Problem
Delft Oranje bv ('Delft') is a company based in Delft (a city in the Netherlands). It is one of the world's major porcelain manufacturers, including in the manufacture of kilns for porcelain and pottery production. It operates in many countries, including in nine European Union Member States, where its market share of the market for porcelain and porcelain-related products, in those Member States, typically varies between 40% and 65% (the average across the nine EU states is 50%, but it only has less than 2% of the porcelain markets in Germany and France). These market shares have remained reasonably constant for the most recent ten years.
Delft wants to expand its market in France and is proposing to enter into a distribution agreement with Jouet s.a.r.l ('Jouet'), a French company. Delft and Jouet have agreed the following terms in principle, but have not yet entered into a formal written agreement:
A. Delft will appoint Jouet as Delft's sole authorised distributor in France; Delft also agrees not to sell Delft's own products directly to customers in France.
B. In return, Jouet will not distribute Delft's products outside France; in particular, it must not export Delft's kilns from France, or actively seek customers for kilns from outside France.
C. Jouet will also resell the kilns at prices which Delft will set.
I. Advise all affected parties of the legal consequences under European Union law of Delft and Jouet entering into an agreement on these terms.
Delft is also the leading manufacturer and supplier of solar-driven kilns, which are particularly good for low-energy pottery production. This type of solar-driven kiln is very expensive, and normally very difficult to obtain in commercial quantities from any other supplier.
Recently, Delft heard rumours that one of its Dutch customers, Kijkenover bv ('Kijkenover'), had been buying quantities of similar solar-driven kilns from one of Delft's competitors, Kiln Fabreiken NV ('Kiln Fabreiken'). Kiln Fabreiken is new to the market, and is selling the solar-driven kilns at a cheaper price than Delft. As a result, Delft is refusing to supply Kijkenover with any further solar-driven kilns or spare parts for them. Delft has informed its other customers that if those other customers share their supplies with Kijkenover or buy spare parts from Kiln Fabreiken, Delft will refuse to supply those other customers as well. Delft believes it is justified in doing this, as it believes that only by maintaining price stability in the market can they maintain adequate supplies of solar-driven kilns.
II. Advise Delft on what are the legal implications of their current and proposed actions under European Union law.