Vabe Vertical Agreements Block Exemption

Regardless of the EC`s decision on how category exemptions will work after Brexit, this is an unfortunate issue. Under Section 3 of the European Union (Withdrawal) Act 2018, “the “direct right of union,” including most of the provisions in force immediately before the withdrawal date, “is an integral part of national law on the date and following the withdrawal.” Indeed, the VABE Regulation is one of seven exemptions per EU category that are transposed into UK national law as “maintained derogations”. It is clear that category exemptions in uk national competition law will play an important role in the short term, given that the Competition Act 1998 was deliberately based on EU rules. But in the medium and long term, it becomes less clear. No change: Many of the elements contained in the previous version of the VABE remain unchanged. In particular, vaBE still does not apply to agreements that have “hardcore” restrictions such as minimum and fixed resale prices, as well as certain types of territorial protection. As in the past, the duration of non-competition clauses must not exceed or be indeterminate for five years. However, if the agreement is subject to prohibition, the parties must continue to consider whether the benefits of the agreement justify the imposition of such competition restrictions and whether the agreement meets the following criteria for individual exemption: if an agreement contains one or more of the aforementioned characterized restrictions, it is highly unlikely that it will benefit from an individual exemption. The European Commission has published a revised category exemption regulation and guidelines for vertical agreements (agreements between parties at different levels of the production or distribution chain). All companies participating in supply and distribution agreements should consider the new rules to ensure that their existing or new agreements are covered by the revised legislation. When an agreement meets the conditions of the vertical agreements “VABE” category exemption, it is exempt from the prohibition of anti-competitive agreements (in accordance with Article 101, paragraph 1 of the treaty), resulting in significant efficiency gains for the companies concerned, including increased legal certainty. The prohibition under Article 101, paragraph 1, includes agreements between companies operating at different levels of the production or distribution chain and the conditions under which parties can buy, sell or resell certain goods or services (so-called “vertical” agreements).

The limitation of market share, the non-release of certain vertical agreements and the conditions set out in this Regulation normally ensure that the agreements to which the category exemption applies do not allow the companies concerned to eliminate competition for a substantial part of the products concerned. In deciding whether to withdraw the benefits of this regulation in accordance with Article 29 of Regulation (EC) No. 1/2003, the anti-competitive effects that may result from the existence of parallel networks of vertical agreements with similar effects that significantly limit access to or competition in a particular market. These cumulative effects can occur, for example. B, in the case of selective ban on distribution or non-competition. 2. The Article 2 exemption remains applicable if, for a period of two consecutive years, the annual turnover threshold is not exceeded by more than 10%. Vertical agreements include distribution agreements (exclusive and selective), franchising, supply and agency agreements between non-competitors (i.e.

those who do not compete in the product market that is the subject of the agreement).