Originally published 29 July 2009

Keywords: European Commission, draft antitrust rules, distribution agreements, Verticals Block Exemption Regulation, VBER, guidelines, Vertical Restraints, restrictions, stakeholders

On Tuesday, 28 July 2009, the European Commission ("Commission") published drafts of both a reviewed Verticals Block Exemption Regulation ("VBER") and of the accompanying Guidelines on Vertical Restraints ("Guidelines"). The current VBER from 1999 (N° 2790/1999) will expire in May 2010 and is therefore currently being reviewed by the Commission. The VBER exempts certain agreements between suppliers and retailers from the application of Art. 81 EC. The new set of rules will likely be in force until 2020.

Although the Commission "considers that the rules are working well overall and should not be fundamentally modified", there are a number of changes that will considerably impact business in Europe and beyond.

The drafts include the following changes:

  • In order to be exempted, the market shares of both undertakings party to the agreement, i.e. suppliers and buyers, have to be lower than 30 %. This will add new buying power issues to antitrust analysis;
  • Stricter and more detailed rules apply to the restrictions a supplier can impose on online sales, in particular, in selective distribution systems;
  • Resale price maintenance, is generally still considered a hardcore restriction. However, the presumption of illegality will be easier to rebut under certain conditions where the Commission commits to effectively assessing an efficiency defence;
  • Rules on category management and upfront access payments, such as slotting allowances, have been introduced.

More specifically, the provisions on online sales might make changes to current distribution models necessary, especially for the manufacturers of branded goods. Business stakeholders are therefore invited to take part in the Commission's public consultation on the drafts that will be open from 28 July to 28 September 2009. The Commission is expected to adopt the final measures towards the end of 2009.

Interested stakeholders should not miss this opportunity to share their views with the Commission on the working of the current rules and the impact the reviewed ones could have.

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