''Consten SaRL and Grundig GmbH v Commission'' (1966
Case 56/64
is an

EU competition law European competition law is the competition law in use within the European Union. It promotes the maintenance of competition within the European Single Market by regulating anti-competitive conduct by companies to ensure that they do not crea ...

case, concerning vertical anti-competitive agreements.

The Treaty provisions

* Art 101(1): The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market. * Art 101(2): Any agreements or decisions prohibited pursuant to this section shall be automatically void. * Art 101(3): ''This subsection gives a list of derogations (or exceptions)''.The relevant articles were originally numbered 85 & 86, then 81 & 82, and finally 101 & 102.

Facts

Grundig GmbH contracted to distribute its electronic goods in France, and appointed Consten SaRL as its exclusive distributor. Grundig guaranteed that no other wholesaler would be allowed to distribute in France, and that, for the purposes of the distribution of Grundig products, Consten was given sole authority to use the Grundig name and emblems which are registered in Germany and in other Member States A third-party company, UNEF, bought Grundig products in Germany and began distributing "

grey import A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, a ...

s" into France, whereupon Consten and Grundig sought to prevent UNEF from doing so, claiming, ''inter alia'', that UNEF was abusing Grundig's copyright in its own trade name and logos. The Commission viewed Consten's and Grundig's action against UNEF as an unlawful breach of Article 85 of the Treaty of Rome (now Art 101 of the

TFEU The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishi ...

), as it was important to ensure that competing parallel imports from one state to another were unhindered. The case was referred for a

Preliminary Ruling A preliminary ruling is a decision of the European Court of Justice (ECJ) on the interpretation of European Union law that is given in response to a request (preliminary reference) from a court or a tribunal of a member state. A preliminary rulin ...

to the European Court of Justice under Article 177.

Judgment

Agreeing with the Commission, 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.

Notes

References

* European Union Law: Text Cases & Materials - Tillotson, John European Union competition case law 1966 in case law 1966 in the European Economic Community {{Europe-law-stub

The Treaty provisions

Facts

Judgment

See also

Notes

References