JUVE Law Firm of the year

Distribution and Franchising

Digitalization: The wheel is spinning faster

The shockwaves from the emissions scandal have not even subsided and already there is another: antitrust allegations against German auto manufacturers. German carmakers have been zealously pushing digital projects like connected cars and autonomous driving – and these entail the development of new distribution concepts, mostly in the increasingly significant online trade.

Digital competition is posing a threat not just to the business models of auto manufacturers but to those of dealers too. Fintech solutions represent new elements in payment and service transactions and make it possible to take out insurance policies or loans, or sign building loan contracts, via an app. While the trend toward consumer goods trading on the Internet poses legal questions about transport and logistics, financial products offered online raise regulatory issues.

In this respect, many companies are entering new legal territory. Where there are no precedent cases pointing the way yet, the market is hoping for clarity from pilot proceedings, like those in the antitrust dispute over selective distribution systems. Düsseldorf Higher Regional Court (Oberlandesgericht) dismissed the suit by sporting goods manufacturer Asics against a ruling by the Federal Cartel Office: brand manufacturers cannot prohibit traders from using price search engines and online sales portals.

Given these developments, the question in many companies is: how compliant is my distribution system? One particular driver of this question is the new EU General Data Protection Regulation, which is to be implemented by May 2018.

Data protection issues demand IT expertise

Because of the flood of data generated within distribution and franchising systems, the demand for advice on data security is rising rapidly. Firms with strong IT practices like Noerr and Hogan Lovells can position themselves here. But young partners in boutiques like Schindler and Schlarmann von Geyso are now specializing in IT and data protection as well.

Law firms opening in Iran

Cross-border work continued to increase in relevance, driven largely by interest in entering the Iranian market. Following CMS Hasche Sigle, Rödl & Partner secured a pole position by opening its own office there. But firms with a strong focus on customs and trade like Graf von Westphalen have a strong position when it comes to sanction and embargo matters in distribution systems.

While some firms like Schindler and Friedrich Graf von Westphalen & Partner are visibly working on the generation change, others are still plagued by worries about young talent. One firm with no generation problem is Osborne Clarke, which expanded its practice to the Munich office with a new arrival from CMS Hasche Sigle.

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