Consten & Grundig v Commission (1966)

Contract of exclusive distribution with absolute territorial protection.
Grundig granted Consten sole distributorship for its
electrical products in France.
French territory insulated – Consten could not sell
goods outside France and Grundig distributors in other countries could not sell
outside their own countries.
But company called UNEF bought Grundig goods in Germany
and sold them in France cheaper than Consten.
UNEF contended agreement between Grundig and Consten
violated Article 85 (now 81).
ECJ held that although competition between producers
is generally more noticeable than that between distributors of products of same
make, does not follow that agreement to restrict latter kind should escape Article
85 merely because it might increase former.
Situation in this case results in isolation of French market
and makes it possible to charge for products in question ‘prices which are
sheltered from all effective competition’.
This distorts competition within common market.