin & Associés ( ) Admitted to the Paris Bar (1991) Civil Law Degree (International Law), Paris V-René Descartes Law School Corinne Khayat Avocat à la Cour Partner Contact: 47 rue de Monceau Paris Phone: Fax: c.khayat@uggc.com Areas of Practice French, Moroccan and European Union Competition Law (Antitrust, Merger Control and Market Dominance), Distribution Law, European Law, Intellectual Property Law, Contract Law Representation before French and European courts and competition authorities, representation before Moroccan competition authorities Languages French, English Memberships APDC (Association of the practitioners of Competion Law) Institut Art & Droit UIA (International Union of Lawyers) Additional Professional Information Lecturer in Competition Law at the University Paris I, Pantheon Sorbonne (2011) Professor of European Union Competition Law at the Institut Catholique ( ) Nominations in rankings (Legal 500, Decideurs ) and publications l 17

18 Contact Details UGGC Avocats Tel: Fax: rue de Monceau Paris France l 18