Vertical Distribution Agreements

The European Commission has also published guidelines on vertical restrictions. It describes the approach of vertical agreements that are not covered by the regulation. If these conditions are not met, these vertical restrictions are excluded from the exemption under the regulation. However, the regulation continues to apply to the remaining portion of the vertical agreement where that part can operate independently of unsealed vertical restrictions. Contracting parties may include restrictions or contractual obligations in vertical agreements to protect an investment or simply to ensure day-to-day activity (for example. B, sales, supply or purchase agreements). There are cases where certain types of agreements do not automatically fall within the scope of Article 101 of the TFUE, for example. B: In addition, vertical agreements appear to be more effective in commercial activity. The most common vertical restrictions are whether a vertical agreement actually restricts competition and whether, in this case, the benefits outweigh the anti-competitive effects, often depends on the market structure. However, vertical agreements may present competitive risks if .B potential to increase barriers to entry, reduce or mitigate competition, and avoid other opportunities in the event of horizontal agreements. [2] Some vertical agreements probably contain restrictions that do not comply with Article 101 of the TFUE.

These are agreements that contain provisions: a vertical agreement falls under this regulation when neither the supplier nor the purchaser of the goods or services have a market share of more than 30%. For the supplier, it is its market share in the supply market in question, that is, the market in which it sells goods or services, that is decisive for the application of the category exemption. For the buyer, it is his market share in the purchase market in question, that is, the market in which he buys the goods or services, that is decisive for the application of the regulation. Vertical agreements are widely accepted because they are less likely to solve competition problems than horizontal agreements. Horizontal agreements are concluded between two current or potential competitors. The distribution of the market by territory or by customer is prohibited. Traders are free to choose where and to whom they sell. The regulation provides exceptions to this rule, for example with regard to the operation of an exclusive distribution system or a selective distribution system; Article 101, paragraph 1 of the TFUE prohibits agreements between companies with the purpose or effect of restricting, preventing or distorting competition within the Union and affecting trade between EU Member States. This prohibition is relevant to all agreements between two or more companies, whether they are competitors. The regulation applies to all vertical restrictions that are not the ones mentioned above.

However, it imposes three vertical restrictions on specific conditions: there is more flexibility than other vertical agreements. For example, the following types of agreements are not considered “pure” under the category exemption (they are called “non-hardcore”): Article 101, paragraph 1, of the EUTF prohibits agreements that can affect trade between EU countries and prevent, restrict or distort competition. However, agreements that have sufficient benefits to outweigh the anti-competitive effects are exempt from this prohibition under Article 101, paragraph 3, of the EUTS.