1. Fabio Bortolotti Buffa Bortolotti & Mathis, Torino-Milano
Distributors and Internet
How to keep their action within acceptable boundaries
2008 Annual Meeting of the International Distribution Institute - Torino 6-7 June 2008

2. BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI
Is it advisable (for the supplier) that his distributors sell through Internet?
Possible advantages
More competition between distributors more sales
Better market coverage
Possible disadvantages
Invasion of territory of other distributors
Excessive price competition
BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI

3. The limitations arising from EU antitrust law
Article 4, Regulation 2790/1999
The exemption provided for in Article 2 shall not apply to vertical agreements which […] have as their object ….
the restriction of the territory into which, or of the customers to whom, the buyer may sell the contract goods or services, except
- the restriction of active sales into the exclusive territory or to an exclusive customer group reserved to the supplier or allocated by the supplier to another buyer, where such a restriction does notimit sales by the customers of the buyer
BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI

4. The freedom of passive sales
Distributors must remain free to respond to unsolicited requests
Promotion through Internet is considered to be a passive sale and cannot be prohibited, unless clearly directed to customers outside the contractual territory ….
BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI

5. What limitations can be imposed upon the distributor ?
Use of the supplier’s trademark under his control
The supplier can verify the presentation on the website
The supplier can impose that the presentation of the products complies with the image of the trademark and of the company
The supplier cannot impose unjustified restrictions which would limit the distributor’s freedom of passive sales
BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI

6. What limitations can be imposed upon the distributor ?
Further limitations of the distributor’s freedom
No use of language of other territories
No shipment outside the territory ?
No promotion of products conforming to rules of territories other than the contractual territory?
BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI

7. Special rules applicable to selective distribution
Within a selective distribution network the distributor retains the right to actively sell to final users from his place of business.
At the same time he must respect the standards (presentation, service, etc.) imposed by the supplier.
Do this principles apply to “selective” franchising ?
BUFFA, BORTOLOTTI & MATHIS STUDI LEGALI ASSOCIATI