The situation
A draft exclusive distribution agreement, uploaded
A Bavarian maker of climbing equipment wants to appoint a distributor in Innsbruck as its exclusive distributor for Austria. The draft, written by the sales team, sets minimum resale prices, bans selling through online marketplaces and the distributor’s own shop, forbids any sales into Germany and binds the distributor to a seven-year non-compete.
The client wants it signed this month. Your job is a note that sorts the clauses into those the block exemption covers, those that take the whole agreement out of it and those that simply fall away, with a redraft for each problem. The hours go on the guidelines and on getting the redrafts right.
What the research has to settle
The rules behind the answer
- The exemption has a market-share ceiling
- Regulation (EU) 2022/720 exempts vertical agreements where neither the supplier nor the buyer holds more than 30% of the relevant market. Above that, the agreement needs an individual assessment.
- Hardcore restrictions sink the whole agreement
- Fixing minimum or fixed resale prices is a hardcore restriction. So is preventing the buyer’s effective use of the internet to sell. Either removes the benefit of the block exemption from the entire agreement, not just the clause.
- Active sales can be restricted, passive sales cannot
- A supplier may stop the distributor from actively selling into a territory it has reserved to itself or allocated exclusively to others. A ban on passive sales, such as answering unsolicited orders from German customers, is generally hardcore.
- Non-competes over five years fall away
- A non-compete for more than five years, or tacitly renewable beyond five years, is not exempted. It is an excluded restriction: the clause loses the exemption, the rest of the agreement keeps it.
How it runs in azta
From the question to the document
The question, as you would type it
Exclusive distribution agreement, German supplier, Austrian distributor, market shares well under 30%. Clauses: minimum resale prices, ban on all online sales, ban on any sales into Germany, seven-year non-compete. How does each clause fare under Regulation 2022/720, and how should we redraft them?
You start with
A draft exclusive distribution agreement, uploaded
- 01
Upload the draft
Add the agreement and any side letters. azta reads them and refers back to the clause it relied on.
File upload· Pro - 02
Check each restriction
Ask how each clause fares under the block exemption. azta cites the Regulation, the Court of Justice and the German and Austrian competition acts.
Cited research· Free - 03
Write the note with redrafts
Ask for a table of restrictions, their status and a compliant redraft. Edit it in Canvas and turn the conclusions into a short email for the sales director.
Canvas · Ask azta· Pro - 04
Send the redrafted clauses as Word
Export the note and the redrafts to Word for the client and the distributor’s counsel.
Word export· Pro You send
A note sorting each restriction under the block exemption, with proposed redrafts
What you get
A note sorting each restriction under the block exemption, with proposed redrafts
Competition note · draft
Distribution agreement for Austria: restrictions under the block exemption
Summary. Two clauses would take the whole agreement outside the block exemption: the minimum resale prices in clause 6 and the general ban on online sales in clause 9. Both must go before signature.
Sales into Germany, clause 8. You may prohibit the distributor from actively targeting customers in Germany, which you reserve to yourselves. You may not stop it from answering orders that German customers place unprompted. We have redrafted the clause on that line.
Non-compete, clause 12. Seven years exceeds the five-year limit. The clause would not be enforceable as drafted, though the agreement would otherwise remain exempt. We propose five years with no automatic renewal.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
8 minutes a month
At €230 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 36
- Capacity at your rate
- €8,280
- More competition checks on distribution agreements a quarter
- 1.5
- Return on Pro
- 25.6×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoWhat stays with you
- Defining the relevant market and confirming the market shares with the client.
- The commercial trade-offs in the redrafts.
- The advice and the sign-off.
Frequently asked questions
- Does azta hold the Commission’s Vertical Guidelines?
- azta holds EU law, including the Regulation, and the Court of Justice’s case law. Name the guidelines in your question and check the answer’s citations to see which sources it drew on.
- Can it assess our client’s market share?
- No. Market definition and shares depend on facts only the client and its data hold. azta explains the test and what evidence supports it.
- Does it cover national competition law too?
- Yes. It researches the German and Austrian competition acts alongside EU law, so the note can say where national rules add anything.
