Friday, September 9, 2011
Posted by D. Daniel Sokol
Joanna Goyder (Freshfields) has written on Cet Obscur Objet: Object Restrictions in Vertical Agreements.
ABSTRACT: ‘Object’ restrictions of competition are conceptually different from ‘hardcore’ restrictions, even if these two types of restriction overlap to a large extent. If a restriction is ‘by object’ then any party alleging an infringement need only show the presence of an agreement including such a restriction, and need not give evidence as to its effects. So that party does not need to establish the relevant market, or the degree of market power held by the undertaking concerned. On the other hand a ‘hardcore’ restriction is one that prevents an agreement from benefiting from a given block exemption, and it is not necessarily an object restriction. The Commission's 2010 Guidelines on Vertical Restraints conflate the two concepts, leading to a risk that the lighter burden of proof applicable to object restrictions will be applied in situations where it is not appropriate. In practice in many cases it will be obvious that the hardcore restriction under assessment is also an object restriction, and the distinction is not of practical relevance. However, there will be cases where the distinction is crucial. For example, the Guidelines treat many restrictions imposed on Internet selling and use of websites by distributors, and some territorial and customer exclusivity provisions, as hardcore, and therefore object, restrictions. Some such cases, involving hardcore restrictions which are not object restrictions, should be analysed on the basis of whether or not they have anti-competitive effects.