On Legal Regulation Of Restricting Competition In Terms Of Franchise

As a successful mode of retailing, franchising is becoming fashionable all over the world and attracts many franchisees to join in the franchising system .On reaching the franchising agreement, the franchiser will always take advantage of its economic dominance and franchising resources dominance to make proviso clauses to restrict the franchisee, which is called Vertical Restraint by antitrust laws or competition laws. The competition laws are not to protect the competitors but to protect the competition. As the result of competition is to optimize the social resources, all countries make competition laws or antitrust laws to limit the proviso agreement. In America, there are Sherman Act (1890) and Clayton Act (1914) to limit these vertical restraints. The US courts apply Per Se Rule and Rule of Reason to analyze the vertical restraints specifically. In EU, Article 81 and Article 82 of Treaty of European Union make to limit the vertical restraint agreements in principle. The EU committee made the 4087/88 Regulation in 1988, which was a special regulation about the franchising agreement. The 4087/88 Regulation made systematic provisions on the legality of the proviso clauses of franchising. Although the 4087/88 Regulation was invalid at the end of 1999, yet it is still worth for us to learn from.This article takes America, representative of the case law system, and the EU , representative of the statute law system for example .Through the analysis of the legislation and the judicature of competition laws, especially the leading cases of the States, the author gives a systematic discussion to the proviso clauses of franchising . The first part of this article is the general introduction of the proviso clauses of franchising. The second part is about the legal provisions of foreign countries on the proviso clauses of franchising. The third part gives a specific legal analysis of the Resale Price Maintenance Clause in franchising. The fourth part is the specific legal analysis of the Tying arrangement in franchising. At the end part of the article, the author puts forward several proposals with regard to application principles and mode of legislation in our country.