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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asked by
Rooooooooo
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Social Science
➔ Economics
/edit: I just read that last sentence again and I'm guessing that its probably "dear economists" and not "dear economics"... English is not my mothertongue. Don't let this edit distract you from the question and thanks to the person that answered allready ;-)
2007-12-01
08:48:44 ·
update #1