Since the majority of branded and automotive manufacturers use selective distribution systems, vertical restraints in distribution and franchise agreements were legally justified as a commercial practice established in accordance with Article 12(4) of the Implementing Regulation. However, in the last amendment of September 2016, Article 12(4) of the implementing Regulation was deleted. Vertical restraints imposed on distribution and franchise agreements after September 2016 could only be justified by considerations aimed at ensuring the quality and reputation of the products and their safety, in accordance with Article 12(3) of the implementing Regulation. Therefore, the Decree could probably highlight a new turning point in commercial practice with regard to vertical restraints that prohibit members of a distribution network from passively selling products to retailers located outside the geographical area of their sales activities. Infringements of competition law are punishable at the administrative and criminal levels. In the event of an infringement of Article 7, the Court shall be empowered, in accordance with Article 20, to order the removal of the vertical restraint immediately or within a specified period. Failure to comply may void any agreement contrary to Article 7. This procedure was followed by the Court when the decree was adopted. In this case, it is not certain that the producer will be considered a direct competitor of the independent distributor as soon as he himself starts distribution. Even if the agreement between them takes the form of a distribution agreement, the effects of the EUI/EAHC decision must be carefully examined, although many undertakings can argue that, without the agreement, the distributor would not be a competitor and that the agreement as such would have to be analysed. In the EU, these distribution agreements are considered vertical and are used by a port of refuge without a group. In many emerging countries, the classification of these relationships as vertical or horizontal is unclear.
This position could lead to the challenge of vertical restraints in distribution agreements that would prevent distributors based in Egypt and distributors established outside Egypt from passively selling products on the Egyptian market. The question of whether the European Court of Human Rights will generally abide by this position, regardless of the details of each distribution network or commercial sector, and to what extent a vertical restraint to limit passive sales and parallel imports can still be justified on grounds of preserving the quality and reputation of the products. The ECA`s findings regarding Apple`s distribution agreement network are limited to the practices examined. The decision on a vertical restraint is still decided on a case-by-case basis. However, this decision could set a precedent for the Security Court`s position with regard to vertical restraints in distribution and franchise agreements. In its press release of 9 December 2018, the Court stated that companies that do not hold a dominant position have the right to determine a geographical dimension for the sales activities of their distributor. . .