I.- INTRODUCTION
This article contains a brief analysis of the treatment given by the Spanish Supreme Court during recent years to the phenomenon of price fixing in so-called “supply contracts under a brand name”.
It should be noted that this type of contract is an example of contracts known as “vertical distribution agreements” (purchase and sale agreements for goods or services signed between companies which operate on different levels of the production or distribution line) which are subject to the European Union Competition Law regulated in articles 101 onwards of the Treaty on the functioning of the European Union (“TEU”), the former article 81 of the European Community Treaty.
II.- EXCLUSIVE PETROL SUPPLY CONTRACT UNDER A BRAND NAME – CONCEPTS AND CATEGORIES
An exclusive supply contract under a brand name is an agreement which establishes a commercial relationship between two independent companies: on one hand, the owner of the petrol station and, on the other hand, the petrol company which supplies fuel and undertakes, on a continuous basis, to lend the “brand name” to the petrol station with its trademark and commercial image. Normally, the petrol company also commits itself to providing technical and commercial assistance to the petrol station operator, who in turn often commits to the exclusive purchase of fuel from the petrol company. Therefore, it is a matter of a complex contract of a much-discussed nature, in so far as both doctrine and case law.
Financially, an exclusive supply contract under a brand name may either be structured as an agency relationship (the petrol station owner taking on the role of an agent and his income being a type of “sales commission”), or as a distribution relationship (in this case the petrol station owner is a distributor and earnings are derived from the “resale” of the fuel).
In principle, agency contracts are not subject to the European Union Competition Law, as these regulations refer expressly to the exclusive purchase contracts undertaken between a supplier and a reseller, and not to agreements between a principal and an agent or commission-agent so that the latter may commercialise the products object to the exclusive supply in the name and on behalf of the principal. Nevertheless, sections 12 to 21 of the Guidelines on Vertical Restraints of the European Commission (2010/C 130/01) establish that if the agent assumes certain commercial and / or financial risks the agency contract shall not have a genuine character and, therefore, shall also be subject to the aforementioned article 101 of the TEU.
The list of circumstances established in the above Guidelines for determining whether an agency contract is genuine is not exhaustive and, particularly in the field of fuel distribution, it has been completed in recent years by the interpretation carried out by the European Court of Justice (judgements of 14th December 2006, 11th September 2008 and 2nd April 2009) and by the Spanish Supreme Court (judgements of 15th January 2010, 11th May 2011 and 1st September 2011). In short, only when the risks assumed by the petrol station owner are “significant” (exclusive supply, assumption of the obligation to conserve the fuel and the risk of non-payment, cash payment for the fuel upon ordering from the petrol company, etc) shall the agency relation be understood to be non-genuine and therefore should be submitted to the European Union Competition Law.
III.- EXCLUSIVE PETROL SUPPLY CONTRACT UNDER A BRAND NAME – PRICE FIXING
In recent years, the Supreme Court has become aware of an important number of issues regarding exclusive supply contracts under a brand name (either as a distribution contract, or as a non-genuine agency contract) in which the petrol station owner alleged infringement of the European Union Competition Law due to the supposed price fixing on the part of the petrol company.
Although at first the Supreme Court maintained a very strict posture in judgements of 20th November 2008 and 15th April 2009, the criterion was clarified following judgement of 15th January 2010. In this last judgement, the Supreme Court, following the guideline set forth by the European Union Court of Justice in its judgements of 11th September 2008 and 2nd April 2009, established that clauses relative to retail prices may have recourse to a block exemption provided for in Commission Regulation (EEC) No 1984/83 if the supplier restricts itself to imposing a maximum selling price or to recommending a selling price and the reseller has a real possibility of determining the final retail price. The recent judgements of the Supreme Court of 10th July and 20th July and 24th October 2012 have ratified this posture.
IV.- CONCLUSION
During recent years and in the light of the case law resulting from the European Court of Justice, the Spanish Supreme Court has progressively clarified its strict criterion. The new line commencing with the judgement of 15th January 2010 has been repeatedly confirmed in the last two years, so that currently the indication of a maximum or recommended retail price is considered to be a permitted practice providing that the contract in question effectively allows the petrol station owner to sell fuel to the end user at a different price to that indicated by the petrol company.
Vilá Abogados
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25th of January 2013
