Competition Concerns – A Viewpoint :
Exclusive distribution agreements tend to reduce intra-brand competition while refusing access to the market at large.
Certain Branding agreements do not operate with the objective of restricting competition unless the supplier’s market position enables him to prevent other competitors from selling (as elaborated in EU Vertical Guidelines).
Vertical agreements are not considered anti-competitive by competition authorities and have some exemptions unless they fall in higher market share and /or have “ hard core” restrictions.
Important factors for competition analysis – level of entry barriers, buyer’s power and level of trade affected.
Unless the agreement is with a dominant player, anti-competitive foreclosure or adverse effect on competition is not possible.