European Commission consults on draft revised Vertical Block Exemption Regulation and Vertical Guidelines

July 14, 2021

The European Commission has launched a consultation on its draft revised Vertical Block Exemption Regulation (VBER) and Vertical Guidelines.

Vertical agreements are agreements entered into between two or more undertakings operating at different levels of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services.

Article 101(1) TFEU prohibits agreements between undertakings that restrict competition. However, under Article 101(3) TFEU, such agreements can be declared compatible with the Single Market, as long as they contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits without eliminating competition.

The VBER (330/2010/EU) exempts vertical agreements that meet certain conditions from the prohibition in Article 101(1) TFEU, thus creating a safe harbour for those agreements. The Commission also adopted the Guidelines on Vertical Restraints. These provide guidance on how to interpret and apply the VBER and how to assess vertical agreements falling outside the safe harbour of the VBER.

The VBER and Vertical Guidelines were reviewed from 2018 and the new drafts aim to deal with situations where the review pointed to a lack of clarity or the existence of gaps, or where the current rules are no longer suited to the market realities. In particular, the proposed changes aim to: 

  • Readjust the safe harbour provided by the VBER to its intended scope, regarding the four areas of dual distribution, parity obligations, active sales restrictions, and certain indirect measures restricting online sales;
  • Provide stakeholders with up-to-date guidance for a business environment reshaped by the growth of e-commerce and online platforms and ensuring a more harmonised application of the vertical rules across the EU. In particular, the application of the VBER and the Vertical guidelines to online sales and advertising restrictions, will be clarified further and specific rules and guidance relating to the platform economy will be included; and
  • Reduce compliance costs for businesses, notably small and medium-sized enterprises, by simplifying and clarifying certain provisions perceived as particularly complex and difficult to implement.

The consultation ends on 17 September 2021.