The EU Vertical Agreement Block Exemption: What You Need to Know

If you`re a business operating within the European Union (EU), it`s important to understand the EU Vertical Agreement Block Exemption. This regulation provides an exemption for certain types of agreements between suppliers and resellers, allowing them to operate within the EU without fear of violating EU competition law.

What is a Vertical Agreement?

Before we dive into the details of the EU Vertical Agreement Block Exemption, let`s first define what a vertical agreement is. A vertical agreement is a business arrangement between two companies at different levels of the supply chain. For example, a supplier and a reseller, or a manufacturer and a distributor. Vertical agreements can cover a wide range of activities, from pricing and distribution to marketing and advertising.

What is the EU Vertical Agreement Block Exemption?

The EU Vertical Agreement Block Exemption is a regulation that provides an exemption for certain types of vertical agreements from EU competition law. The exemption applies to agreements that meet certain conditions, such as those that do not contain hardcore restrictions, and where the parties` combined market share does not exceed certain thresholds.

The purpose of the EU Vertical Agreement Block Exemption is to encourage competition while still allowing for efficient and effective distribution of goods and services within the EU. By exempting certain agreements from competition law, businesses are able to enter into agreements that benefit both parties without fear of violating EU competition law.

What are the Conditions for Exemption?

As mentioned earlier, not all vertical agreements are exempt from EU competition law under the EU Vertical Agreement Block Exemption. To qualify for exemption, the agreement must meet certain conditions, including:

– The agreement must not contain hardcore restrictions, such as price fixing, territorial restrictions or resale price maintenance.

– The market share of the parties must not exceed certain thresholds. For agreements between competitors, the market share threshold is 30%. For agreements between non-competitors, the market share threshold is 40%.

What are the Benefits?

The benefits of the EU Vertical Agreement Block Exemption are clear. By exempting certain vertical agreements from EU competition law, businesses are able to enter into agreements that benefit both parties without fear of violating EU competition law. This allows for more efficient and effective distribution of goods and services within the EU.

In addition, the EU Vertical Agreement Block Exemption can help to foster innovation and economic growth within the EU by encouraging businesses to enter into agreements that promote competition and efficiency.

Conclusion

In summary, the EU Vertical Agreement Block Exemption is an important regulation for businesses operating within the EU. By providing an exemption for certain types of vertical agreements from EU competition law, the regulation allows for efficient and effective distribution of goods and services within the EU while still encouraging healthy competition. If you`re a business operating within the EU, it`s important to understand the EU Vertical Agreement Block Exemption and how it applies to your business.