The Romanian Competition Council (‘RCC’) sanctioned Euro Parts Distribution SRL and 15 franchisees operating within the epiesa.ro and targuldepiese.ro franchise networks with fines totalling 4.49 million RON (approx. 881,000 EUR) for competition law infringements concerning the resale prices of automotive spare parts and accessories.
The infringement
According to the RCC, between 2018 and 2023, Euro Parts Distribution and its franchisees included and implemented contractual provisions in their franchise agreements requiring franchisees to sell automotive spare parts and accessories through their physical stores at the prices displayed on the epiesa.ro and targuldepiese.ro websites operated by the franchisor.
The Competition Council found that these arrangements restricted the franchisees’ ability to determine their own resale prices and therefore amounted to resale price maintenance (‘RPM’), a form of restriction that remains a serious competition law infringement, including in franchise systems.
In its press release, the authority emphasised that, while franchising is a legitimate and widely used business model that may entail the adoption of common standards designed to preserve the identity and operation of the network, such considerations cannot justify restrictions that eliminate the commercial freedom of franchisees to set their own resale prices.
The investigation forms part of a broader review undertaken by the Competition Council into the compliance of franchise systems operating in Romania with competition rules.
Commentary
The decision represents a significant development in the Romanian Competition Council's enforcement practice concerning franchise systems. While the authority has previously examined competition law issues arising in franchise networks, most notably in the Fornetti case, which was resolved through commitments, the present case is among the first Romanian competition law decisions to result in fines being imposed in connection with the operation of a franchise network.
The case provides an important reminder that, although franchise systems may legitimately require a degree of standardisation to protect the brand, preserve network identity and ensure consistent commercial standards, competition law places limits on the extent to which franchisors may influence franchisees' pricing behaviour.
Once published, the full decision may offer useful guidance on the Competition Council's approach to assessing franchise agreements and, in particular, on how it distinguishes between restrictions that are inherent in the operation of a franchise system and restrictions that amount to hardcore competition law infringements, such as resale price maintenance.
More broadly, the decision confirms the Competition Council's continued focus on vertical restraints and signals increased scrutiny of franchise arrangements, particularly where contractual provisions affect the commercial independence of franchisees.
The press release is available here.
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