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ToggleThe contribution analyses the applicability of European antitrust law to commercial agency agreements, starting from the premise that, in most cases, such agreements do not fall under Article 101(1) TFEU, as the agent acts as an auxiliary of the principal and does not assume significant economic risks. However, the evolution of the market - notably with the emergence of hybrid figures such as online platforms and influencers - calls for critical reflection: in some cases, the structure of the relationship may justify the application of antitrust rules, requiring a careful, case-by-case assessment. The article explores the relevant legal and jurisprudential criteria and speculates on future developments of this qualification.
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1. General legal framework.
European antitrust law stems from the need to balance two opposing interests: on the one hand ensuring an integrated and competitive internal market, and on the other hand allowing companies to introduce certain restrictions justified to structure efficient distribution networks and protect their investments[1]. In other words, EU competition law aims to prevent agreements or practices that restrict competition, while recognising that certain vertical agreements may have pro-competitive effects (e.g. distribution improvements) and merit exemptions.
The key references are Article 101 of the Treaty on the Functioning of the EU (TFEU), which prohibits agreements between companies having as their object or effect the restriction of competition[2]and Article 102 TFEU, which prohibits the abuse of a dominant position by a company. In the field of vertical agreements (agreements between undertakings operating at different levels of the distribution chain), the application of Article 101(1) TFEU has been detailed by secondary legislation. In particular, the Regulation (EU) 2022/720 (so-called new VBER - Vertical Block Exemption Regulation) regulates the conditions under which vertical agreements may benefit from an automatic exemption from the antitrust prohibition[3]. To complement this, the EU Commission issued the new Guidelines 2022 on vertical restraints, which provide interpretative criteria for assessing vertical agreements in the light of Article 101 TFEU and the Regulation itself.
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2. The fundamental precedent: the Grundig case (1964).
The modern regulation of vertical agreements is based on the famous Consten & Grundig case (1964)milestone where for the first time a system of absolute territorial exclusivity was judged incompatible with the European single market[4]. In that case, Grundig had granted its French dealer (Consten) total territorial protection, prohibiting sales outside France and in parallel preventing distributors from other countries from selling in France. The Commission (confirmed by the Court of Justice in 1966) declared the illegality of this agreement: the prohibition of the 'closed exclusive'those involving the absolute ban on passive sales outside the territory, as anti-competitive restrictions by object[4][5]. Since then, the principle has applied that clauses granting territorial protection perfect (by preventing passive sales to reserved territories) are prohibited per se under Article 101(1) TFEU, regardless of the concrete effects on the market[5]. This case law precedent laid the foundation for all subsequent regulation of vertical agreements in Europe.
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3. The Block Exemption and Hardcore Restrictions in Vertical Agreements
Regulation (EU) 2022/720 provides for aautomatic exemption (by category) for vertical agreements that fulfil certain conditions. In particular, Article 3 of the regulation establishes a 'safe harbour' antitrust for all vertical agreements in which both the supplier and the buyer do not exceed 30% of market share in the respective relevant market[6]. Within this threshold, the agreement benefits from a presumption of legality as long as does not contain fundamental restrictions competition. This approach follows that of the previous Reg. 330/2010, maintaining the so-called 'safety zone' to 30%[7].
Le fundamental restrictions (also known as hardcore restrictions) are particularly hardcore vertical clauses, which are considered to be capable of causing significant consumer harm. The presence of even one of these hardcore restrictions leads to the exclusion of integral of the agreement from the block exemption and the automatic nullity of the relevant clauses under Article 101(2) TFEU. In practice, if a distribution agreement contains a hardcore restriction, it automatically loses the benefit of the exemption and may be invalid in its entirety (if the illegal clause is not severable from the rest of the agreement). [2] [8] [9]
The hardcore restrictions listed in Article 4 of Regulation 2022/720 include, for example:
- Imposed resale priceThe supplier may not set a minimum or fixed resale price to the distributor (only the setting of a maximum price or a simple non-binding recommendation is permissible). Any form of price fixing vertical (so-called RPM, resale price maintenance) is considered hardcore restriction.
- Territorial or customer restrictions: As a general rule, clauses limiting the geographic area or customer group in which the buyer may resell the goods are prohibited, subject to specific exceptions that allow distribution networks to be organised in a manner consistent with antitrust rules. In an exclusive distribution system, the supplier may reserve a territory or group of customers to one distributor and prohibit the other members of the system from making active sales in that area or to those customers. However, it remains prohibited to prevent passive (that is, unsolicited) sales by other distributors. In contrast, in the selective distribution system, it is permitted to prohibit active and passive sales to unauthorised distributors, even if they are located in other EU Member States. In return, however, cross-selling between authorised members of the system is prohibited. In other words, in the selective system, passive outward sales may be restricted, but not between network members.[4].
- Restrictions on Internet useThe new regulation has expressly innovated on this point, introducing in Art. 4 (e) the general ban on preventing the effective use of the Internet by the purchaser (or its customers) for the sale of the products[8]. This means that the supplier may not adopt measures that directly or indirectly significantly restrict access to the Internet as a sales channel. For example, hardcore violations would be clauses prohibiting the distributor from operating an e-commerce site, from using recognisable online platforms, or other equivalent restrictions that effectively preclude online as a channel[8]. (On the other hand, qualitative conditions on online sales are permissible, as long as they do not amount to a substantial ban on using the Internet).
- Exchange of sensitive information in dual distribution contextsRegulation 2022/720 devotes attention to cases where supplier and purchaser are (also) competitors on the market (so-called dual distribution). Article 2(4) excludes from the automatic exemption vertical agreements between competitors when are not limited to 'genuinely vertical' cooperation. In particular, the 2022 Guidelines clarify that in the dual distribution scenario, an exchange of information that is unnecessary and likely to eliminate competition between the parties - for example, the communication by the distributor to the manufacturer of strategic information on future prices, individual customers, detailed sales, etc., which the producer (competitor) could exploit to its advantage. Such information exchanges entail the risk of horizontal collusion and thus may lead to the loss of exemption [10].
- Non-competition clauses for more than five yearsThe Regulation (Art. 5) lists some excluded restrictionsi.e. clauses which, although not hardcore, do not benefit from the block exemption (but, unlike hardcore, not render the entire contract unlawful if isolated). Chief among these is the non-competition agreement imposed on the purchaser of indefinite duration or more than 5 years. An obligation that binds the distributor not to deal in competing products beyond five years, or without an expiry date, is not covered by the automatic exemption (unless tacitly renewed, allowing the parties to freely renegotiate after five years, with at least six months' notice). Beyond this time limit, the vertical agreement will have to be assessed on a case-by-case basis under Article 101 TFEU, as excessively long non-compete agreements may unjustifiably impede competition.
(Note that the presence of an 'excluded restriction' such as a >5-year non-compete covenant does not invalidate the entire agreement: that clause is simply not block exempted and must be assessed individually. The fundamental restrictions, on the other hand, infect the entire contract, rendering it exempt and void if indispensable). [2] [8] [9]
What has been outlined above constitutes, in summary, the EU regulation of lawful vertical agreements. Typically, in normal distribution contractsclauses such as resale price control, absolute territorial exclusivity, prohibition of online sales, etc., are prohibited as restrictive of competition. However, the situation becomes complicated when we consider a different contractual figure: the agency contract. Agency agreements often contain precisely those same covenants (imposed prices, exclusivity zones, customer limitations) that, between independent suppliers and distributors, would be hardcore prohibited. It is therefore crucial to understand whether and when an agency relationship falls within the definition of a vertical agreement subject to the above rules, or not.
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4. Agency contracts and applicability of Article 101 TFEU.
The crucial question is: can a commercial agency agreement be considered a vertical agreement within the meaning of Regulation 2022/720, and thus subject to the prohibition of Article 101(1) TFEU? The answer has important practical implications, since - as mentioned - it is customary to include price-fixing, territorial exclusivity or customer clauses in agency contractsetc., all restrictions which, if the agency were treated as a normal agreement between independent undertakings, would violate Art. 101(1). In general, however, antitrust law recognises that certain brokerage agreements are not the result of undertakings actually competing with each other, but are part of a single economic centre of interest. In such cases, Article 101 TFEU does not apply at all.
As early as 1962, the EEC Commission, in the so-called 'Christmas Communication'had clarified that trade representation agreements in principle escape the antitrust prohibition if the agent assumes no contractual risk significant (if not the normal insolvency guarantee, the star of belief)[12]. The logic is that when the agent acts only as an auxiliary of the principal - by carrying out instructions and acting in the principal's interest - the agreement "has neither object nor effect". to restrict competition. Indeed, the agent in such a scenario is not an independent economic operator, but an integral part of the principal's commercial organisation.
This principle has been consolidated by a long evolution jurisprudentialIn numerous cases, the Court of Justice has reaffirmed that Article 101 §1 does not apply to commercial agency contracts whether the agent does not assume the commercial and financial risks typical of an independent distributor[13]. In particular, the genuine agent is seen as a 'auxiliary body' part of the principal's enterprise (and thus not as another centre of interests with which to cartel). Conversely, if the agent operates with a degree of autonomy to bear risks or functions similar to those of an independent traderthen the agency agreement is deemed to be fake (not genuine) and should fall under Art. 101.[14].
The fundamental criterion of distinction is therefore risk-taking. As emphasised by both the Court of Justice and the Commission Guidelines, "the determining factor in defining a commercial agency agreement for the purposes of the application of Art. 101(1) is the financial or commercial risk assumed by the agent".[15]. In practice, if the risks associated with contractual activities are substantially borne by the principalwe are faced with a true agency agreement; if, on the other hand, the agent bears significant risks (normally those of a reseller), the agreement may be regarded as an arrangement between separate undertakings and subject to the cartel prohibition[8]. The Commission confirms in the Guidelines that, as a rule, an agreement is considered agency when the agent does not acquire ownership of the goods selling (which remains with the principal) nor does it itself provide the services covered by the contract[8] - situations from which it is inferred that the commercial risk remains with the principal.
But what, concretely, are the risks whose presence turns an agent into a 'fake agent'? The Guidelines of both 2010 and 2022 list a number of illustrative circumstances in which the agent steps out of his or her 'typical' role. Among the risks incompatible with a pure agency include, for instance, when the agent acquires ownership of products (by reselling them later for their own account), participates in supply or logistics costs, maintains inventories at its own cost or risk, assumes liability towards third parties for product defects or damage, personally guarantees customer obligations (risk of insolvency), performs own investments in promotion, infrastructure, personnel, or carries out in parallel competing activities in the same market as the principal. In all these situations the agent is operating with a economic autonomy and an allocation of risk inconsistent with the figure of the 'real' agent for antitrust purposes.
The practical importance of this distinction is obvious: if an agency agreement is qualified as 'false' under antitrust law, it will fall under the prohibition of Art. 101(1). In that case the principal may not impose on the agent those restrictions that it would normally apply (prices, territories, customers, etc.), otherwise it would violate antitrust law. For example, if the intermediary not a real agent in the eyes of Art. 101, the principal may not prohibit him from granting discounts on his commission, nor restrict the area or clientele in which he may operate, nor even prohibit the passive sales outside the assigned area. In summary, the 'fake' agency agreement will be treated as a any vertical agreement between independent undertakingsand therefore subject to all the restrictions and nullities provided for (except possibly falling within the exemption parameters of Reg. 2022/720, such as market share <30% and absence of hardcore clauses).
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5. Novelty and debate: the Commission's criteria and initial considerations.
The new EU Guidelines 2022 confirm the aforementioned risk-based approach, but also introduce modern examples of hybrid forms of intermediation that are blurring the boundary between agency and distribution. An initial analysis shows that many of these situations concern elements not typical of the 'traditional' agent as hitherto known and regulated. We refer to intermediaries who, although contractually qualified as agents, in their operations take on quite different entrepreneurial connotations [15].
It is worth pointing out that some doctrine has expressed misgivings about the criteria set out by the Commission to distinguish true and false agents: according to some, these criteria are sometimes misleading because they are derived from exceptional case law, not representative of the normality of agency relationships. In particular, it is observed that the Commission has borrowed its guidelines from a series of decisions of the Court of Justice relating to peculiar cases, without taking into account the way 'ordinary' agents operate in common cross-border relationships. This could lead - the doctrine warns - to application uncertainties: a national judge or antitrust authority, slavishly applying the Guidelines, would risk classifying as false agent even intermediaries who de facto perform a typical agency activity (at least from a civil law point of view). In other words, there is a fear that overly strict criteria could bring genuine agency contracts under Article 101, creating 'false positives' antitrust. This criticism therefore calls for caution and practical sense in the case-by-case analysis, considering substantive economic reality as well as contractual formulae.
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6. When the agent not is really an agent: practical examples.
To further clarify the boundary, the Commission provided in its Guidelines some concrete examples of situations in which an intermediary, though called an agent, cannot be considered as such for antitrust purposes. These cases reflect developments in today's market and help to identify 'at risk' scenarios of false agency[16]:
- Agent-distributor: an intermediary who, in addition to acting as an agent for a principal, carries out in parallel activities of independent distributor of other products in the same sector. In this case it is impossible to clearly separate costs and risks associated with the two activities. The agent ends up behaving in part like a normal reseller (for the product lines he buys and resells on his own), and this also contaminates the agency relationship: from a competitive point of view, such an operator will not be able to benefit from the exemption reserved for the pure agent, as he inevitably bears certain entrepreneurial risks.
- Hybrid' online platformsIn the context of the digital economy, many intermediation platforms (e.g. marketplaces, booking portals, etc.) support large market-specific investments - software development and maintenance, advertising and promotional services, customer care and returns management - and at the same time take on significant financial or commercial risks linked to sales performance[42]. These online platforms who act as intermediaries between sellers and buyers, but invest their own resources and actively influence the market, can hardly qualify as genuine agents. Their economic position is more akin to that of independent operators (or co-distributors) rather than mere auxiliaries of the supplier, especially if the platform simultaneously deals in the products of its competitors or promotes its own services by competing with the suppliers it hosts.
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7. The new agency figures. The influencer and the 'online' agent.
Influencer' agentOne figure that has recently emerged is that of thecommercial influencer who promotes products on social media on behalf of a company. Although he or she may be contractually framed as an agent (providing customers to the principal in exchange for a commission), an influencer typically incurs own expenses (e.g. for photo shoots, video editing, support staff), decides independently how to present and advertise the product (tone, content, channels and timing of communication) and manage the relationship with followers/potential customers without binding directives of the principal. In essence, the influencer exercises a creative and entrepreneurial activity to promote sales, assuming the risk of success: a far cry from the classical agent who carries out instructions. It is therefore legitimate to ask whether, in certain cases, where the influencer has broad bargaining power - such as to enable him to decide almost autonomously on sales strategies and the positioning of products on the market, including prices - he can really qualify as agent for antitrust law purposes, or whether instead its role should be framed as an autonomous form of commercial collaboration, thus subject to the application of Article 101 TFEU.
This is, in all evidence, a conceptual rather than practical exercise, aimed at understanding how new professional figures can progressively fit into traditional distribution models. It remains firm that, in this evolutionary process, antitrust law will also be destined to play an important role, acting as a parameter of compatibility of the new contractual models with the rules of the internal market.
Agent operating via own e-commerceFinally, consider the case of an agent to whom the principal entrusts the sale in a certain area, but without binding him on the modalities - and the agent decides to directly organise a e-shop or to use online platforms third parties (such as Amazon, eBay, Etsy, Farfetch, etc.) to sell the principal's products. In this scenario, the agent manages theonline account, sets the retail prices, decides on the digital commercial strategy and delivery logistics, all without stringent operational control by the principal. In fact, the agent behaves like an independent trader who uses online channels to place products: although formally an agent, he or she is assuming business risk (e.g. unsold risk, online reputation, customer feedback) and a margin of autonomy that is incompatible with the status of an 'auxiliary body' of the principal. In a future antitrust assessment, such agents are likely to 'digital' are considered fakes agents.
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8. Conclusions.
Ultimately, the figure of the commercial agent represents a contractual unicum in antitrust law: when the agent is genuinely integrated into the principal's sphere - i.e. does not assume significant financial or commercial risks - the agreement between the parties escapes the application of Article 101 TFEU. In such cases, which constitute the vast majority of concrete hypothesesthe principal may legitimately impose contractual conditions otherwise prohibited in relations between independent undertakings, such as fixing resale prices, granting territorial exclusivity or prohibiting active sales.
However, the market developments and today's distribution models show that not all agency relationships exhibit the characteristics of the 'typical' agent considered so far. Some forms of intermediation - from online platforms to influencers to dual-role agents - might dragging the contract out of the protected area reserved for genuine agents, ensuring that such reports are evaluated as agreements between independent undertakings. In the future, it is therefore plausible that certain types of agency are considered 'fake' from an antitrust perspectivelosing immunity and falling under Article 101.
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[1] [4] [5] Parallel Sales. When can they be blocked?
[6] Exemptions for vertical supply and distribution agreements (as of 2022)
[7] Market shares in the sales concession and antitrust
[8] Online sales distribution contracts and antitrust
[9] Communication 101 of 27.4.2004
[10] Information exchange and dual distribution: antitrust implications in distribution contracts
[11] Agency Contract and Antitrust Law. An Overview
[13] Suiker Unie - Judgment of 16-12-1975 - Joined Cases 40-18, 50, 54-56, 111, 113 AND 114-73
[14] DaimlerChrysler v Commission, Judgment 15. 9. 2005 - Case T-325/01
[15] Guidelines on Vertical Restraints - Commission 2022
[16] Communication from the Commission - Guidelines on Vertical Restraints (2022/C 248/01)