Consten SaRL and Grundig GmbH v Commission
| Consten SaRL and Grundig GmbH v Commission | |
|---|---|
 | |
| Court | European Court of Justice |
| Citation(s) | (1966) Case 56/64 and 58/64, [1966] ECR 299 |
| Keywords | |
| Competition, collusion | |
Consten SaRL and Grundig GmbH v Commission (1966) Case 56/64 is an EU competition law case, concerning vertical anti-competitive agreements.
Facts
Grundig GmbH wished to distribute electronic goods in France. It appointed Consten SaRL as the exclusive distributor, and guaranteed that no other wholesaler would be allowed to sell in France. The Commission viewed this as unlawful, as it was important to ensure that there were parallel imports (from one state to another).
Judgment
The ECJ held that the agreement was unlawful. It rejected the argument that allowing exclusive distributorships protected a distributor’s legitimate interest, by hypothetically preventing competitors (once the costs for initial market penetration had been spent) from free riding on the investment of advertising and marketing initially by the distributor, and then undercutting prices.
| “ | 8. [...] An agreement between producer and distributor which might tend to restore the national divisions in trade between Member States might be such as to frustrate the most fundamental objectives of the Community. The Treaty, whose preamble and content aim at abolishing the barriers between States, and which in several provisions gives evidence of a stern attitude with regard to their reappearance, could not allow undertakings to reconstruct such barriers. | ” |