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Higher Regional Court Düsseldorf: Prices in distribution - not every discussion is a threat of disad-vantages, delivery block due to sales prices

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Germany

According to antitrust law principles, suppliers are prohibited from imposing resale prices on their retailer. German law is particularly strict, also in the interpretation by the Federal Cartel Office (BKartA). Any form of pressure (including the granting of advantages) not to reduce prices below a certain level is viewed critically.

The Higher Regional Court has now clarified that not every discussion of the resale price is critical. Even a termination of the supply relationship by the supplier due to the fact that the retailer's sell-ing prices do not meet his expectations is permissible, according to the Higher Regional Court. But beware: the threat of non-supply to force a certain price level is illegal.


Background RRP

Suppliers are not allowed to dictate their selling prices to the retailers they supply (Section 1 ARC). This refers to both minimum prices and fixed prices. Price components, surcharges and discounts are also included.

The imposition of an RRP is generally permissible. However, if an RRP is linked to the exertion of pressure, this is critical. Under German antitrust law, not only the agreement on the retailer's sell-ing price is inadmissible. This also applies to the exertion of pressure on part of the retailer (Section 21 (2) ARC).

In its decision on CIBA in 2009, the BKartA had stated that "Any contact that goes beyond the mere transmission of the RRP and adds emphasis to it through subsequent and renewed discussion - in particular with regard to the retailer's previous price-setting behaviour - calls into question its non-binding nature and, in the opinion of the decision department, must be regarded as pressure in this sense."

In 2012 the Court of Appeal (KG Berlin, 02.02.2012 - 2 U 2/06 Kart) had followed the decision prac-tice of the BKartA, according to which it should be sufficient for the supplier to exert inadmissible pressure within the meaning of Section 21 (2) ARC that, in addition to communicating its non-binding target prices, it contacts its customers and seeks to discuss their pricing. The BGH had ex-pressly left this open in the case (BGH, 6.11.2012 - KZR 13/12, para. 5 f.).


Decision of the Higher Regional Court

In a recent decision of the Düsseldorf Higher Regional Court (08.07.2020 - VI-U (Kart) 3/20), the court made it clear that not every discussion or exchange with regard to pricing is contrary to cartel law: "It is correct that … not every discussion or exchange with regard to the pricing of the latter can be assumed to have an effect on the freedom of will and decision of the company addressed which is prohibited under cartel law."

The supplier's behaviour is therefore only critical if the retailer is allowed to understand that he is expected to behave in a certain way with regard to prices and that he will be disadvantaged if he refuses such behaviour. A communication, for example in the form of an urgent "advice" not to continue the cooperation with reference to the retailer's pricing policy, is critical in this respect.
 
By contrast, it is uncritical of the final termination of supply, if only because of the retailer's prices. According to the Düsseldorf Higher Regional Court, there is no element of pressure on the retailer's future sales prices: "Section 21 (2) of the ARC does not therefore prevent a manufacturer from blocking a retailer because the sales prices do not correspond to the manufacturer's expectations, if this does not at the same time induce the blocked retailer to act in the manufacturer's future inter-ests, but the block is intended to be final."

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Areas of Expertise

Antitrust