The Commission is proposing to use a market share approach for the exemption of some vertical restraints. However, there is little guidance or precedent in the EU on the way in which markets should be defined in the context of distribution arrangements in general, and franchising arrangements in particular. In the US, the courts and antitrust enforcement agencies have rejected the notion that any presumption of market power flows from a franchisor’s trademark or unique name. Therefore, the markets in which franchisors operate are generally identified as the upstream market for the sale of business opportunities or a broad downstream market for products sold by both franchised and nonfranchise businesses.

Philip F Zeidman
Rudnick, Wolfe, Epstien & Zeidman
Washington, DC