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Argentina -
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Uruguay
The Milestone EU-Mercosur Trade Deal
9 diciembre 2024
- Contratos de distribución
- Inversiones extranjeras
- Derecho Fiscal y Tributario
“This agreement is not just an economic opportunity. It is a political necessity.” In the current geopolitical context of growing protectionism and significant regional conflicts, Ursula von der Leyen’s statement says a lot.
Even though there is still a long way to go before the agreement is approved internally in each bloc and comes into force, the milestone is highly significant. It took 25 years from the start of negotiations between Mercosur and the European Union to reach a consensus text. The impacts will be considerable. Together, the blocs represent a GDP of over 22 trillion dollars, and are home to over 700 million people.
Our aim here is to highlight, in a simplified manner, the most important information about the agreement’s content and its progress, which we will update here at each stage.
What is it?
The agreement was signed as a trade treaty, with the main goal of reducing import and export tariffs, eliminating bureaucratic barriers, and facilitating trade between Mercosur countries and European Union members. Additionally, the pact includes commitments in areas such as sustainability, labor rights, technological cooperation, and environmental protection.
Mercosur (Southern Common Market) is an economic bloc created in 1991 by Brazil, Argentina, Paraguay, and Uruguay. Now, Bolivia and Chile participate as associated members, accessing some trade agreements, but not fully integrated into the common market. On the other hand, the European Union, with its 27 members (20 of which have adopted the common currency), is a broader union with greater economic and social integration compared to Mercosur.
What does the EU Mercosur agreement include?
Trade in goods:
- Reduction or elimination of tariffs on products traded between the blocs, such as meat, grains, fruits, automobiles, wines, and dairy products (the expected reduction will affect over 90% of the traded goods between the blocks).
- Easier access to European high-tech and industrialized products.
Trade in services:
- Expands access to financial services, telecommunications, transportation, and consulting for businesses in both blocs.
Movement of people:
- Provides facilities for temporary visas for qualified workers, such as technology professionals and engineers, promoting talent exchange.
- Encourages educational and cultural cooperation programs.
Sustainability and environment:
- Includes commitments to combat deforestation and meet the goals of the Paris Agreement on climate change.
- Provides penalties for violations of environmental standards.
Intellectual property and regulations:
- Protects geographical indications for European cheese, wines, and South American coffee and cachaça.
- Harmonizes regulatory standards to reduce bureaucracy and avoid technical barriers.
Labor rights:
- Commitment to decent working conditions and compliance with International Labor Organization (ILO) standards.
Which benefits to expect?
- Access to new markets: Mercosur companies will have easier access to the European market, which has more than 450 million consumers, while European products will become more competitive in South America.
- Costs reduction: The elimination or reduction of tariffs could lower the prices of products such as wines, cheese, and automobiles and boost South American exports of meat, grains, and fruits.
- Strengthened diplomatic relations: The agreement symbolizes a bridge of cooperation between two regions historically connected by cultural and economic ties.
What’s next?
The signing is only the first step. For the agreement to come into force, it must be ratified by both blocs, and the approval process is quite distinct between them, since Mercosur does not have a common Council or Parliament.
In the European Union, the ratification process involves multiple institutional steps:
- Council of the European Union: Ministers from the member states will discuss and approve the text of the agreement. This step is crucial, as each country has representation and may raise specific national concerns.
- European Parliament: After approval by the Council, the European Parliament, composed of elected deputies, votes to ratify the agreement. The debate at this stage may include environmental, social, and economic impacts.
- National Parliaments: In cases where the agreement affects shared competencies between the bloc and member states (such as environmental regulations), it must also be approved by the parliaments of each member country. This can be challenging, given that countries like France and Ireland have already expressed specific concerns about agricultural and environmental issues.
In Mercosur, the approval depends on each member country:
- National Congresses: The agreement text is submitted to the parliaments of Brazil, Argentina, Paraguay, and Uruguay. Each congress evaluates independently, and approval depends on the political majority in each country.
- Political Context: Mercosur countries have diverse political realities. In Brazil, for example, environmental issues can spark heated debates, while in Argentina, the impact on agricultural competitiveness may be the focus of discussion.
- Regional Coordination: Even after national approval, it is necessary to ensure that all Mercosur members ratify the agreement, as the bloc acts as a single negotiating entity.
Stay tuned: you will find the update here as the processes advance.
When selling health-related products, the question frequently arises as to which product category, and therefore which regulatory regime, they fall under. This question often arises when distinguishing between food supplements and medicinal products. But in other constellations, too, difficult questions of demarcation arise, which must be answered with a view to legally compliant marketing.
In a highly interesting case, the Administrative Court (Verwaltungsgericht) of Düsseldorf, Germany, recently had to classify a CBD-containing (Cannabidiol) mouth spray that was explicitly advertised by its manufacturer as a “cosmetic” and therefore not suitable for human consumption. The Ingredients of the product were labelled: « Cannabis sativa seed oil, cannabidiol from cannabis extract, tincture or resin, cannabis sativa leaf extract ».
The Product is additionally also labelled as follows: “Cosmetic oral care spray with hemp leaf extract. » The Instructions for use are: « Spray a maximum of 3 sprays a day into the mouth as desired. Spit out after 30 seconds and do not swallow. »
A spray of the Product contains 10 mg CBD. This results in a maximum daily dose of 30 mg CBD as specified by the company.
At the same time, however, it was pointed out that the “consumption” of a spray shot was harmless to health.
The mouth spray could therefore be consumed like a food, but was declared as a “cosmetic”. This is precisely where the court had to examine whether the prohibition order based on food law was lawful.
For the definition of cosmetic products Article 2 sentence 4 lit. e) Regulation (EC) No. 178/2002 refers to Directive 76/768/EEC. This was replaced by Regulation (EC) No. 1223/2009. Cosmetic products are defined in Article 2(1)(a) as follows: “‘cosmetic product’ means any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours ”.
Here too, it is not the composition of the product that is decisive, but its intended purpose, which is to be determined on the basis of objective criteria according to general public opinion based on concrete evidence.
According to the system of Regulation (EC) No. 178/2002, Article 2 sentence 1 first defines foodstuffs in general and then excludes cosmetic products under sentence 4 lit. e). According to the definition in Regulation (EC) No. 1223/2009, cosmetic products must have an exclusive or at least predominant cosmetic purpose. It can be concluded from this system that the exclusivity or predominance must be positively established. If it is not possible to determine which purpose predominates, the product is a foodstuff.
The Düsseldorf Administrative Court had to deal with this question in the aforementioned legal dispute brought by the distributor against an official prohibition order in the form of a so-called general ruling („Allgemeinverfügung“). By notice dated July 11, 2020, the competent authority issued a general ruling prohibiting the marketing of foodstuffs containing “cannabidiol (as ‘CBD isolates’ or ‘hemp extracts enriched with CBD’)” in their urban area. The company, based in this city, offered the mouth spray described above.
In a ruling dated 25.10.2024 (Courts Ref. : 26 K 2072/23), the court dismissed the company’s claim. The court’s main arguments were :
- Classification as food: the CBD spray was correctly classified as food by the authority, as it was reasonable to expect that it could be swallowed despite indications to the contrary. According to an objective perception of the market, there is a now established expectation of an average informed, attentive and reasonable consumer to the effect that CBD oils are intended as “lifestyle” products for oral ingestion, from which consumers hope for positive health effects The labelling as “cosmetic” was refuted by the objective consumer expectations and the nature of the application.
- No medicinal product status: Due to the low dosage in this case (max. 30 mg CBD per day), the product was not classified as a functional medicinal product, as there was no sufficiently proven pharmacological effect.
- Legal basis of the injunction: The prohibition of the sale of the products by the defendant was based on a general order, which was confirmed as lawful by the court.
In the ruling, the court emphasizes the objective consumer expectation and clarifies that products cannot be exempted from a different regulatory classification by the authorities or the courts solely by their labelling.
Conclusion: The decision presented underlines the considerable importance of the “correct” classification of a health product in the respective legal product category. In addition to the classic distinction between foodstuffs (food supplements) and medicinal products, comparable issues also arise with other product types. In this case in the constellation of cosmetics versus food – combined with the special legal component of the use of CBD.
Los agentes comerciales tienen una regulación específica con derechos y obligaciones que son “imperativos”: quienes firman un contrato de agencia no pueden derogarlos. Responder si un influencer puede ser un agente tiene importancia porque, de serlo, la normativa de los agentes se le aplicará.
Vamos por partes. El influencer del que vamos a hablar es la persona que con sus acciones y comentarios (blogs, cuentas en redes sociales, vídeos, eventos, o un poco de todo) habla ante sus seguidores de las ventajas de determinados productos o servicios identificados con alguna marca ajena. A cambio de esto el influencer cobra (El Real Decreto 444/2024, de 30 de abril regula los requisitos a efectos de ser considerado “influencer”. En este comentario, uso el término de forma más genérica y al margen de otras obligaciones que contiene esa norma y la Ley 13/2022 General de comunicación audiovisual).
Un agente comercial es quien promueve la contratación de productos o servicios de otros, lo hace de forma estable y a cambio cobra. También puede concluir la contratación, pero esto no es esencial.
La ley impone determinadas obligaciones y garantiza ciertos derechos a quienes firman un contrato de agencia. Si el influencer es considerado “agente”, los debería tener igualmente. Y son varios: por ejemplo, la duración, el preaviso que hay que dar para terminar el contrato, las obligaciones de las partes… Y el más relevante, el derecho del agente a cobrar una indemnización al final de la relación por la clientela que se hubiera generado. Si un influencer es un agente, también tendría este derecho.
¿Y cómo valorar si un influencer es o no un agente? Para eso deberemos analizar dos cosas: (a) el contrato (y cuidado porque hay contrato, aunque no sea escrito) y (b) cómo se han comportado las partes.
Los elementos que, en mi opinión, tienen más relevancia para concluir que un influencer es un agente, serían los siguientes:
a) que el influencer promueva la contratación de servicios o la compra de productos y lo haga de forma independiente.
El contrato indicará qué ha de hacer el influencer. Será más claro considerarlo como agente si sus comentarios animan a contratar: por ejemplo, incluyen un link a la web de fabricante, si ofrece un código descuento, si admite que se le hagan pedidos. Y que lo haga como “profesional” independiente, y no como un empleado (con horario, medios, instrucciones).
Podrá ser más complicado considerarlo agente si se limita a hablar de las bondades del producto o servicio, a aparecer en la publicidad como imagen de marca, a usar un determinado producto y hablar bien de él. Lo importante, en mi opinión, es examinar si la actividad del influencer es para que se contrate el producto que comenta, o si lo que hace es una persuasión más genérica (aparecer en publicidad, prestar su imagen a un producto, realizar demostraciones de uso), o incluso si solo busca promocionarse a sí mismo como vehículo de información general (por ejemplo, influencers que hacen comparaciones de productos sin pretender que se compren unos u otros). En el primer caso (intenta que se compre el producto) sería más fácil considerarlo “agente”, y menos en los otros ejemplos.
b) que dicha “promoción” se haga de forma continuada o estable.
Y cuidado, porque esta continuidad o estabilidad, no quiere decir que el contrato tenga que ser de duración indeterminada. Es, más bien, lo contrario a una relación esporádica. Un contrato de un año puede ser suficiente, mientras que varias intervenciones desconectadas, aun durando más tiempo, podrían no serlo.
En este caso, se excluirían como agentes aquellos influencers que realizan comentarios ocasionales, que intervienen con actuaciones aisladas, quienes se limitan a realizar comparaciones sin promover la compra de uno u otro, y aunque todo eso dé lugar a ventas, aunque sus comentarios sean frecuentes y aunque puedan tener una gran influencia en el comportamiento de sus seguidores.
c) que reciba una remuneración por su actividad
Un influencer que perciba una remuneración en función de las ventas (por ejemplo, porque promociona un código descuento, un link específico, o remite a su web para pedidos), podrá más fácilmente ser considerado como un agente. Pero también si solo percibe una cantidad fija por su promoción. Quedarían excluidos, por el contrario, aquellos influencers que no percibieran remuneración de la marca (el ejemplo de quien habla las bondades de un producto en comparación con otros, pero sin vincularlo a su promoción).
Conclusión
La frontera entre lo que cualifica al influencer como agente o no puede ser muy sutil, sobre todo porque los contratos no suelen ser unívocos y a veces sus prestaciones son múltiples. Lo más importante es analizar con cuidado el contrato y el comportamiento de las partes.
Un influencer podría ser considerado un agente comercial en la medida en que con su actividad promueva la contratación del producto (no simplemente, si lleva a cabo una labor informativa, o de imagen), que se haga de forma estable (y no meramente anecdótica o esporádica) y a cambio de una remuneración.
Lo esencial para valorar la situación concreta es analizar el contrato (si es escrito más fácil) y la forma en la que se han comportado las partes.
En resumen: para redactar un contrato con un influencer o, si ya se firmó, pero se quiere concluir, habrá que prestar atención a estos elementos. Como influencer puedes tener mucho interés en que se te considere un agente cuando concluyes tu contrato y así tener derecho a una indemnización, mientras que como empresario preferirás lo contrario.
NOTA FINAL. En España y en la fecha de este comentario (9 de junio de 2024) no conozco ninguna sentencia que trate sobre este asunto. Mi propuesta se basa en mi experiencia de más de 30 años asesorando y defendiendo en tribunales en relación con contratos de agencia. Por otra parte, y que yo sepa, hay al menos una sentencia en Roma (Italia) que aborda el asunto: Tribunale di Roma; Sezione Lavoro 4º, St. 2615 de 4 marzo 2024; R. G. n. 38445/2022
El agente comercial tiene derecho a obtener cierta información sobre las ventas del empresario. La Ley española del Contrato de Agencia prevé (15.2 LCA) que el agente tiene derecho a exigir la exhibición de la contabilidad del empresario para verificar todo lo relativo a las comisiones que le correspondan. Y también a que se le proporcionen las informaciones de que disponga el empresario y que sean necesarias para verificar la cuantía de dichas comisiones.
Este artículo está en consonancia con lo previsto en la Directiva sobre los agentes comerciales de 1986 según la cual (12.3) el agente tendrá derecho a exigir que se le proporcionen todas las informaciones que se hallen a disposición del empresario, en particular un extracto de los libros de contabilidad, que le sean necesarias para verificar el importe de las comisiones que le correspondan. Esto no podrá alterarse en detrimento del agente comercial mediante pacto.
La pregunta es ¿permanece este derecho incluso tras la terminación del contrato de agencia? En otras palabras: extinguido el contrato de agencia, ¿puede el agente solicitar la información y documentación mencionada en estos artículos y está el empresario obligado a proporcionársela?
En nuestra opinión, la norma no dice nada que limite este derecho, más bien cabe pensar lo contrario. Por lo que, en la medida en que persista alguna posible comisión que pueda nacer de dicha verificación, la respuesta ha de ser afirmativa. Veamos.
El derecho a exigir la exhibición de la contabilidad existe para que el agente pueda verificar la cuantía de las comisiones. Y el agente tiene derecho a comisiones por actos y operaciones concluidos durante la vigencia del contrato (art. 12 LCA), pero también por actos u operaciones concluidos con posterioridad a la extinción del contrato (art. 13 LCA), y por operaciones no ejecutadas por circunstancias imputables al empresario (art. 17 LCA). Además, el agente tiene derecho a que la comisión se devengue en el momento en que hubiera debido ejecutarse el acto u operación (art. 14 LCA).
Todas estas operaciones pueden tener lugar una vez concluido el contrato. Piénsese en la situación habitual en la que los pedidos se cursan durante el contrato, pero son aceptados o ejecutados con posterioridad. Reducir el derecho del agente a informarse solo durante la vigencia del contrato sería limitar indebidamente su derecho a la comisión correspondiente. Y téngase en cuenta que el importe de las comisiones durante los últimos cinco años puede, además, influir en el cálculo de la indemnización por clientela (art. 28 LCA), por lo que el interés del agente para conocerlas es doble: lo que percibiría como comisión, y lo que podría aumentar la base para una futura indemnización.
Esto ha sido confirmado, por ejemplo, por la Audiencia de Madrid (AAP 227/2017, de 29 de junio [ECLI:ES:APM:2017:2873A]) que textualmente dice:
[…] el art. 15.2 de la ley de Contrato de Agencia dispone el derecho del agente a exigir la exhibición de la contabilidad del empresario en los particulares necesarios para verificar todo lo relativo a las comisiones que le corresponden, como a serle proporcionadas las informaciones de que disponga el empresario y sean necesarias para verificar su cuantía. A ello no es óbice, […], que el contrato de agencia ya hubiese sido resuelto pues ello no implica que dejasen de devengarse comisiones por pólizas, contratadas con la mediación del agente, que mantengan su vigencia.
Cabe preguntarse entonces si este derecho de información es ilimitado en el tiempo. Y aquí la respuesta sería negativa. La limitación del derecho a recibir información estaría vinculada a la prescripción del derecho a reclamar la correspondiente comisión. Si el derecho a percibir la comisión estuviera indudablemente prescrito, podría defenderse que no cabría recibir información sobre ella. Pero para tal excepción, la prescripción debe ser clara, por lo tanto, considerando las posibles interrupciones habidas por reclamaciones incluso extrajudiciales. En caso de duda, será necesario reconocer el derecho a exigir la información, sin perjuicio de que luego se invoque y reconozca la imposibilidad de reclamar la comisión si estuviera prescrito el derecho. Y para ello debemos considerar el plazo de prescripción para exigir las comisiones (en general, tres años) y la del derecho para reclamar la indemnización por clientela (un año).
En resumen: no parece que el derecho a recibir información y al examen de la documentación del empresario quede limitado por la vigencia del contrato de agencia; aunque, por otra parte, convenga analizar la posible prescripción para exigir las comisiones. En caso de no tener una respuesta clara sobre ésta, el derecho de información debería, en nuestra opinión, prevalecer, sin perjuicio de que el resultado pueda luego no dar derecho a la reclamación por haber prescrito.
SUMMARY: In large-scale events such as the Paris Olympics certain companies will attempt to «wildly» associate their brand with the event through a practice called «ambush marketing», defined by caselaw as «an advertising strategy implemented by a company in order to associate its commercial image with that of an event, and thus to benefit from the media impact of said event, without paying the related rights and without first obtaining the event organizer’s authorization» (Paris Court of Appeal, June 8, 2018, Case No 17/12912). A risky and punishable practice, that might sometimes yet be an option yet.
Key takeaways
- Ambush marketing might be a punished practice but is not prohibited as such;
- As a counterpart of their investment, sponsors and official partners benefit from an extensive legal protection against all forms of ambush marketing in the event concerned, through various general texts (counterfeiting, parasitism, intellectual property) or more specific ones (e.g. sport law);
- The Olympics Games are subject to specific regulations that further strengthen this protection, particularly in terms of intellectual property.
- But these rights are not absolute, and they are still thin opportunities for astute ambush marketing.
The protection offered to sponsors and official partners of sporting and cultural events from ambush marketing
With a budget of over 4 billion euros, the 2024 Olympic and Paralympic Games are financed mostly by various official partners and sponsors, who in return benefit from a right to use Olympic and Paralympic properties to be able to associate their own brand image and distinctive signs with these events.
Ambush marketing is not punishable as such under French law, but several scattered texts provide extensive protection against ambush marketing for sponsors and partners of sporting or cultural continental-wide or world-wide events. Indeed, sponsors are legitimately entitled to peacefully enjoy the rights offered to them in return for large-scale investments in events such as the FIFA or rugby World Cups, or the Olympic Games.
In particular, official sponsors and organizers of such events may invoke:
- the «classic» protections offered by intellectual property law (trademark law and copyright) in the context of infringement actions based on the French Intellectual Property Code,
- tort law (parasitism and unfair competition based on article 1240 of the French Civil Code);
- consumer law (misleading commercial practices) based on the French Consumer Code,
- but also more specific texts such as the protection of the exploitation rights of sports federations and sports event organizers derived from the events or competitions they organize, as set out in article L.333-1 of the French Sports Code, which gives sports event organizers an exploitation monopoly.
The following ambush marketing practices were sanctioned on the abovementioned grounds:
- The use of a tennis competition name and of the trademark associated with it during the sporting event: The organization of online bets, by an online betting operator, on the Roland Garros tournament, using the protected sign and trademark Roland Garros to target the matches on which the bets were organized. The unlawful exploitation of the sporting event, was punished and 400 K€ were allowed as damages, based on article L. 333-1 of the French Sports Code, since only the French Tennis Federation (F.F.T.) owns the right to exploit Roland Garros. The use of the trademark was also punished as counterfeiting (with 300 K€ damages) and parasitism (with 500 K€ damages) (Paris Court of Appeal, Oct. 14, 2009, Case No 08/19179);
- An advertising campaign taking place during a film festival and reproducing the event’s trademark: The organization, during the Cannes Film Festival, of a digital advertising campaign by a cosmetics brand through the publication on its social networks of videos showing the beauty makeovers of the brand’s muses, in some of which the official poster of the Cannes Film Festival was visible, one of which reproduced the registered trademark of the “Palme d’Or”, was punished on the grounds of copyright infringement and parasitism with a 50 K€ indemnity (Paris Judicial Court, Dec. 11, 2020, Case No19/08543);
- An advertising campaign aimed at falsely claiming to be an official partner of an event: The use, during the Cannes Film Festival, of the slogan «official hairdresser for women» together with the expressions «Cannes» and «Cannes Festival», and other publications falsely leading the public to believe that the hairdresser was an official partner, to the detriment of the only official hairdresser of the Cannes festival, was punished on the grounds of unfair competition and parasitism with a 50 K€ indemnity (Paris Court of Appeal, June 8, 2018, Case No 17/12912).
These financial penalties may be combined with injunctions to cease these behaviors, and/or publication in the press under penalty.
An even greater protection for the Paris 2024 Olympic Games
The Paris 2024 Olympic Games are also subject to specific regulations.
Firstly, Article L.141-5 of the French Sports Code, enacted for the benefit of the «Comité national olympique et sportif français” (CNOSF) and the “Comité de l’organisation des Jeux Olympiques et Paralympiques de Paris 2024” (COJOP), protects Olympic signs such as the national Olympic emblems, but also the emblems, the flag, motto and Olympic symbol, Olympic anthem, logo, mascot, slogan and posters of the Olympic Games, the year of the Olympic Games «city + year», the terms «Jeux Olympiques», «Olympisme», «Olympiade», «JO», «olympique», «olympien» and «olympienne». Under no circumstances may these signs be reproduced or even imitated by third-party companies. The COJOP has also published a guide to the protection of the Olympic trademark, outlining the protected symbols, trademarks and signs, as well as the protection of the official partners of the Olympic Games.
Secondly, Law no. 2018-202 of March 26, 2018 on the organization of the 2024 Olympic and Paralympic Games adds even more specific prohibitions, such as the reservation for official sponsors of advertising space located near Olympic venues, or located on the Olympic and Paralympic torch route. This protection is unique in the context of the Olympic Games, but usually unregulated in the context of simple sporting events.
The following practices, for example, have already been sanctioned on the above-mentioned grounds:
- Reproduction of a logo imitating the well-known «Olympic» trademark on a clothing collection: The marketing of a collection of clothing, during the 2016 Olympic Games, bearing a logo (five hearts in the colors of the 5 Olympic colors intersecting in the image of the Olympic logo) imitating the Olympic symbol in association with the words «RIO» and «RIO 2016», was punished on the grounds of parasitism (10 K€ damages) and articles L. 141-5 of the French Sports Code (35 K€) and L. 713-1 of the French Intellectual Property Code (10 K€ damages) (Paris Judicial Court, June 7, 2018, Case No16/10605);
- The organization of a contest on social networks using protected symbols: During the 2018 Olympic Games in PyeongChang, a car rental company organized an online game inviting Internet users to nominate the athletes they wanted to win a clock radio, associated with the hashtags «#JO2018» («#OJ2018”), «#Jeuxolympiques» (“#Olympicsgame”) or «C’est parti pour les jeux Olympiques» (“let’s go for the Olympic Games”) without authorization from the CNOSF, owner of these distinctive signs under the 2018 law and article L.141-5 of the French Sport Code and punished on these grounds with 20 K€ damages and of 10 K€ damages for parasitism (Paris Judicial Court, May 29, 2020, n°18/14115).
These regulations offer official partners greater protection for their investments against ambush marketing practices from non-official sponsors.
Some marketing operations might be exempted
An analysis of case law and promotional practices nonetheless reveals the contours of certain advertising practices that could be authorized (i.e. not sanctioned by the above-mentioned texts), provided they are skillfully prepared and presented. Here are a few exemples :
- Communication in an offbeat or humorous tone: An offbeat or even humorous approach can help to avoid the above-mentioned sanctions:
In 2016, for example, the Intersnack group’s Vico potato chips brand launched a promotional campaign around the slogan «Vico, partner of home fans» in the run-up to the Euro and Olympic Games.
Irish online betting company Paddy Power had sponsored a simple egg-in-the-spoon race in «London» (… a village in Burgundy, France), to display in London during the 2012 Olympics the slogan «Official Sponsor of the largest athletics event in London this year! There you go, we said it. (Ahem, London France that is)«. At the time, the Olympic Games organizing committee failed to stop the promotional poster campaign.
During Euro 2016, for which Carlsberg was the official sponsor, the Dutch group Heineken marketed a range of beer bottles in the colors of the flags of 21 countries that had «marked its history», the majority of which were however participating in the competition.
- Communication of information for advertising purposes: The use of the results of a rugby match and the announcement of a forthcoming match in a newspaper to promote a motor vehicle and its distinctive features was deemed lawful: «France 13 Angleterre 24 – the Fiat 500 congratulates England on its victory and looks forward to seeing the French team on March 9 for France-Italy» (France 13 Angleterre 24 – la Fiat 500 félicite l’Angleterre pour sa victoire et donne rendez-vous à l’équipe de France le 9 mars pour France-Italie) the judges having considered that this publication «merely reproduces a current sporting result, acquired and made public on the front page of the sports newspaper, and refers to a future match also known as already announced by the newspaper in a news article» (Court of cassation, May 20, 2014, Case No 13-12.102).
- Sponsorship of athletes, including those taking part in Olympic competitions: Subject to compliance with the applicable regulatory framework, particularly as regards models, any company may enter into partnerships with athletes taking part in the Olympic Games, for example by donating clothing bearing the desired logo or brand, which they could wear during their participation in the various events. Athletes may also, under certain conditions, broadcast acknowledgements from their partner (even if unofficial). Rule 40 of the Olympic Charter governs the use of athletes’, coaches’ and officials’ images for advertising purposes during the Olympic Games.
The combined legal and marketing approach to the conception and preparation of the message of such a communication operation is essential to avoid legal proceedings, particularly on the grounds of parasitism; one might therefore legitimately contemplate advertising campaigns, particularly clever, or even malicious ones.
In this first episode of Legalmondo’s Distribution Talks series, I spoke with Ignacio Alonso, a Madrid-based lawyer with extensive experience in international commercial distribution.
Main discussion points:
- in Spain, there is no specific law for distribution agreements, which are governed by the general rules of the Commercial Code;
- therefore, it is essential to draft a clear and comprehensive contract, which will be the primary source of the parties’ rights and obligations;
- it is also good to be aware of Spanish case law on commercial distribution, which in some cases applies the law on commercial agency by analogy.
- the most common issues involving foreign producers distributing in Spain arise at the time of termination of the relationship, mainly because case law grants the terminated distributor an indemnity of clientele or goodwill if similar prerequisites to those in the agency regulations apply.
- another frequent dispute concerns the adequacy of the notice period for terminating the contract, especially if there is no agreement between the parties: the advice is to follow what the agency regulations stipulate and thus establish a minimum notice period of one month for each year of the contract’s duration, up to 6 months for agreements lasting more than five years;
- regarding dispute resolution tools, mediation is an option that should be carefully considered because it is quick, inexpensive, and allows a shared solution to be sought flexibly without disrupting the business relationship.
- if mediation fails, the parties can provide for recourse to arbitration or state court. The choice depends on the case’s specific circumstances, and one factor in favor of jurisdiction is the possibility of appeal, which is excluded in the case of arbitration.
Go deeper
- Goodwill or clientele indemnity, when it is due and how to calculate it: see this article and on our blog;
- Practical Guide on International Distribution Contract: Spain report
- Practical Guide on International Agency Contract: Spain report
- Mediation: The importance of mediation in distribution contracts
- How to negotiate and draft an international distribution agreement: 7 lessons from the history of Nike
Summary
On 1 June 2022, Regulation EU n. 720/2022, i.e.: the new Vertical Block Exemption Regulation (hereinafter: «VBER»), replaced the previous version (Regulation EU n. 330/2010), expired on 31 May 2022.
The new VBER and the new vertical guidelines (hereinafter: “Guidelines”) have received the main evidence gathered during the lifetime of the previous VBER and contain some relevant provisions affecting the discipline of all B2B agreements among businesses operating at different levels of the supply chain.
In this article, we will focus on the impact of the new VBER on sales through digital platforms, listing the main novelties impacting distribution chains, including a platform for marketing products/services.
The general discipline of vertical agreements
Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”) prohibits all agreements that prevent, restrict, or distort competition within the EU market, listing the main types, e.g.: price fixing; market partitioning; limitations on production/development/investment; unfair terms, etc.
However, Article 101(3) TFEU exempts from such restrictions the agreements that contribute to improving the EU market, to be identified in a special category Regulation.
The VBER establishes the category of vertical agreements (i.e., agreements between businesses operating at different levels of the supply chain), determining which of these agreements are exempted from Article 101(1) TFEU prohibition.
In short, vertical agreements are presumed to be exempted (and therefore valid) if they do not contain so-called «hardcore restrictions» (i.e., severe restrictions of competition, such as an absolute ban on sales in a territory or the manufacturer’s determination of the distributor’s resale price) and if neither party’s market share exceeds 30%.
The exempted agreements benefit from what has been termed the “safe harbour” of the VBER. In contrast, the others will be subject to the general prohibition of Article 101(1) TFEU unless they can benefit from an individual exemption under Article 101(3) TFUE.
The innovations introduced by the new VBER to online platforms
The first relevant aspect concerns the classification of the platforms, as the European Commission excluded that the online platform generally meets the conditions to be categorized as agency agreements.
While there have never been doubts concerning platforms that operate by purchasing and reselling products (classic example: Amazon Retail), some have arisen concerning those platforms that merely promote the products of third parties without carrying out the activity of resale (classic example: Amazon Marketplace).
With this statement, the European Commission wanted to clear the field of doubt, making explicit that intermediation service providers (such as online platforms) qualify as suppliers (as opposed to commercial agents) under the VBER. This reflects the approach of Regulation (EU) 2019/1150 («P2B Regulation»), which has, for the first time, dictated a specific discipline for digital platforms. It provided for a set of rules to create a “fair, transparent, and predictable environment” for smaller businesses and customers” and for the rationale of the Digital Markets Act, banning certain practices used by large platforms acting as “gatekeepers”.
Therefore, all contracts concluded between manufacturers and platforms (defined as ‘providers of online intermediation services’) are subject to all the restrictions imposed by the VBER. These include the price, the territories to which or the customers to whom the intermediated goods or services may be sold, or the restrictions relating to online advertising and selling.
Thus, to give an example, the operator of a platform may not impose a fixed or minimum sale price for a transaction promoted through the platform.
The second most impactful aspect concerns hybrid platforms, i.e., competing in the relevant market to sell intermediated goods or services. Amazon is the most well-known example, as it is a provider of intermediation services (“Amazon Marketplace”), and – at the same time – it distributes the products of those parties (“Amazon Retail”). We have previously explored the distinction between those 2 business models (and the consequences in terms of intellectual property infringement) here.
The new VBER explicitly does not apply to hybrid platforms. Therefore, the agreements concluded among such platforms and manufacturers are subject to the limitations of the TFEU, as such providers may have the incentive to favour their sales and the ability to influence the outcome of competition between undertakings that use their online intermediation services.
Those agreements must be assessed individually under Article 101 of the TFEU, as they do not necessarily restrict competition within the meaning of TFEU, or they may fulfil the conditions of an individual exemption under Article 101(3) TFUE.
The third very relevant aspect concerns the parity obligations (also referred to as Most Favoured Nation Clauses, or MFNs), i.e., the contract provisions in which a seller (directly or indirectly) agrees to give the buyer the best terms it makes available to any other buyer.
Indeed, platforms’ contractual terms often contain parity obligation clauses to prevent users from offering their products/services at lower prices or on better conditions on their websites or other platforms.
The new VBER deals explicitly with parity clauses, making a distinction between clauses whose purpose is to prohibit users of a platform from selling goods or services on more favourable terms through competing platforms (so-called “wide parity clauses”), and clauses that prohibit sales on more favourable terms only in respect of channels operated directly by the users (so-called “narrow parity clauses”).
Wide parity clauses do not benefit from the VBER exemption; therefore, such obligations must be assessed individually under Article 101(3) TFEU.
On the other hand, narrow parity clauses continue to benefit from the exemption already granted by the old VBER if they do not exceed the threshold of 30% of the relevant market share set out in Article 3 of the new VBER. However, the new Guidelines warn against using overly narrow parity obligations by online platforms covering a significant share of users, stating that if there is no evidence of pro-competitive effects, the benefit of the block exemption is likely to be withdrawn.
Impact and takeaways
The new VBER entered into force on 1 June 2022 and is already applicable to agreements signed after that date. Agreements already in force on 31 May 2022 that satisfy the conditions for exemption under the current VBER but do not satisfy the requirements under the new VBER shall benefit from a one-year transitional period.
The new regime will be the playing field for all platform-driven sales over the next 12 years (the regulation expires on 31 May 2034). Currently, the rather restrictive novelties on hybrid platforms and parity obligations will likely necessitate substantial revisions to existing trade agreements.
Here, then, are some tips for managing contracts and relationships with online platforms:
- the new VBER is the right opportunity to review the existing distribution networks. The revision will have to consider not only the new regulatory limits (e.g., the ban on wide parity clauses) but also the new discipline reserved for hybrid platforms and dual distribution to coordinate the different distribution channels as efficiently as possible, by the stakes set by the new VBER and the Guidelines;
- platforms are likely to play an even greater role during the next decade; it is, therefore, essential to consider these sales channels from the outset, coordinating them with the other existing ones (retail, direct sales, distributors, etc.) to avoid jeopardizing the marketing of products or services;
- the European legislator’s attention toward platforms is growing. Looking up from the VBER, one should not forget that they are subject to a multitude of other European regulations, which are gradually regulating the sector and which must be considered when concluding contracts with platforms. The reference is not only to the recent Digital Market Act and P2B Regulation but also to the protection of IP rights on platforms, which – as we have already seen – is still an open issue.
Summary
To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.
I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”
What can one do to avoid the imposition of price increases by suppliers?
- Know your rights and act in an informed manner
- Plan and organise your supply chain
Does my supplier have the right to increase prices?
If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.
It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.
What if he tells me it is force majeure?
That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.
What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?
He would be in breach of contract and liable to pay damages for violating his contractual obligations.
How can one avoid a tug-of-war with suppliers?
The tools are there. You have to know them and use them.
It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:
- the quantities of products to be ordered
- the delivery terms
- the durationof the agreement
- the pricesof the products or raw materials
- the conditions under which prices can be varied
There is a very effective instrument to do so: a framework purchase agreement.
Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.
Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.
For an in-depth discussion of this contract, see this article.
- “Yes, but my suppliers will never sign it!”
Why not? Ask them to explain the reason.
This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.
In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.
How are price changes for future supplies regulated?
Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.
- The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
- An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.
What if the parties do not agree on new prices?
It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.
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“This agreement is not just an economic opportunity. It is a political necessity.” In the current geopolitical context of growing protectionism and significant regional conflicts, Ursula von der Leyen’s statement says a lot.
Even though there is still a long way to go before the agreement is approved internally in each bloc and comes into force, the milestone is highly significant. It took 25 years from the start of negotiations between Mercosur and the European Union to reach a consensus text. The impacts will be considerable. Together, the blocs represent a GDP of over 22 trillion dollars, and are home to over 700 million people.
Our aim here is to highlight, in a simplified manner, the most important information about the agreement’s content and its progress, which we will update here at each stage.
What is it?
The agreement was signed as a trade treaty, with the main goal of reducing import and export tariffs, eliminating bureaucratic barriers, and facilitating trade between Mercosur countries and European Union members. Additionally, the pact includes commitments in areas such as sustainability, labor rights, technological cooperation, and environmental protection.
Mercosur (Southern Common Market) is an economic bloc created in 1991 by Brazil, Argentina, Paraguay, and Uruguay. Now, Bolivia and Chile participate as associated members, accessing some trade agreements, but not fully integrated into the common market. On the other hand, the European Union, with its 27 members (20 of which have adopted the common currency), is a broader union with greater economic and social integration compared to Mercosur.
What does the EU Mercosur agreement include?
Trade in goods:
- Reduction or elimination of tariffs on products traded between the blocs, such as meat, grains, fruits, automobiles, wines, and dairy products (the expected reduction will affect over 90% of the traded goods between the blocks).
- Easier access to European high-tech and industrialized products.
Trade in services:
- Expands access to financial services, telecommunications, transportation, and consulting for businesses in both blocs.
Movement of people:
- Provides facilities for temporary visas for qualified workers, such as technology professionals and engineers, promoting talent exchange.
- Encourages educational and cultural cooperation programs.
Sustainability and environment:
- Includes commitments to combat deforestation and meet the goals of the Paris Agreement on climate change.
- Provides penalties for violations of environmental standards.
Intellectual property and regulations:
- Protects geographical indications for European cheese, wines, and South American coffee and cachaça.
- Harmonizes regulatory standards to reduce bureaucracy and avoid technical barriers.
Labor rights:
- Commitment to decent working conditions and compliance with International Labor Organization (ILO) standards.
Which benefits to expect?
- Access to new markets: Mercosur companies will have easier access to the European market, which has more than 450 million consumers, while European products will become more competitive in South America.
- Costs reduction: The elimination or reduction of tariffs could lower the prices of products such as wines, cheese, and automobiles and boost South American exports of meat, grains, and fruits.
- Strengthened diplomatic relations: The agreement symbolizes a bridge of cooperation between two regions historically connected by cultural and economic ties.
What’s next?
The signing is only the first step. For the agreement to come into force, it must be ratified by both blocs, and the approval process is quite distinct between them, since Mercosur does not have a common Council or Parliament.
In the European Union, the ratification process involves multiple institutional steps:
- Council of the European Union: Ministers from the member states will discuss and approve the text of the agreement. This step is crucial, as each country has representation and may raise specific national concerns.
- European Parliament: After approval by the Council, the European Parliament, composed of elected deputies, votes to ratify the agreement. The debate at this stage may include environmental, social, and economic impacts.
- National Parliaments: In cases where the agreement affects shared competencies between the bloc and member states (such as environmental regulations), it must also be approved by the parliaments of each member country. This can be challenging, given that countries like France and Ireland have already expressed specific concerns about agricultural and environmental issues.
In Mercosur, the approval depends on each member country:
- National Congresses: The agreement text is submitted to the parliaments of Brazil, Argentina, Paraguay, and Uruguay. Each congress evaluates independently, and approval depends on the political majority in each country.
- Political Context: Mercosur countries have diverse political realities. In Brazil, for example, environmental issues can spark heated debates, while in Argentina, the impact on agricultural competitiveness may be the focus of discussion.
- Regional Coordination: Even after national approval, it is necessary to ensure that all Mercosur members ratify the agreement, as the bloc acts as a single negotiating entity.
Stay tuned: you will find the update here as the processes advance.
When selling health-related products, the question frequently arises as to which product category, and therefore which regulatory regime, they fall under. This question often arises when distinguishing between food supplements and medicinal products. But in other constellations, too, difficult questions of demarcation arise, which must be answered with a view to legally compliant marketing.
In a highly interesting case, the Administrative Court (Verwaltungsgericht) of Düsseldorf, Germany, recently had to classify a CBD-containing (Cannabidiol) mouth spray that was explicitly advertised by its manufacturer as a “cosmetic” and therefore not suitable for human consumption. The Ingredients of the product were labelled: « Cannabis sativa seed oil, cannabidiol from cannabis extract, tincture or resin, cannabis sativa leaf extract ».
The Product is additionally also labelled as follows: “Cosmetic oral care spray with hemp leaf extract. » The Instructions for use are: « Spray a maximum of 3 sprays a day into the mouth as desired. Spit out after 30 seconds and do not swallow. »
A spray of the Product contains 10 mg CBD. This results in a maximum daily dose of 30 mg CBD as specified by the company.
At the same time, however, it was pointed out that the “consumption” of a spray shot was harmless to health.
The mouth spray could therefore be consumed like a food, but was declared as a “cosmetic”. This is precisely where the court had to examine whether the prohibition order based on food law was lawful.
For the definition of cosmetic products Article 2 sentence 4 lit. e) Regulation (EC) No. 178/2002 refers to Directive 76/768/EEC. This was replaced by Regulation (EC) No. 1223/2009. Cosmetic products are defined in Article 2(1)(a) as follows: “‘cosmetic product’ means any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours ”.
Here too, it is not the composition of the product that is decisive, but its intended purpose, which is to be determined on the basis of objective criteria according to general public opinion based on concrete evidence.
According to the system of Regulation (EC) No. 178/2002, Article 2 sentence 1 first defines foodstuffs in general and then excludes cosmetic products under sentence 4 lit. e). According to the definition in Regulation (EC) No. 1223/2009, cosmetic products must have an exclusive or at least predominant cosmetic purpose. It can be concluded from this system that the exclusivity or predominance must be positively established. If it is not possible to determine which purpose predominates, the product is a foodstuff.
The Düsseldorf Administrative Court had to deal with this question in the aforementioned legal dispute brought by the distributor against an official prohibition order in the form of a so-called general ruling („Allgemeinverfügung“). By notice dated July 11, 2020, the competent authority issued a general ruling prohibiting the marketing of foodstuffs containing “cannabidiol (as ‘CBD isolates’ or ‘hemp extracts enriched with CBD’)” in their urban area. The company, based in this city, offered the mouth spray described above.
In a ruling dated 25.10.2024 (Courts Ref. : 26 K 2072/23), the court dismissed the company’s claim. The court’s main arguments were :
- Classification as food: the CBD spray was correctly classified as food by the authority, as it was reasonable to expect that it could be swallowed despite indications to the contrary. According to an objective perception of the market, there is a now established expectation of an average informed, attentive and reasonable consumer to the effect that CBD oils are intended as “lifestyle” products for oral ingestion, from which consumers hope for positive health effects The labelling as “cosmetic” was refuted by the objective consumer expectations and the nature of the application.
- No medicinal product status: Due to the low dosage in this case (max. 30 mg CBD per day), the product was not classified as a functional medicinal product, as there was no sufficiently proven pharmacological effect.
- Legal basis of the injunction: The prohibition of the sale of the products by the defendant was based on a general order, which was confirmed as lawful by the court.
In the ruling, the court emphasizes the objective consumer expectation and clarifies that products cannot be exempted from a different regulatory classification by the authorities or the courts solely by their labelling.
Conclusion: The decision presented underlines the considerable importance of the “correct” classification of a health product in the respective legal product category. In addition to the classic distinction between foodstuffs (food supplements) and medicinal products, comparable issues also arise with other product types. In this case in the constellation of cosmetics versus food – combined with the special legal component of the use of CBD.
Los agentes comerciales tienen una regulación específica con derechos y obligaciones que son “imperativos”: quienes firman un contrato de agencia no pueden derogarlos. Responder si un influencer puede ser un agente tiene importancia porque, de serlo, la normativa de los agentes se le aplicará.
Vamos por partes. El influencer del que vamos a hablar es la persona que con sus acciones y comentarios (blogs, cuentas en redes sociales, vídeos, eventos, o un poco de todo) habla ante sus seguidores de las ventajas de determinados productos o servicios identificados con alguna marca ajena. A cambio de esto el influencer cobra (El Real Decreto 444/2024, de 30 de abril regula los requisitos a efectos de ser considerado “influencer”. En este comentario, uso el término de forma más genérica y al margen de otras obligaciones que contiene esa norma y la Ley 13/2022 General de comunicación audiovisual).
Un agente comercial es quien promueve la contratación de productos o servicios de otros, lo hace de forma estable y a cambio cobra. También puede concluir la contratación, pero esto no es esencial.
La ley impone determinadas obligaciones y garantiza ciertos derechos a quienes firman un contrato de agencia. Si el influencer es considerado “agente”, los debería tener igualmente. Y son varios: por ejemplo, la duración, el preaviso que hay que dar para terminar el contrato, las obligaciones de las partes… Y el más relevante, el derecho del agente a cobrar una indemnización al final de la relación por la clientela que se hubiera generado. Si un influencer es un agente, también tendría este derecho.
¿Y cómo valorar si un influencer es o no un agente? Para eso deberemos analizar dos cosas: (a) el contrato (y cuidado porque hay contrato, aunque no sea escrito) y (b) cómo se han comportado las partes.
Los elementos que, en mi opinión, tienen más relevancia para concluir que un influencer es un agente, serían los siguientes:
a) que el influencer promueva la contratación de servicios o la compra de productos y lo haga de forma independiente.
El contrato indicará qué ha de hacer el influencer. Será más claro considerarlo como agente si sus comentarios animan a contratar: por ejemplo, incluyen un link a la web de fabricante, si ofrece un código descuento, si admite que se le hagan pedidos. Y que lo haga como “profesional” independiente, y no como un empleado (con horario, medios, instrucciones).
Podrá ser más complicado considerarlo agente si se limita a hablar de las bondades del producto o servicio, a aparecer en la publicidad como imagen de marca, a usar un determinado producto y hablar bien de él. Lo importante, en mi opinión, es examinar si la actividad del influencer es para que se contrate el producto que comenta, o si lo que hace es una persuasión más genérica (aparecer en publicidad, prestar su imagen a un producto, realizar demostraciones de uso), o incluso si solo busca promocionarse a sí mismo como vehículo de información general (por ejemplo, influencers que hacen comparaciones de productos sin pretender que se compren unos u otros). En el primer caso (intenta que se compre el producto) sería más fácil considerarlo “agente”, y menos en los otros ejemplos.
b) que dicha “promoción” se haga de forma continuada o estable.
Y cuidado, porque esta continuidad o estabilidad, no quiere decir que el contrato tenga que ser de duración indeterminada. Es, más bien, lo contrario a una relación esporádica. Un contrato de un año puede ser suficiente, mientras que varias intervenciones desconectadas, aun durando más tiempo, podrían no serlo.
En este caso, se excluirían como agentes aquellos influencers que realizan comentarios ocasionales, que intervienen con actuaciones aisladas, quienes se limitan a realizar comparaciones sin promover la compra de uno u otro, y aunque todo eso dé lugar a ventas, aunque sus comentarios sean frecuentes y aunque puedan tener una gran influencia en el comportamiento de sus seguidores.
c) que reciba una remuneración por su actividad
Un influencer que perciba una remuneración en función de las ventas (por ejemplo, porque promociona un código descuento, un link específico, o remite a su web para pedidos), podrá más fácilmente ser considerado como un agente. Pero también si solo percibe una cantidad fija por su promoción. Quedarían excluidos, por el contrario, aquellos influencers que no percibieran remuneración de la marca (el ejemplo de quien habla las bondades de un producto en comparación con otros, pero sin vincularlo a su promoción).
Conclusión
La frontera entre lo que cualifica al influencer como agente o no puede ser muy sutil, sobre todo porque los contratos no suelen ser unívocos y a veces sus prestaciones son múltiples. Lo más importante es analizar con cuidado el contrato y el comportamiento de las partes.
Un influencer podría ser considerado un agente comercial en la medida en que con su actividad promueva la contratación del producto (no simplemente, si lleva a cabo una labor informativa, o de imagen), que se haga de forma estable (y no meramente anecdótica o esporádica) y a cambio de una remuneración.
Lo esencial para valorar la situación concreta es analizar el contrato (si es escrito más fácil) y la forma en la que se han comportado las partes.
En resumen: para redactar un contrato con un influencer o, si ya se firmó, pero se quiere concluir, habrá que prestar atención a estos elementos. Como influencer puedes tener mucho interés en que se te considere un agente cuando concluyes tu contrato y así tener derecho a una indemnización, mientras que como empresario preferirás lo contrario.
NOTA FINAL. En España y en la fecha de este comentario (9 de junio de 2024) no conozco ninguna sentencia que trate sobre este asunto. Mi propuesta se basa en mi experiencia de más de 30 años asesorando y defendiendo en tribunales en relación con contratos de agencia. Por otra parte, y que yo sepa, hay al menos una sentencia en Roma (Italia) que aborda el asunto: Tribunale di Roma; Sezione Lavoro 4º, St. 2615 de 4 marzo 2024; R. G. n. 38445/2022
El agente comercial tiene derecho a obtener cierta información sobre las ventas del empresario. La Ley española del Contrato de Agencia prevé (15.2 LCA) que el agente tiene derecho a exigir la exhibición de la contabilidad del empresario para verificar todo lo relativo a las comisiones que le correspondan. Y también a que se le proporcionen las informaciones de que disponga el empresario y que sean necesarias para verificar la cuantía de dichas comisiones.
Este artículo está en consonancia con lo previsto en la Directiva sobre los agentes comerciales de 1986 según la cual (12.3) el agente tendrá derecho a exigir que se le proporcionen todas las informaciones que se hallen a disposición del empresario, en particular un extracto de los libros de contabilidad, que le sean necesarias para verificar el importe de las comisiones que le correspondan. Esto no podrá alterarse en detrimento del agente comercial mediante pacto.
La pregunta es ¿permanece este derecho incluso tras la terminación del contrato de agencia? En otras palabras: extinguido el contrato de agencia, ¿puede el agente solicitar la información y documentación mencionada en estos artículos y está el empresario obligado a proporcionársela?
En nuestra opinión, la norma no dice nada que limite este derecho, más bien cabe pensar lo contrario. Por lo que, en la medida en que persista alguna posible comisión que pueda nacer de dicha verificación, la respuesta ha de ser afirmativa. Veamos.
El derecho a exigir la exhibición de la contabilidad existe para que el agente pueda verificar la cuantía de las comisiones. Y el agente tiene derecho a comisiones por actos y operaciones concluidos durante la vigencia del contrato (art. 12 LCA), pero también por actos u operaciones concluidos con posterioridad a la extinción del contrato (art. 13 LCA), y por operaciones no ejecutadas por circunstancias imputables al empresario (art. 17 LCA). Además, el agente tiene derecho a que la comisión se devengue en el momento en que hubiera debido ejecutarse el acto u operación (art. 14 LCA).
Todas estas operaciones pueden tener lugar una vez concluido el contrato. Piénsese en la situación habitual en la que los pedidos se cursan durante el contrato, pero son aceptados o ejecutados con posterioridad. Reducir el derecho del agente a informarse solo durante la vigencia del contrato sería limitar indebidamente su derecho a la comisión correspondiente. Y téngase en cuenta que el importe de las comisiones durante los últimos cinco años puede, además, influir en el cálculo de la indemnización por clientela (art. 28 LCA), por lo que el interés del agente para conocerlas es doble: lo que percibiría como comisión, y lo que podría aumentar la base para una futura indemnización.
Esto ha sido confirmado, por ejemplo, por la Audiencia de Madrid (AAP 227/2017, de 29 de junio [ECLI:ES:APM:2017:2873A]) que textualmente dice:
[…] el art. 15.2 de la ley de Contrato de Agencia dispone el derecho del agente a exigir la exhibición de la contabilidad del empresario en los particulares necesarios para verificar todo lo relativo a las comisiones que le corresponden, como a serle proporcionadas las informaciones de que disponga el empresario y sean necesarias para verificar su cuantía. A ello no es óbice, […], que el contrato de agencia ya hubiese sido resuelto pues ello no implica que dejasen de devengarse comisiones por pólizas, contratadas con la mediación del agente, que mantengan su vigencia.
Cabe preguntarse entonces si este derecho de información es ilimitado en el tiempo. Y aquí la respuesta sería negativa. La limitación del derecho a recibir información estaría vinculada a la prescripción del derecho a reclamar la correspondiente comisión. Si el derecho a percibir la comisión estuviera indudablemente prescrito, podría defenderse que no cabría recibir información sobre ella. Pero para tal excepción, la prescripción debe ser clara, por lo tanto, considerando las posibles interrupciones habidas por reclamaciones incluso extrajudiciales. En caso de duda, será necesario reconocer el derecho a exigir la información, sin perjuicio de que luego se invoque y reconozca la imposibilidad de reclamar la comisión si estuviera prescrito el derecho. Y para ello debemos considerar el plazo de prescripción para exigir las comisiones (en general, tres años) y la del derecho para reclamar la indemnización por clientela (un año).
En resumen: no parece que el derecho a recibir información y al examen de la documentación del empresario quede limitado por la vigencia del contrato de agencia; aunque, por otra parte, convenga analizar la posible prescripción para exigir las comisiones. En caso de no tener una respuesta clara sobre ésta, el derecho de información debería, en nuestra opinión, prevalecer, sin perjuicio de que el resultado pueda luego no dar derecho a la reclamación por haber prescrito.
SUMMARY: In large-scale events such as the Paris Olympics certain companies will attempt to «wildly» associate their brand with the event through a practice called «ambush marketing», defined by caselaw as «an advertising strategy implemented by a company in order to associate its commercial image with that of an event, and thus to benefit from the media impact of said event, without paying the related rights and without first obtaining the event organizer’s authorization» (Paris Court of Appeal, June 8, 2018, Case No 17/12912). A risky and punishable practice, that might sometimes yet be an option yet.
Key takeaways
- Ambush marketing might be a punished practice but is not prohibited as such;
- As a counterpart of their investment, sponsors and official partners benefit from an extensive legal protection against all forms of ambush marketing in the event concerned, through various general texts (counterfeiting, parasitism, intellectual property) or more specific ones (e.g. sport law);
- The Olympics Games are subject to specific regulations that further strengthen this protection, particularly in terms of intellectual property.
- But these rights are not absolute, and they are still thin opportunities for astute ambush marketing.
The protection offered to sponsors and official partners of sporting and cultural events from ambush marketing
With a budget of over 4 billion euros, the 2024 Olympic and Paralympic Games are financed mostly by various official partners and sponsors, who in return benefit from a right to use Olympic and Paralympic properties to be able to associate their own brand image and distinctive signs with these events.
Ambush marketing is not punishable as such under French law, but several scattered texts provide extensive protection against ambush marketing for sponsors and partners of sporting or cultural continental-wide or world-wide events. Indeed, sponsors are legitimately entitled to peacefully enjoy the rights offered to them in return for large-scale investments in events such as the FIFA or rugby World Cups, or the Olympic Games.
In particular, official sponsors and organizers of such events may invoke:
- the «classic» protections offered by intellectual property law (trademark law and copyright) in the context of infringement actions based on the French Intellectual Property Code,
- tort law (parasitism and unfair competition based on article 1240 of the French Civil Code);
- consumer law (misleading commercial practices) based on the French Consumer Code,
- but also more specific texts such as the protection of the exploitation rights of sports federations and sports event organizers derived from the events or competitions they organize, as set out in article L.333-1 of the French Sports Code, which gives sports event organizers an exploitation monopoly.
The following ambush marketing practices were sanctioned on the abovementioned grounds:
- The use of a tennis competition name and of the trademark associated with it during the sporting event: The organization of online bets, by an online betting operator, on the Roland Garros tournament, using the protected sign and trademark Roland Garros to target the matches on which the bets were organized. The unlawful exploitation of the sporting event, was punished and 400 K€ were allowed as damages, based on article L. 333-1 of the French Sports Code, since only the French Tennis Federation (F.F.T.) owns the right to exploit Roland Garros. The use of the trademark was also punished as counterfeiting (with 300 K€ damages) and parasitism (with 500 K€ damages) (Paris Court of Appeal, Oct. 14, 2009, Case No 08/19179);
- An advertising campaign taking place during a film festival and reproducing the event’s trademark: The organization, during the Cannes Film Festival, of a digital advertising campaign by a cosmetics brand through the publication on its social networks of videos showing the beauty makeovers of the brand’s muses, in some of which the official poster of the Cannes Film Festival was visible, one of which reproduced the registered trademark of the “Palme d’Or”, was punished on the grounds of copyright infringement and parasitism with a 50 K€ indemnity (Paris Judicial Court, Dec. 11, 2020, Case No19/08543);
- An advertising campaign aimed at falsely claiming to be an official partner of an event: The use, during the Cannes Film Festival, of the slogan «official hairdresser for women» together with the expressions «Cannes» and «Cannes Festival», and other publications falsely leading the public to believe that the hairdresser was an official partner, to the detriment of the only official hairdresser of the Cannes festival, was punished on the grounds of unfair competition and parasitism with a 50 K€ indemnity (Paris Court of Appeal, June 8, 2018, Case No 17/12912).
These financial penalties may be combined with injunctions to cease these behaviors, and/or publication in the press under penalty.
An even greater protection for the Paris 2024 Olympic Games
The Paris 2024 Olympic Games are also subject to specific regulations.
Firstly, Article L.141-5 of the French Sports Code, enacted for the benefit of the «Comité national olympique et sportif français” (CNOSF) and the “Comité de l’organisation des Jeux Olympiques et Paralympiques de Paris 2024” (COJOP), protects Olympic signs such as the national Olympic emblems, but also the emblems, the flag, motto and Olympic symbol, Olympic anthem, logo, mascot, slogan and posters of the Olympic Games, the year of the Olympic Games «city + year», the terms «Jeux Olympiques», «Olympisme», «Olympiade», «JO», «olympique», «olympien» and «olympienne». Under no circumstances may these signs be reproduced or even imitated by third-party companies. The COJOP has also published a guide to the protection of the Olympic trademark, outlining the protected symbols, trademarks and signs, as well as the protection of the official partners of the Olympic Games.
Secondly, Law no. 2018-202 of March 26, 2018 on the organization of the 2024 Olympic and Paralympic Games adds even more specific prohibitions, such as the reservation for official sponsors of advertising space located near Olympic venues, or located on the Olympic and Paralympic torch route. This protection is unique in the context of the Olympic Games, but usually unregulated in the context of simple sporting events.
The following practices, for example, have already been sanctioned on the above-mentioned grounds:
- Reproduction of a logo imitating the well-known «Olympic» trademark on a clothing collection: The marketing of a collection of clothing, during the 2016 Olympic Games, bearing a logo (five hearts in the colors of the 5 Olympic colors intersecting in the image of the Olympic logo) imitating the Olympic symbol in association with the words «RIO» and «RIO 2016», was punished on the grounds of parasitism (10 K€ damages) and articles L. 141-5 of the French Sports Code (35 K€) and L. 713-1 of the French Intellectual Property Code (10 K€ damages) (Paris Judicial Court, June 7, 2018, Case No16/10605);
- The organization of a contest on social networks using protected symbols: During the 2018 Olympic Games in PyeongChang, a car rental company organized an online game inviting Internet users to nominate the athletes they wanted to win a clock radio, associated with the hashtags «#JO2018» («#OJ2018”), «#Jeuxolympiques» (“#Olympicsgame”) or «C’est parti pour les jeux Olympiques» (“let’s go for the Olympic Games”) without authorization from the CNOSF, owner of these distinctive signs under the 2018 law and article L.141-5 of the French Sport Code and punished on these grounds with 20 K€ damages and of 10 K€ damages for parasitism (Paris Judicial Court, May 29, 2020, n°18/14115).
These regulations offer official partners greater protection for their investments against ambush marketing practices from non-official sponsors.
Some marketing operations might be exempted
An analysis of case law and promotional practices nonetheless reveals the contours of certain advertising practices that could be authorized (i.e. not sanctioned by the above-mentioned texts), provided they are skillfully prepared and presented. Here are a few exemples :
- Communication in an offbeat or humorous tone: An offbeat or even humorous approach can help to avoid the above-mentioned sanctions:
In 2016, for example, the Intersnack group’s Vico potato chips brand launched a promotional campaign around the slogan «Vico, partner of home fans» in the run-up to the Euro and Olympic Games.
Irish online betting company Paddy Power had sponsored a simple egg-in-the-spoon race in «London» (… a village in Burgundy, France), to display in London during the 2012 Olympics the slogan «Official Sponsor of the largest athletics event in London this year! There you go, we said it. (Ahem, London France that is)«. At the time, the Olympic Games organizing committee failed to stop the promotional poster campaign.
During Euro 2016, for which Carlsberg was the official sponsor, the Dutch group Heineken marketed a range of beer bottles in the colors of the flags of 21 countries that had «marked its history», the majority of which were however participating in the competition.
- Communication of information for advertising purposes: The use of the results of a rugby match and the announcement of a forthcoming match in a newspaper to promote a motor vehicle and its distinctive features was deemed lawful: «France 13 Angleterre 24 – the Fiat 500 congratulates England on its victory and looks forward to seeing the French team on March 9 for France-Italy» (France 13 Angleterre 24 – la Fiat 500 félicite l’Angleterre pour sa victoire et donne rendez-vous à l’équipe de France le 9 mars pour France-Italie) the judges having considered that this publication «merely reproduces a current sporting result, acquired and made public on the front page of the sports newspaper, and refers to a future match also known as already announced by the newspaper in a news article» (Court of cassation, May 20, 2014, Case No 13-12.102).
- Sponsorship of athletes, including those taking part in Olympic competitions: Subject to compliance with the applicable regulatory framework, particularly as regards models, any company may enter into partnerships with athletes taking part in the Olympic Games, for example by donating clothing bearing the desired logo or brand, which they could wear during their participation in the various events. Athletes may also, under certain conditions, broadcast acknowledgements from their partner (even if unofficial). Rule 40 of the Olympic Charter governs the use of athletes’, coaches’ and officials’ images for advertising purposes during the Olympic Games.
The combined legal and marketing approach to the conception and preparation of the message of such a communication operation is essential to avoid legal proceedings, particularly on the grounds of parasitism; one might therefore legitimately contemplate advertising campaigns, particularly clever, or even malicious ones.
In this first episode of Legalmondo’s Distribution Talks series, I spoke with Ignacio Alonso, a Madrid-based lawyer with extensive experience in international commercial distribution.
Main discussion points:
- in Spain, there is no specific law for distribution agreements, which are governed by the general rules of the Commercial Code;
- therefore, it is essential to draft a clear and comprehensive contract, which will be the primary source of the parties’ rights and obligations;
- it is also good to be aware of Spanish case law on commercial distribution, which in some cases applies the law on commercial agency by analogy.
- the most common issues involving foreign producers distributing in Spain arise at the time of termination of the relationship, mainly because case law grants the terminated distributor an indemnity of clientele or goodwill if similar prerequisites to those in the agency regulations apply.
- another frequent dispute concerns the adequacy of the notice period for terminating the contract, especially if there is no agreement between the parties: the advice is to follow what the agency regulations stipulate and thus establish a minimum notice period of one month for each year of the contract’s duration, up to 6 months for agreements lasting more than five years;
- regarding dispute resolution tools, mediation is an option that should be carefully considered because it is quick, inexpensive, and allows a shared solution to be sought flexibly without disrupting the business relationship.
- if mediation fails, the parties can provide for recourse to arbitration or state court. The choice depends on the case’s specific circumstances, and one factor in favor of jurisdiction is the possibility of appeal, which is excluded in the case of arbitration.
Go deeper
- Goodwill or clientele indemnity, when it is due and how to calculate it: see this article and on our blog;
- Practical Guide on International Distribution Contract: Spain report
- Practical Guide on International Agency Contract: Spain report
- Mediation: The importance of mediation in distribution contracts
- How to negotiate and draft an international distribution agreement: 7 lessons from the history of Nike
Summary
On 1 June 2022, Regulation EU n. 720/2022, i.e.: the new Vertical Block Exemption Regulation (hereinafter: «VBER»), replaced the previous version (Regulation EU n. 330/2010), expired on 31 May 2022.
The new VBER and the new vertical guidelines (hereinafter: “Guidelines”) have received the main evidence gathered during the lifetime of the previous VBER and contain some relevant provisions affecting the discipline of all B2B agreements among businesses operating at different levels of the supply chain.
In this article, we will focus on the impact of the new VBER on sales through digital platforms, listing the main novelties impacting distribution chains, including a platform for marketing products/services.
The general discipline of vertical agreements
Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”) prohibits all agreements that prevent, restrict, or distort competition within the EU market, listing the main types, e.g.: price fixing; market partitioning; limitations on production/development/investment; unfair terms, etc.
However, Article 101(3) TFEU exempts from such restrictions the agreements that contribute to improving the EU market, to be identified in a special category Regulation.
The VBER establishes the category of vertical agreements (i.e., agreements between businesses operating at different levels of the supply chain), determining which of these agreements are exempted from Article 101(1) TFEU prohibition.
In short, vertical agreements are presumed to be exempted (and therefore valid) if they do not contain so-called «hardcore restrictions» (i.e., severe restrictions of competition, such as an absolute ban on sales in a territory or the manufacturer’s determination of the distributor’s resale price) and if neither party’s market share exceeds 30%.
The exempted agreements benefit from what has been termed the “safe harbour” of the VBER. In contrast, the others will be subject to the general prohibition of Article 101(1) TFEU unless they can benefit from an individual exemption under Article 101(3) TFUE.
The innovations introduced by the new VBER to online platforms
The first relevant aspect concerns the classification of the platforms, as the European Commission excluded that the online platform generally meets the conditions to be categorized as agency agreements.
While there have never been doubts concerning platforms that operate by purchasing and reselling products (classic example: Amazon Retail), some have arisen concerning those platforms that merely promote the products of third parties without carrying out the activity of resale (classic example: Amazon Marketplace).
With this statement, the European Commission wanted to clear the field of doubt, making explicit that intermediation service providers (such as online platforms) qualify as suppliers (as opposed to commercial agents) under the VBER. This reflects the approach of Regulation (EU) 2019/1150 («P2B Regulation»), which has, for the first time, dictated a specific discipline for digital platforms. It provided for a set of rules to create a “fair, transparent, and predictable environment” for smaller businesses and customers” and for the rationale of the Digital Markets Act, banning certain practices used by large platforms acting as “gatekeepers”.
Therefore, all contracts concluded between manufacturers and platforms (defined as ‘providers of online intermediation services’) are subject to all the restrictions imposed by the VBER. These include the price, the territories to which or the customers to whom the intermediated goods or services may be sold, or the restrictions relating to online advertising and selling.
Thus, to give an example, the operator of a platform may not impose a fixed or minimum sale price for a transaction promoted through the platform.
The second most impactful aspect concerns hybrid platforms, i.e., competing in the relevant market to sell intermediated goods or services. Amazon is the most well-known example, as it is a provider of intermediation services (“Amazon Marketplace”), and – at the same time – it distributes the products of those parties (“Amazon Retail”). We have previously explored the distinction between those 2 business models (and the consequences in terms of intellectual property infringement) here.
The new VBER explicitly does not apply to hybrid platforms. Therefore, the agreements concluded among such platforms and manufacturers are subject to the limitations of the TFEU, as such providers may have the incentive to favour their sales and the ability to influence the outcome of competition between undertakings that use their online intermediation services.
Those agreements must be assessed individually under Article 101 of the TFEU, as they do not necessarily restrict competition within the meaning of TFEU, or they may fulfil the conditions of an individual exemption under Article 101(3) TFUE.
The third very relevant aspect concerns the parity obligations (also referred to as Most Favoured Nation Clauses, or MFNs), i.e., the contract provisions in which a seller (directly or indirectly) agrees to give the buyer the best terms it makes available to any other buyer.
Indeed, platforms’ contractual terms often contain parity obligation clauses to prevent users from offering their products/services at lower prices or on better conditions on their websites or other platforms.
The new VBER deals explicitly with parity clauses, making a distinction between clauses whose purpose is to prohibit users of a platform from selling goods or services on more favourable terms through competing platforms (so-called “wide parity clauses”), and clauses that prohibit sales on more favourable terms only in respect of channels operated directly by the users (so-called “narrow parity clauses”).
Wide parity clauses do not benefit from the VBER exemption; therefore, such obligations must be assessed individually under Article 101(3) TFEU.
On the other hand, narrow parity clauses continue to benefit from the exemption already granted by the old VBER if they do not exceed the threshold of 30% of the relevant market share set out in Article 3 of the new VBER. However, the new Guidelines warn against using overly narrow parity obligations by online platforms covering a significant share of users, stating that if there is no evidence of pro-competitive effects, the benefit of the block exemption is likely to be withdrawn.
Impact and takeaways
The new VBER entered into force on 1 June 2022 and is already applicable to agreements signed after that date. Agreements already in force on 31 May 2022 that satisfy the conditions for exemption under the current VBER but do not satisfy the requirements under the new VBER shall benefit from a one-year transitional period.
The new regime will be the playing field for all platform-driven sales over the next 12 years (the regulation expires on 31 May 2034). Currently, the rather restrictive novelties on hybrid platforms and parity obligations will likely necessitate substantial revisions to existing trade agreements.
Here, then, are some tips for managing contracts and relationships with online platforms:
- the new VBER is the right opportunity to review the existing distribution networks. The revision will have to consider not only the new regulatory limits (e.g., the ban on wide parity clauses) but also the new discipline reserved for hybrid platforms and dual distribution to coordinate the different distribution channels as efficiently as possible, by the stakes set by the new VBER and the Guidelines;
- platforms are likely to play an even greater role during the next decade; it is, therefore, essential to consider these sales channels from the outset, coordinating them with the other existing ones (retail, direct sales, distributors, etc.) to avoid jeopardizing the marketing of products or services;
- the European legislator’s attention toward platforms is growing. Looking up from the VBER, one should not forget that they are subject to a multitude of other European regulations, which are gradually regulating the sector and which must be considered when concluding contracts with platforms. The reference is not only to the recent Digital Market Act and P2B Regulation but also to the protection of IP rights on platforms, which – as we have already seen – is still an open issue.
Summary
To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.
I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”
What can one do to avoid the imposition of price increases by suppliers?
- Know your rights and act in an informed manner
- Plan and organise your supply chain
Does my supplier have the right to increase prices?
If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.
It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.
What if he tells me it is force majeure?
That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.
What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?
He would be in breach of contract and liable to pay damages for violating his contractual obligations.
How can one avoid a tug-of-war with suppliers?
The tools are there. You have to know them and use them.
It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:
- the quantities of products to be ordered
- the delivery terms
- the durationof the agreement
- the pricesof the products or raw materials
- the conditions under which prices can be varied
There is a very effective instrument to do so: a framework purchase agreement.
Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.
Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.
For an in-depth discussion of this contract, see this article.
- “Yes, but my suppliers will never sign it!”
Why not? Ask them to explain the reason.
This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.
In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.
How are price changes for future supplies regulated?
Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.
- The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
- An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.
What if the parties do not agree on new prices?
It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.
