On 1 June 2022, Commission Regulation (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices (“VBER”) and guidelines on vertical restraints (“Vertical Guidelines”) entered into force and will expire on 31 May 2034. There is a one-year transitional period for agreements already in force on 31 May 2022 that satisfy the conditions for exemption under the current VBER, but do not satisfy the conditions under the VBER.
The package introduces important changes for the treatment of distribution agreements under EU competition law, in particular to the rules governing the combination of several different distribution systems, dual distribution, dual pricing and parity obligations.
The VBER provides parties to vertical agreements (i.e. agreements entered into between businesses operating at different levels of the supply chain) with increased certainty about the compatibility of their agreements with Article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”), by creating a safe harbour exemption.
If neither party’s market share exceeds 30% on the relevant sales and purchasing markets, vertical agreements, which do not contain any so-called “hardcore restrictions” (including, for example, resale price maintenance or certain territorial/customer restrictions), automatically benefit from an exemption. Agreements that do not satisfy the VBER conditions may still be compatible with Article 101(1) TFEU, but these agreements require individual assessment pursuant to Article 101(3) TFEU.
The Vertical Guidelines aim to help companies to self-assess whether their agreements are covered by the VBER or may qualify for an individual exemption pursuant to Article 101(3) TFEU.