All distribution agreements are potentially contrary to EU competition law and UK competition law. Designated distributors should carefully consider the type of agreements they wish to enter into and possibly ensure that they are covered by an appropriate de minimis exemption or other specific exemption. (a) non-disclosure and non-use obligations. Unless pre-derogation, in writing by the unveiling party or to the extent expressly authorized by this agreement, the receiving party, unless prescribed by law or by law, will not be used or disclosed to third parties for the duration and duration of a period of [insert number in words] ([insert number]) of subsequent years. The receptive party may not disclose confidential information to the party who has disclosed it only to its staff members or contractors who are required to know this information. In addition, before disclosing this confidential information to such an employee or contractor, this staff member or contractor is informed of the confidentiality of the confidential information and establishes or is already bound by a confidentiality agreement with conditions that are in accordance with the terms set out in this agreement. In all cases, the receiving party is liable for any violation of the terms of this contract by any of its employees or contractors. The receiving party uses the same care to avoid disclosing the confidential information of the party that has published the information that the receiving party uses for its own confidential information of similar importance, but no less than an appropriate degree of care. There is an exemption by European category (Regulation 330/2010) for vertical agreements, for example. B between a supplier and a distributor. On the basis of this exemption, vertical agreements are exempt from the prohibition of cartels, provided that the conditions set out in the exemption are met. In this way, the regulation provides a safe haven for suppliers and distributors to benefit from.
One of the preconditions for granting the category exemption is that a distribution agreement between the supplier and the distributor does not contain any provision that seriously harms competition. These types of restrictive provisions are also referred to as “strict restrictions.” Absolute territorial protection is such a “hardcore restriction.” Therefore, the direct consequence of the allocation of absolute protection of the territory in an agreement is that the whole agreement does not benefit from the safe harbor. The entire agreement will then be subject to the no-agreement test. In general, the element of the agreement, which contains a “characterized restriction,” is quickly considered by the courts and competition authorities to be incompatible with the prohibition of cartels. This element is therefore not valid and cannot be applied. In addition, heavy fines can be imposed on the supplier and distributor, as well as the directors involved.