Vertical Agreements Consultation

October 13, 2021 8:04 pm Published by Leave your thoughts

The evaluation showed that the BERVs and vertical guidelines remain relevant. There is a consensus that they are useful instruments that significantly facilitate the self-assessment of vertical agreements and thus contribute to reducing compliance costs for companies entering into such agreements. The evaluation also indicates that the case law and practice of applying certain vertical agreements and related restrictions have evolved considerably since the adoption of the VBER. We can expect the VBER and vertical guidelines to be updated to reflect relevant EU case law. With regard to selective distribution agreements, for example, a number of important judgments have been delivered, including: in our response to the consultation, we voted in favour of an approach better adapted to the needs of businesses. Finally, the Commission`s consultation is a good opportunity to clarify certain grey areas in the current VBER and in the guidelines. The objective of the RVO is to exclude from the prohibition of Article 101(1) TFEU vertical agreements which can be assumed to fulfil the conditions set out in Article 101(3) because they do not affect competition. The vertical guidelines provide guidance for the interpretation of the VBER and Article 101. The general principle (with a few exceptions) is that an agreement falls under VBER`s safe harbor, unless it controls “hardcore” restrictions and provided that producers and distributors do not hold more than 30% of the market share. The system aims to ensure legal certainty and promote efficiency. The report on supporting studies published by the Commission on 26 May 2020 confirms the results of the public consultation, as the current rules do not sufficiently address issues relating to online sales and online platforms. The more than 700-page report also provides an overview of the likely direction of the Commission`s revision of the VBER and vertical guidelines.

Until recently, the vast majority of case law on vertical restraints was at the level of national competition authorities and national courts. The Commission`s final report on the e-commerce sector inquiry was a turning point. Since its publication in May 2017, the Commission has again shown interest in vertical restraints and fined several companies in 2018 for restrictions on MPRs and cross-selling. It fined Nike and Guess, which limited cross-border sales in 2019. The Coty judgment of the Court of Justice of the European Communities (“ECJ”) also focused on the issue of the sale of online marketplaces, as the ECJ considered that a ban on platforms in a selective distribution system was permitted in certain circumstances. These recent decisions show that vertical agreements are likely to continue to be a topic of interest, including at the level of EU authorities. It is therefore important to carry out an up-to-date assessment of the effectiveness, efficiency and relevance of the VBER and its guidelines, taking into account the digital developments that influence vertical relationships. Although the final report takes a first look at the likely merger, the Commission still needs to carry out a detailed impact assessment, which means that no new rules are expected before the expiry of the VBER in May 2022. For the purposes of competition law, vertical agreements are agreements between parties operating at different levels of the economic supply chain. It is generally accepted that vertical restraints tend to be less harmful to competition than horizontal restraints (agreements between competitors operating at the same level).

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