NV IAZ International Belgium and others v. Commission (ANSEAU)

In European Union (EU) countries, it was common for dishwasher and washing-machine manufacturers to select one exclusive distributor for each European nation, called the sole distributor. EU law allowed vertical agreements barring sole distributors from marketing their products outside their assigned countries but banned agreements barring those same distributors from simply responding to purchase requests from outside their countries. As a result, parallel importers cropped up in many EU countries. They would request and buy machines from sole distributors in lower-price countries and then resell them at a profit in higher-price countries, competing with those countries’ sole distributors for sales. Belgium, a higher-price country, required appliances to meet certain standards to get hooked up to the water supply. A water-supply trade association called ANSEAU oversaw compliance, initially permitting installations of any appliances that complied with a checklist of standards and requirements. Eventually, ANSEAU reached an agreement with manufacturers and sole distributors to issue conformity labels, replacing the checklist system. This included NV IAZ International Belgium (NV IAZ) (plaintiff). These parties collectively had 90 percent of the market. Under the terms of their agreement, appliances without conformity labels could not be used in Belgium, and the parties refused to let parallel importers join the agreement or obtain labels for appliances they wished to sell. While drafting the agreement, certain participants confirmed among themselves that its purpose was to prevent or at least slow parallel imports. NV IAZ argued before the European Commission (the commission) (defendant) that the agreement was intended to increase compliance-check efficiency and that it had no restrictive effect on competition. The commission disagreed and found that the agreement was a horizontal restraint in violation of Article 101 of the Treaty on the Functioning of the European Union (TFEU). NV IAZ appealed.