Vertical Agreements Guidelines

On 8 September, the European Commission (EC) published a Commission Staff Working Document summarising the results of its assessment of the Vertical Block Exemption Regulation (VBER) and the accompanying vertical guidelines (guidelines). The results show that VBER and guidelines are useful tools for companies to assess for themselves the compliance of their vertical agreements with EU competition law. However, the market has evolved significantly since the adoption of the VBER and the guidelines in 2010, notably with the growth of online distribution, the expanded role of online platforms and changes in distribution models. As a result, the Commission`s assessment highlighted a number of problems with the VBER and the guidelines to be addressed. Below we summarie the main problems identified and the likely priority areas for the EC when it begins the next phase of its review. The VBER and related directives expire on 31 May 2022. The Commission carried out a two-year evaluation to determine whether the VBER and the Guidelines should be terminated, renewed or revised by gathering information from different sources, including a public consultation, a targeted consultation of national competition authorities, a stakeholder workshop and an external study to support the evaluation. The Commission also gathered evidence through its e-commerce sector inquiry, which started in May 2015 and ended in May 2017. In addition, the EC`s experience with vertical restraints in recent years has allowed the EC to learn lessons. Clarification of the date of application of the block exemption for provisions on intellectual property rights The Guidelines have been amended to include more detailed guidelines on the conditions under which agreements containing provisions on intellectual property rights („IPRs“) are covered by the Block Exemption Regulation.

The guidelines (para. (30) lay down the following conditions: (a) provisions relating to the nature and decline of intellectual property must form part of a vertical agreement; (b) the provisions relating to the provisions relating to the mode of intellectual property must be attributed to or used by the buyer; (c) provisions relating to the nature and decline of intellectual property shall not constitute the main subject-matter of the agreement; (d) the provisions relating to the provisions relating to intellectual property rights and provisions must be directly related to the use, sale or resale of goods or services by the buyer or its customers; (e) the provisions relating to the provisions on resistance to intellectual property must not contain restrictions having the same aim or effect as vertical restraints which are not exempted by the Block Exemption Regulation. Vertical agreements which generally do not fall within the scope of Article 101 do not fall within the scope of the Block Exemption Regulation (Article 4(a)). Indirect fixing of resale prices is considered to include (para. 47 RAG), agreements fixing the distribution margin or the amount of the discount that the distributor may grant from a mandatory price level, which makes the granting of a discount or the reimbursement of advertising costs by the supplier conditional on compliance with a certain price level, the mandatory resale price being linked to the resale prices of competitors; Threats, intimidation, warnings, sanctions, delays or suspension of supplies or terminations of contracts with regard to compliance with a certain price level. On 24 May 2000, the European Commission adopted, in final form, its Guidelines on Vertical Restraints (the „Guidelines“). The new Vertical Agreement Block Exemption Regulation (Regulation (EC) No 2790/1999, hereinafter referred to as the `Block Exemption Regulation` or `new Regulation`) was adopted in December 1999 and enters into force on 1 January 1999. . in force on 1 June 2000. .

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