Vertical agreement

Competition law
Basic concepts
Anti-competitive practices
Enforcement authorities and organizations

A vertical agreement is a term used in competition law to denote agreements between firms at different levels of the supply chain. For instance, a manufacturer of consumer electronics might have a vertical agreement with a retailer according to which the latter would promote their products in return for lower prices. Franchising is a form of vertical agreement, and under European Union competition law this falls within the scope of Article 101.[1]

Whether a vertical agreement actually restricts competition and whether in that case the benefits outweigh the anti-competitive effects will often depend on the market structure.

EU competition law: block exemptions for vertical agreements

Vertical agreements that fulfil the conditions for exemption and do not contain any so-called "hardcore restrictions" of competition are exempted from the prohibition in Article 101(1) of the Treaty on the Functioning of the European Union by Regulation 330/2010 [2] . The main exception is agreements for motor vehicle distribution, which remain subject to Regulation 1400/2002 [3] until 31 May 2013, pursuant to a three-year extension granted in Regulation 461/2010.[4] Although this latter regulation applies Regulation 330/2010 to agreements for the repair of motor vehicles and for the distribution of spare parts as of 1 June 2013, it also supplements Regulation 330 with three additional "hardcore" clauses

See also

References

  1. ↑ Consten v. Grundig
  2. ↑ Commission Regulation (EU) 330/2010 on the application of Article 101(1) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices
  3. ↑ Commission Regulation (EC) NO 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector
  4. ↑ Commission Regulation (EU) 461/2010 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 in the motor vehicle sector
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