Competitive Analysis of Territorial Restrictions in Vertical Agreements(A Comparative Study of American, European Union, and Iranian Law)

Abstract

Territorial restrictions are usually imposed by higher firms on lower firms about Sales domain of products subject to the contract­ or on the characteristics of customers in production or distribution chain. ­One of the controversial issues is the examination inconsistency or non-inconsistency of these with competition law. This study seeks to provide a clear answer to the fundamental question of whether territorial restrictions are considered necessarily a violation of competition law or are considered suspect restrictions. The results are evaluated according to the rule of reason in US competition law; While in EU law, exemptions are provided for evaluation the competitive effects declared legitimate and permissible if comply with the declared criteria. In the Iranian legal system, the legislator has simply mentioned two examples of territorial restrictions in Article 44 of the Law on Implementation of General Policies of Principle as anti-competitive restrictive conditions. Therefore, after explaining the concept and economic result, examines and analyzes the procedures of the courts and laws of the United States, the European Union and Iranian law from the perspective of competition law, and shows the surprising deficiencies provides suggestions to amend Iranian regulations to be more in line with the principles and objectives of competition law.

Keywords

• competitive evaluation
• customer allocation
• economic effects
• territorial restrictions
• vertical agreements.