Block Exemption Regulation Vertical Agreements Guidelines

The evaluation also indicates that, since the adoption of the VBER, judicial and enforcement practices relating to certain vertical agreements and related restrictions have developed considerably. We can expect the VB and vertical directives to be updated to reflect EU jurisprudence on this issue. For example, under selective distribution agreements, a number of important judgments have been issued, including: on 8 September, the European Commission (EC) published a working paper from the Commission`s services summarising the results of its assessment of the Vertical Category Exemption Regulation (VBER) and the accompanying vertical guidelines. The results show that the VBER and the guidelines are useful instruments for companies to assess their own compliance with EU competition law. However, since the introduction of the VBER and the guidelines in 2010, the market has changed significantly, due in part to growth in online revenue, the increased role of online platforms and changes in distribution models. As a result, the EC`s assessment highlighted a number of problems with the VBER and the guidelines to be addressed. Below are the main themes identified and the likely priority areas for the EC at the beginning of the next phase of its review. Until recently, the vast majority of vertical restriction jurisprudence was at the level of NCAs and national courts. The Commission`s final report on the sectoral inquiry into e-commerce was a turning point. Since its publication in May 2017, the Commission has reiterated its interest in vertical restrictions and in 2018 has imposed fines on several companies for restrictions on MPRs and cross-selling. It fined Nike and Guess for restricting cross-border sales in 2019.

The judgment of the European Court of Justice (ECJ) also focused on the issue of the sale of online marketplaces, with the ECJ ruling that a ban on a platform in a selective distribution system was permitted in certain circumstances. These recent decisions show that vertical agreements are likely to remain a topic of interest, including at the level of the EU authorities. Therefore, the current assessment of the effectiveness, efficiency and relevance of the VBER and its guidelines is important in light of digital changes in vertical relationships. Although the final report provides an overview of the likely priority, the Commission still needs to carry out a detailed impact assessment, which means that no new regulations are expected before the expiration of the VBER in May 2022. In recent years, franchising has become an increasingly popular sales structure throughout the EU.

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