Follow-up Questions
RECOMMENDATIONS A,
B, C AND R: LEGAL
POSITION AND
UNCERTAINTY
It would be helpful to have an update on the Government's
discussions within the European Community on clarifying or amending
the legal framework taking account of the interests of consumers
and brand owners, and on further study by the Commission and our
EC partners of the economic effects of exhaustion regimes on competition
and trade
Studies to date have been carried out by Sweden,
UK, Denmark and Ireland as well as the NERA (National Economic
Research Associates) study which was on behalf of the Commission.
The matter was discussed at the Internal Market
Council on 25 May 2000. The Commission rejected change to the
Community exhaustion regime to allow parallel imports and said
that it would not be bringing forward proposals. Their view was
that change in the regime would not benefit consumers through
lower prices and there were risks to employment, innovation, product
quality and after-sales service. The UK expressed disappointment
with the Commission's line and argued robustly that change would
favour consumers and competitiveness. Sweden, Germany, the Netherlands,
Finland, Denmark and Belgium all supported further discussions,
while Spain, Italy and Greece argued against change.
The Presidency concluded that there were differing
views within the Council. Further discussion is not likely during
the current French Presidency. We are in contact with the governments
of other Member States who support change with a view to broadening
support for change when the Internal Market Council discusses
this issue again. We are also in contact with Swedish government
on the handling of this matter during its Presidency which begins
in January.
RECOMMENDATION J:
MOTOR CARS
AND MOTOR
BIKES
It would be useful to have copies of the consumer
information provided by the Government on the possible technical
differences between grey imports and type approved cars together
with advice and warnings about the possible consequences of buying
a grey import, and an indication of the take-up of such information
The Government provides the following consumer
information on vehicle imports and the Single Vehicle Approval
Scheme:
1. How to import a vehicle permanently into
Great Britain (PI-4);
2. Single Vehicle Approval Scheme: A guide
to non-type approved imported vehicles, amateur-built vehicles,
"very low volume" approvals, vehicles constructed by
manufacturers using parts from a previously registered vehicle
(SVA3).
These guides which are widely distributed (eg
all Vehicle Registration Offices and to all known importers) offer
advice and warnings about the possible consequences of buying
a grey import. They will soon be revised to take account of major
revisions to the Single Vehicle Approval Scheme (from January
2001) and will include information on possible safety-related
technical differences between type approved vehicles and grey
imports.
RECOMMENDATION K:
CLOTHING AND
FOOTWEAR: SELECTIVE
DISTRIBUTION ARRANGEMENTS
It would be helpful to know the Commission's response
to the encouragement from the Government to ask distributors to
make their selection criteria available regardless of whether
they possess market power
The Commission's view is that it is good practice
for suppliers to be open about the criteria they use for selective
distribution. If the Commission is investigating a selective distribution
system it requires the supplier to disclose its criteria to the
Commission. If a supplier notifies a selective distribution system
to the Commission for exemption the criteria will be published
for comment in the Official Journal.
However, DG Competition's powers to engage with
suppliers operating selective distribution systems are limited
to those cases where there is a potential competition problem.
Under revised EC competition rules, which came into force on 1
June 2000, agreements containing vertical restraints (including
selective distribution arrangements) are generally not deemed
to be anti-competitive if the market share of the supplier is
30 per cent or less, but there are provisions to examine individual
cases where there is a competition problem. DG Competition's position
on where there may be a competition problem is set out in Commission
Notice Guidelines on Vertical Restraints of 24 May 2000, paragraphs
184-198.
Where there is no apparent competition problem
the Commission would be reluctant to ask suppliers to make their
selection criteria available because at present it has no powers
to follow up such a request.
RECOMMENDATION M:
MUSIC
It would be helpful to have an update on how discussions
are progressing with the music industry on the role which trade
marks play and how their concerns can be met should international
exhaustion be applied to trade mark rights
On 13 April 2000, Government officials met the
record industry's two trade associations (Association of Independent
Music and British Phonographic Industry) to discuss their concerns
about the potential impact of changing our trade mark exhaustion
regime. The trade associations outlined their case and agreed
to provide evidence of how such a change could lead to a greater
influx of counterfeit material that evidence is still awaited,
but officials remain ready to discuss the issue further with the
trade associations in the light of such evidence.
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