FAS clarified certain facets of the use of antimonopoly legislation to vertical contracts
In a recent meeting, the Presidium from the Federal Antimonopoly Service of Russia (the “FAS”) adopted Clarification No. 2 of 17 Feb 2016 (the “Clarification”), concerning the use of antimonopoly legislation to vertical contracts, including distribution contracts. Particularly, the Clarification concerns vertical contracts that the parties might end up being competitors.
The Clarification affirmed the FAS’s position that the distribution agreement is really a vertical agreement, even if your parties towards the agreement (a producer along with a distributor) sell goods within the same product market, when the following the weather is met:
the distributor partcipates in the purchase of products purchased in the maker,
the distributor doesn’t participate in the output of substitute goods, and
the distributor sells substitute goods created by other manufacturers.
These criteria provide obvious guidance to manufacturers in use distributors, including guidance in identifying relation to vertical contracts which are prohibited legally. We recall that based on clauses 1 and a pair of of article 11(2) of Federal Law No. 135-FZ of 26 This summer 2006 on Protection of Competition, vertical contracts are prohibited from including provisions setting the absolute minimum or fixed resale cost (merely a maximum or suggested cost is allowed to become set) or requiring a purchaser to not sell competing goods.
Talking about the factors for admissible vertical contracts, the FAS reiterated that dealer contracts between auto manufacturers and dealers meeting all needs from the Code of Conduct within the Automotive Sector aren’t instantly, but certainly going to be, acknowledged as admissible. The FAC focuses the interest of market participants on the significance of conducting business correctly, particularly with due regard towards the provisions from the Code like a mechanism for market self-regulation. An identical Code of Conduct for that pharmaceutical industry will be adopted in March 2016.
The Clarification also clearly identified the instances by which a company agreement doesn’t constitute a vertical agreement. When goods are provided based on a company agreement, than relationship is susceptible to the prohibitions established for vertical contracts, despite the fact that among the parties towards the agreement is formally a real estate agent. That stated, it’s unclear how this principle would affect, for instance, the supply of services, in which the line between your functions of contractor and agent isn’t necessarily obvious.
Overall, not “revolutionary” anyway, the Clarification summarized the FAS’s position on certain facets of vertical contracts. It ought to be appreciated the Clarification is recommendatory anyway and doesn’t contain mandatory needs.