In European competition law, vertical agreements which have the purpose or effect of partitioning a distribution network by customer or by territory, are illegal. One of the exceptions to that rule is that you can restrict a wholesaler from selling to end-users. (This is when your market share is below 30%, if not an individual analysis is needed.)
Why would a producer want to impose such a restriction on its wholesalers? And why are competition authorities ok with that? In other words, what are the economical benefits/procompetitive effects of such a restriction? And are there any negative effects?
Dear economics, if you know the answer (or an answer), please reply. Thanks in advance!
2007-12-01
07:12:51
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2 answers
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Rooooooooo
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