Decree No. 198 / 2001 Coll.
Ordinance of the Office for the Protection of Competition for the Authorisation of a General Exemption from the Prohibition of Competition Agreements pursuant to § 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of vertical agreements
Valid
Order
Effective from 01.07.2001
Text versions:
01.07.2001
20.06.2001
198
DECLARATION
The competition authority
of 5 June 2001
authorising a general exemption from the prohibition of agreements distorting competition pursuant to Article 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of vertical agreements
According to Section 26 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, the Authority provides:
The prohibition provided for in Article 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, hereinafter referred to as "the Act ', does not apply to agreements which meet the conditions laid down in this Decree which are concluded between two or more competitors operating for the purposes of the Agreement at different levels of production or distribution chain and which relate to the conditions under which the parties to the Agreement may purchase, sell or resell certain goods, hereinafter referred to as" vertical agreements'.
For the purposes of this Order
(a) competing competitors shall mean current or potential future competitors making available on the market goods which are considered to be substitutable to the consumer in view of its characteristics, price and intended use;
(b) an obligation not to compete shall mean any, direct or indirect obligation prohibiting the manufacture, purchase or sale of goods competing in the goods forming the subject of the agreement, or any obligation imposing on the supplier or another competitor designated by the supplier more than 80% of the purchases of goods constituting the subject of the agreement, calculated in the previous calendar year;
(c) an exclusive supply obligation means any, direct or indirect obligation to sell goods forming the subject of an agreement exclusively to a person;
(d) selective distribution system means a distribution system in which the supplier undertakes to sell goods forming the subject of the agreement only to customers selected on the basis of certain pre-determined criteria and where those customers undertake not to sell such goods further to designated persons,
(e) know-how means a set of unpatented technical, commercial and other essential and identified experience and knowledge not known or generally available. Information necessary to ensure compliance with agreed procedures, in particular the manufacture, sale or distribution of contract goods, shall be regarded as material experience or knowledge. Such information shall be considered to be an identified experience or knowledge which is described in sufficient detail to enable it to be verified that it meets the criteria of secrecy and materiality. A description of how know-how may be part of a vertical agreement, a separate agreement or recorded in another appropriate form,
(f) active selling means the activity of the seller in seeking interested parties to purchase certain goods, in particular by promoting, maintaining a distribution warehouse or creating branches;
(g) passive sales shall mean the receipt of orders made by interested parties to purchase certain goods without, however, being sought by the seller;
(h) control shall mean the holding of a business or share in capital of more than 50% or the right to appoint or withdraw a majority of the members of the statutory body, supervisory board, directors of a legal person or the possibility of otherwise exercising decisive influence over the management of a legal person;
(i) total annual turnover means the net turnover of the parties to the Agreement. The total annual turnover of the Parties to the Agreement shall not include that part of the turnover that has been achieved by the sale of goods between the Parties to the Agreement and the persons associated with them or between those connected persons.
The prohibition under Paragraph 3 (1) of the Act does not apply to vertical agreements
(a) concluded between an association of competitors and its members or between an association of competitors and its suppliers, provided that the members of the association are sellers of goods forming the subject of the agreement and the annual turnover of each member of the association does not exceed CZK 50 million; or
(b) part of which, but not the object, is the transfer or grant of an industrial or other intellectual property right for the purposes of the use, sale or resale of certain goods or the provision of certain services.
(1) The prohibition under Article 3 (1) of the Act does not apply to vertical agreements where:
(a) the supplier's market share of the goods in question does not exceed 30%; or
(b) where the agreement contains an exclusive supply obligation, the customer's market share of the goods in question shall not exceed 30%.
(2) The prohibition provided for in Article 3 (1) of the Act also does not apply to vertical agreements where the market share of the supplier or customer of the goods in question at the time of the conclusion of the agreement does not exceed 30% and subsequently increases above that limit, provided that:
(a) shall not exceed 35% for two calendar years following the year in which the 30% threshold was first exceeded; or
(b) it shall exceed 35% for a period of one calendar year following that in which 35% was first exceeded.
(3) The rules for determining the market share of the goods referred to in paragraph 2 may not be combined in such a way that the duration of the general exemption exceeds two calendar years in such cases.
(1) However, the prohibition provided for in Article 3 (1) of the Act applies to vertical agreements which, directly or indirectly:
(a) limit customers to the determination of the price of goods for resale; This is without prejudice to the possibility for the supplier to determine the highest selling prices or to determine the recommended selling prices,
(b) restrict the territory or the circle of persons to whom the purchaser may continue to sell goods forming the subject of the agreement, with the exception of:
1. restrictions on active sales in the territory or in respect of a particular group of persons reserved by the supplier to himself or to another customer, unless the sales of customers to the customer are limited,
2. the restriction on customers operating at wholesale market level to sell to final consumers,
3. restrictions on the sale of members operating under a selective distribution system to customers operating outside that system; and
4. the restriction on the customer to sell parts which are supplied for further processing to the person who would use them to produce the same goods which are produced by the supplier;
(c) restrict customers operating at the retail level of a market which is a member of a selective distribution system to sell actively or passively to final consumers; This is without prejudice to the possibility of imposing a ban on a member of a selective distribution system not selling from a non-supplier of approved sales premises,
(d) restrict customers operating under a selective distribution system to supply each other with goods forming the subject of the agreement; This also applies to customers operating at different market levels,
(e) restrict the supplier of components or customers to whom the components are supplied for further processing, in the sale of the components as spare parts to final consumers or to third parties not authorised by the customer to make repairs;
(f) contain an obligation not to compete for more than 5 years. A period of 5 years shall not apply where the goods forming the subject-matter of the agreement are resold by the customer from sales premises or on land owned or leased by the supplier from third parties which are not linked to the customer, provided that the duration of the undertaking does not exceed the period during which the customer uses those premises or parcels,
(g) prohibit customers from producing, buying or selling the specified goods after the expiry of the agreement, unless such a prohibition concerns goods forming the object of the agreement or competing goods or selling premises used by the customer for the duration of the agreement, or is deemed necessary by the supplier to protect the known-how transmitted. The duration of such a prohibition may not exceed a period of 1 year, except for a prohibition relating to the protection of know- how; or
(h) prohibit customers who are members of a selective distribution system from selling specified competing goods.
(2) Where the obligation referred to in paragraph 1 (f) to (h) is subject to the prohibition provided for in Article 3 (1) of the Act and where it follows from the nature and content of such an undertaking that it can be separated from the other content of the Agreement, the prohibition provided for in Article 3 (1) of the Act applies only to part of the agreement containing such an undertaking.
(3) However, the prohibition under Paragraph 3 (1) of the Act also applies to vertical agreements concluded between competitors competing with each other, except in the case of non-reciprocal vertical agreements, where:
(a) the total annual turnover of the customer does not exceed CZK 100 million or where, in two consecutive financial years, this turnover threshold has not been exceeded by more than 10%,
(b) the supplier is both the manufacturer and the seller of the goods, whereas the customer is only a seller of goods which do not compete with the goods forming the subject of the agreement; or
(c) the supplier provides services at several levels of their provision, while the customer does not provide competing services at the level at which it receives those services.
By its decision, the Competition Authority may withdraw the advantages of the general exemption provided for in this Decree if, as a result of market developments, the effects of an agreement subject to a general exemption do not comply with the conditions for authorising an individual exemption under Article 8 of the Law. In particular, this may be the case where market access and competition on that market are substantially limited due to the cumulative effect of parallel networks of similar vertical restrictions on competition by competing suppliers or customers. A substantial restriction means that parallel networks of similar vertical restrictions cover more than 50% of the market.
Market shares shall be based on the ratio of the volume of sales of the goods covered by the agreement for the preceding calendar year, together with other goods sold by the supplier, which is considered to be interchangeable in terms of their characteristics, price and intended use, to the total volume of sales of the goods on the relevant market. Where information on the value of sales volume of goods on a given market is not available, an estimate based on other reliable market information may be used to establish market shares.
For the purposes of this Decree, each Party to the Agreement shall include the associated persons. A common person means a person who:
(a) control and control the Party to the Agreement;
(b) controls the same person who controls the Party to the Agreement;
(c) are checked jointly by two or more of the persons referred to in (a) and (b); or
(d) are jointly controlled by one or more of the persons referred to in points (a) to (c) and by one or more third parties.
Decree No. 5 / 2000 Coll., authorising a general exemption from the prohibition of agreements distorting competition pursuant to Sections 3 (1) and 4 (1) of Act No. 63 / 1991 Coll., on the Protection of Competition, as amended by Act No. 286 / 1993 Coll., for certain types of franchise agreements, is hereby repealed.
This Decree shall take effect on 1 July 2001.
Chairman:
Ing. Bednář v. r.
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Regulation Information
| Citation | Decree of the Office for the Protection of Competition No. 198 / 2001 Coll., authorising a general exemption from the prohibition of agreements distorting competition pursuant to § 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of vertical agreements |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 20.06.2001 |
|---|---|
| Effective from | 01.07.2001 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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