The antitrust right to delivery is a sharp sword. When a manufacturer or supplier terminates the contract with its retailer, the retailer is often upset, especially if the termination is without justification. Every trader then asks himself whether the termination cannot be challenged. After all, the retailer is often dependent on being able to stock goods from certain manufacturers. This applies in particular when a few manufacturers divide up the market, as in an oligopoly, and customers therefore expect a correspondingly wide range from the specialist retailer.
It is not uncommon for the provider to hold special market power alone or as part of an oligopoly. The retailer's competitiveness then suffers when the delivery ends. Here it is worth checking whether a delivery claim arises from the supplier's obligation to contract. However, the requirements for such a contract compulsion are very high. The economy is supposed to live off competition and freedom of contract. A claim for delivery against the manufacturer consequently depends on its market power and the competitiveness of the sales intermediary without the discontinued goods. This also applies if the provider operates a selective distribution system (read more details about the right to delivery in selective distribution here).
Claim for delivery and market position
Antitrust law, in particular the GWB, can help to justify a claim for delivery. If providers have special market power, they must not abuse this market power. In particular, they must not unreasonably impede competition and trade. Nor are they allowed to treat a company differently from similar companies without a factual reason.
A company is presumed to be dominant if it has at least 40% of market share. Two or more companies can also be dominant together if they form an oligopoly. However, market power can also exist with lower market shares. The retail trade in an entire country, such as Germany, is often dependent on being supplied by one manufacturer. If a manufacturer offers products that are particularly in demand, it is worth examining more closely whether the market power of this manufacturer also leads to an obligation to contract.
Global suppliers are often so strong in their market power that other companies as suppliers or buyers of a certain type of goods or commercial services are dependent on them for their competitiveness. One speaks of dependency when there are no sufficient and reasonable options to switch to third-party companies and there is a clear imbalance in relation to the countervailing power of the other companies (relative market power).
A manufacturer or supplier must not abuse this market power if a dealer is dependent on it. Examples of the prohibited abuse of market power are in particular excessive prices or contract terminations where there is an obligation to contract. If a retailer depends on a product in order to compete with other retailers or specialist retailers, the supplier is obliged to enter into a contract for the supply. The retailer is entitled to this. The supplier is subject to a legal obligation to contract and must offer the dealer his goods at the usual conditions. The termination is invalid.
Delivery claim and assortment-related dependency
There are different types of addiction. One of them is the so-called assortment-related dependency. A specialist retailer is dependent on a specific brand manufacturer if it has to stock its goods in order to be competitive. This applies in particular to branded articles from international brand manufacturers that consumers know and demand.
The decisive factor is how widespread the branded product is. Internationally known brands, for which consumers are willing to pay a high price, are more likely to be accepted. This applies to distribution in shops and in e-commerce, i.e. on online platforms. If a product is sold in an entire country, awareness is greater than if a product is only offered regionally.
If the supplier consequently has a perceptible top position in the market and consequently also relative market power, this can result in a dependency of the retail trade and a corresponding obligation to contract. The supplier is then bound by his antitrust delivery obligation. The right to a contract then serves precisely the purpose of competition and the competitiveness of retailers. When such a top position exists is regularly the subject of court decisions.
The Düsseldorf Higher Regional Court (ruling of April 14, 2021 - Az: VI-U (Kart) 14/20 - Verbundunternehmen) recently had to decide such a case. When determining a top position dependency, the distribution rate is regularly of particular importance. At least for goods that are not sold via a selective distribution system, a high distribution rate is a clear indication of a top position dependency.
With a high distribution rate, however, the top position of the product in question is not yet certain. Rather, all circumstances of the specific case must be comprehensively assessed for the top position dependency: A high distribution rate is generally a necessary prerequisite for a top position for a product that is not sold in selective distribution. A high distribution rate speaks in favor of this. Nonetheless, it must be stated that the competitiveness of the retailer claiming a leading position, depending on the specific nature of its business, actually depends on the availability of a specific product.
determining the top position
In the specific case, it was an affiliated company for shoe shops and sports shops and its contractually bound shoe retailers. The European sales company of the well-known sporting goods manufacturer was sued, which rejected an offer to (re)conclude, among other things, terminated supply contracts. The Düsseldorf Higher Regional Court decided that the affiliated company has no antitrust right to a delivery claim. By refusing to do so, the sales company is not violating the ban on discrimination or hindrance under antitrust law.
Even if the sales company were to be a dominant or market-strong company, it was free to organize its business activities and sales system at its own discretion in such a way that it considered this to be economically sensible and correct. In particular, the Düsseldorf Higher Regional Court denied a range-related dependency on the products in the form of a top position dependency.
Such is the case when a retailer has to carry a certain product in its range in order to be seen as a competitive supplier by its customers. These are so-called must-have products that cannot be replaced by similar goods from other manufacturers in the range. In particular, the awareness of the respective brand and the advertising budget can speak for a top position dependency and thus the abuse of market power.
Delivery claim – High distribution rate
When determining a top position dependency, the distribution rate is regularly of decisive importance. With many branded products, traffic takes the offer of a certain product from a retailer as a matter of course. The absence of this commodity in the offer leads to a loss of reputation and a serious impact on the competitiveness of the retailer. Under these conditions, there is also regularly a high distribution rate. In this case, the goods will be found in the range of almost all comparable retailers.
A high distribution rate is therefore a clear indication of a top position dependency, at least for goods that are not sold via a selective distribution system (Federal Court of Justice, judgment of December 12, 2017, KZR 50/15 - Rimowa). The Düsseldorf Higher Regional Court is now emphasizing the following: This case law should not be understood in such a way that a high distribution rate also means that the product in question is at the top. Rather, all circumstances of the specific case must be comprehensively assessed for the top position dependency.
A high distribution rate is a necessary prerequisite for a top position and for a claim to delivery. Only if all or the vast majority of these dealers actually have the product in question in their range in the geographic area relevant for assessing the competitiveness of the range is the conclusion of a leading position justified. It is always necessary to check whether the retailer's ability to compete actually depends on the availability of a specific product given the circumstances of the individual case. A high distribution rate does not make it unnecessary to check this alleged top position dependency.
Freedom of contract is a valuable asset and can only be limited to such an extent that a dominant company is subject to a contract obligation and is therefore at the same time legally obliged to refrain from terminating a contract. However, the resulting claim for delivery under antitrust law is linked to high hurdles.
In addition to market dominance or relative market strength, there must be a top position dependency on a specific product. Such a top position dependency can only exist if the competitiveness of the terminated dealer – including its international competitiveness – is restricted.
The dealer is responsible for proving the market dominance. For the obligation to contract, he must prove the abuse of a strong market position of the provider on the relevant market. Market power can also be relative market power. A legal obligation to supply arises from an overall view of the distribution rate, price, quality and the degree of sales promotion through advertising.