Can a company impose distribution restrictions on its products?
August 16, 2023 | 40,00 EUR | answered by Sandra Bittner
Dear lawyer,
My name is Artur Otremka and I am the owner of a small company specializing in the distribution of electronic products. Recently, I have come across a distribution restriction imposed by a larger competitor. The company prohibits its distribution partners from offering products online in order to reduce competition and maintain stable prices.
I am concerned as I also sell online and fear that this restriction could impact my sales and business operations. I wonder if it is legally permissible for a company to impose such a distribution restriction and if there are ways to address it.
Could you please explain to me whether this distribution restriction violates competition law and what legal steps I, as an affected entrepreneur, can take to protect my interests? Are there any alternatives to deal with this situation and secure my business operations?
Thank you in advance for your help and support.
Sincerely,
Artur Otremka
Dear Mr. Otremka,
Thank you for your inquiry regarding the distribution restriction you are facing. As a lawyer specializing in competition law, I understand that this situation is concerning for you as a business owner. I would like to provide you with a detailed response to your questions.
First of all, it is important to mention that distribution restrictions are not generally prohibited, as long as they meet certain requirements. However, strict rules apply within competition law to ensure fair competition and consumer protection. A distribution restriction must not be used to limit competition or artificially inflate prices.
In your case, it appears that the larger competitor has imposed the distribution restriction to reduce competition and keep prices stable. This could potentially violate competition law, especially antitrust laws that prohibit such practices. As an affected business owner, you do have options to challenge this distribution restriction.
For example, you could file a complaint with the competition authority, which can investigate the case and take action if necessary. Additionally, you could also take legal action by suing the competitor and claiming damages. It is advisable to seek advice from an experienced lawyer to develop the best possible strategy.
There are also alternative ways to handle this situation and secure your business operations. For instance, you could look for other distribution channels unaffected by the restriction, or collaborate with other businesses to collectively address the competitor.
I hope this information helps you and encourages you to protect your interests and challenge the distribution restriction. If you have any further questions or need legal assistance, I am here to help.
Sincerely,
Sandra Bittner, Lawyer
