Chillin'Competition

This month’s issue of World Competition comes with a short piece of mine (the submitted version of which is available on ssrn here) on resale price maintenance in the aftermath of Super Bock.

I thought it interesting to say a word on it, since it is, I feel, one of these rulings that is only fully appreciated when read in conjunction with developments at the national level. Those of you who read Portuguese might want to take a look, in particular, at the judgment of the Tribunal da Relação de Lisboa following the preliminary ruling.

How does Super Bock change or refine our understanding of Article 101(1) TFEU? Prior to this judgment, resale price maintenance was considered to be restrictive of competition always and everywhere (that is, without the need to consider the relevant economic and legal context and without the need to take into account the aims pursued by the parties).

In Binon, in fact, the Court expressly dismissed the relevance of any contextual considerations when vertical price-fixing is at stake. Such an approach to the assessment of restrictions of competition was, unsurprisingly, the one followed by the Portuguese first-instance court in Super Bock.

The problem? Binon is at odds with subsequent case law, which has in turn been consistently followed by the Court in the past decade. The significance of Super Bock lies precisely in the fact that it addresses this friction and makes it explicit that the orthodox framework is also extensive to resale price maintenance.

Thus, resale price maintenance is no longer the ‘odd one out’ in the aftermath of Super Bock. Whether or not this practice restricts competition by its very nature depends on an analysis of the content of the agreement, its aims and the economic and legal context of which it is a part. The analysis, in other words, is not formalistic, but context-specific.

The impact of the preliminary ruling in Super Bock is best appreciated in light of the judgment of the Tribunal da Relação de Lisboa, which ruled on appeal in the national dispute. Following the guidance of the Court of Justice, the Tribunal found that the first-instance court had erred in law by following the Binon approach and meticuously ascertained the object of the practice in light of the factors identified in the case law.

The main lesson to draw from Super Bock is that resale price maintenance may not always restrict competition by object. It is not difficult to think of scenarios where the practice pursues a ‘legitimate aim’ within the meaning of the case law and might therefore not be caught, in and of itself, by Article 101(1) TFEU. Whether these hypotheticals will find their way in concrete cases is, alas, a different story.