How about we close the network?

The rule under the VBER is that territorial and customer restrictions are hardcore restrictions of competition. There are several exceptions to this rule. Last week we discussed exceptions linked to exclusive distribution systems. This week, we focus on the protection of authorised distributors in selective distribution. 

Such protection is maintained under the new regime. The VBER even allows for better protection of authorized distributors when a supplier operates selective distribution in certain territories and exclusive or open distribution in other territories, for instance because it is gradually rolling out selective distribution in the EU:

- Firstly, the supplier is allowed to prohibit sales to unauthorised distributors in the selective territory by the authorised distributors and their customers.

- Secondly, the supplier is allowed to impose a restriction on (exclusive or other) distributors and their customers, located outside the selective territory, to sell actively or passively to unauthorized distributors located inside the selective territory.
It is important to emphasize the ability of the supplier to pass on active and passive sales restrictions further down the distribution chain. This is a major improvement to protect the closed nature of selective distribution systems.