Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory?

In this Q&A we are referring to restrictions on sales into territories within EEA.

Agreements between companies operating at different levels in the supply chain are often called ‘vertical agreements’. Vertical agreements may also be described as distribution agreements, although this does not reflect their full range and diversity. However, certain types of distribution arrangement may be prohibited under competition law, some examples of which include:

1. •

   exclusive distribution—where the supplier agrees to sell to only one distributor for resale in a particular territory (see Practice Note: Competition law and exclusive distribution agreements)

2. •

   selective distribution—where the supplier agrees to supply only specified approved distributors, who in return agree to sell on only to other approved distributors and end users (see Practice Note: EU competition law and selective distribution)

3. •

   exclusive customer allocation—where the supplier agrees to sell to each distributor for resale only to an exclusive class of customers