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al and E[ cEoxncolmusiicvAelvyanftogra:rdLee&S#C2 43;n Ricardo Elizondo | 23-Apr-15, 04:38 PM ] ©Getting The Deal Through MEXICO

31 How is restricting the buyer’s ability to generate or effect sales amendment of 10 May 2011, a new concept was included to evaluate RMP.
via the internet assessed? Specifically, it allows in articles 13 and 13-bis the consideration of whether
a group of independent economic agents, competitors to each other, if by
There has been no precedent regarding this particular issue. But again, it acting in a coordinated way (‘tacit collusion’) might have joint or collective
is always a matter of a supplier’s ability to justify a restriction according to substantial market power, so that their commercial practices could infringe
its business model. If the supplier has market power, it is more likely to be the Competition Law. Regulations and criteria for the application of this
found liable for engaging in illegal or restrictive conduct. concept are still pending.

32 Have decisions or guidelines on vertical restraints dealt in 38 Has the authority taken decisions (or is there guidance)
any way with the differential treatment of different types of concerning distribution arrangements that combine selective
internet sales channel? distribution with restrictions on the territory into which
approved buyers may resell the contract products?
No precedents have been produced by the Commission to date. However,
with the recent creation of IFT, it is reasonable to expect that some deci- No precedents concerning this issue have yet been produced by the
sions or guidelines will be issued applicable to broadcasting and telecom- Commission; however, see question 33.
munications activities, including vertical restraints relating to the internet.
39 How is restricting the buyer’s ability to obtain the supplier’s
33 Briefly explain how agreements establishing ‘selective’ products from alternative sources assessed?
distribution systems are assessed. Must the criteria for
selection be published? If all the elements required for engaging in an RMP are met, then it may
be assessed as exclusive dealing conduct, provided that it is demonstrated
A very well-grounded explanation must be given to support the legality that the aim or effect of the restriction is the improper exclusion of other
of a ‘selective’ distribution system, such as keeping strict quality levels, agents from the market; substantial hindrance of agent access to the mar-
highly sensitive confidentiality levels, economic or financial soundness, ket; or the establishment of exclusive advantages in favour of one or sev-
high-tech or specialisation, among others. Otherwise it would be very easy eral entities or individuals.
to find members liable for having the aim or effect of improperly exclud-
ing other agents from the market; substantially preventing others from 40 How is restricting the buyer’s ability to sell non-competing
accessing to the market; or establishing exclusive advantages in favour of products that the supplier deems ‘inappropriate’ assessed?
one or several entities or individuals. Irrespective of the fact that the sys-
tem may be deemed an entry barrier, when it comes to demonstration of Such a restriction would require a large amount of justification, as it would
market power, it will not be a problem since, according to a Competition be very unlikely that a non-competing product could affect the supplier’s
Law amendment dated 10 May 2011, a new concept was included to evalu- product. Therefore, ‘inappropriate’ should be very well grounded in
ate RMP. Specifically, it allows in articles 13 and 13-bis the consideration arguments demonstrating a real conflict in image, reputation or similar.
of whether a group of independent economic agents, competitors to each Otherwise, if the supplier has market power the restriction could be con-
other, if acting in a coordinated way (‘tacit collusion’) might have joint or sidered as illegal exclusivity aimed at improperly excluding other agents
collective substantial market power, so that their commercial practices from the market; substantially preventing others access to the market; or
could infringe the Competition Law. Regulations and criteria for the appli- establishing exclusive advantages in favour of one or several entities or
cation of this concept are still pending. individuals.

The more that transparency and publicity are given as to the require- 41 Explain how restricting the buyer’s ability to stock products
ments for becoming a member or excluding current or potential members competing with those supplied by the supplier under the
may mitigate the risk of considering the system illegal. agreement is assessed.

34 Are selective distribution systems more likely to be lawful Again, if the supplier has market power the restriction could be considered
where they relate to certain types of product? If so, which as illegal exclusivity aimed at improperly excluding other agents from the
types of product and why? market; substantially preventing others access to the market; or establish-
ing exclusive advantages in favour of one or several entities or individu-
Consistent with question 33, if the products or services do not involve strict als. If it is clearly demonstrated, for instance, that a ‘free ride’ is occurring
quality levels, highly sensitive confidentiality levels, economic or financial where the buyer is using the supplier’s equipment, systems, software, facil-
soundness, high-tech or specialisation, among others, the system is more ities or infrastructure to market, promote or exhibit competing products,
likely to be found illegal. this may be a valid defence.

35 In selective distribution systems, what kinds of restrictions 42 How is requiring the buyer to purchase from the supplier
on internet sales by approved distributors are permitted and a certain amount or minimum percentage of the contract
in what circumstances? To what extent must internet sales products or a full range of the supplier’s products assessed?
criteria mirror offline sales criteria?
This conduct may be considered as a tying arrangement if the buyer does
No precedents concerning this issue have yet been produced by the not need the minimum amount or percentage, or the full range of prod-
Commission; however, with the recent creation of IFT, it is reasonable to ucts, and on the other hand the supplier does not validly justify such a
expect that some decisions or guidelines will be issued applicable to broad- requirement. For instance, if experience has shown that unless the buyer
casting and telecommunications activities, including vertical restraints has a minimum stock there is a risk of facing a shortage, leaving a client or
relating to the internet. customer unsatisfied, then it may sound reasonable, or if the full range of
products are complementary, or accessories of one another, and customers
36 Has the authority taken any decisions in relation to actions normally demand two or three of them simultaneously. But again market
by suppliers to enforce the terms of selective distribution power as well as an undue purpose or effect must be present for the situa-
agreements where such actions are aimed at preventing sales tion to be considered illegal.
by unauthorised buyers or sales by authorised buyers in an
unauthorised manner? 43 Explain how restricting the supplier’s ability to supply to
other buyers is assessed.
No precedents concerning this issue have yet been produced by the
Commission. This is a mirror version of exclusive dealing, but upstream, where the buyer
would have market power in order to affect competition and force the sup-
37 Does the relevant authority take into account the possible plier to accept such a restriction. But again all the requirements for an RMP
cumulative restrictive effects of multiple selective must be met.
distribution systems operating in the same market?

As mentioned before, irrespective of the fact that the system may be
deemed by itself an entry barrier, when it comes to demonstration of mar-
ket power, it will not be a problem since, according to the Competition Law

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