Vertical Agreements Eu Regulation

A vertical agreement is a term used in competition law to refer to agreements between companies at different levels of the supply chain. For example, a consumer electronics manufacturer could have a vertical agreement with a retailer to promote its products in exchange for lower prices. Franchising is a form of vertical agreement and, according to EU competition law, this falls within the scope of Article 101. [1] The likelihood that such efficiency-enhancing effects will predominate anti-competitive effects due to restrictions in vertical agreements depends on the degree of market power of the parties to the agreement and, therefore, the extent to which these companies are exposed to competition from other suppliers of goods or services considered by their customers to be interchangeable or substitutable because of the characteristics of the products, their prices and their intended destination. It can be assumed that vertical agreements that do not contain certain types of serious restrictions on competition generally result in improved production or distribution and allow consumers to take a fair share of the benefits that result from them if the market share of each of the parties to the agreement does not exceed 30%. The evaluation showed that the VBER and vertical restriction guidelines remain relevant, as they are useful instruments that greatly facilitate the self-assessment of vertical agreements and help reduce compliance costs for companies that enter into such agreements. Beyond the 30% market share threshold, vertical agreements within the scope of Article 101, paragraph 1 of the Treaty, cannot generally result in objective advantages in this sense and in their size, in order to compensate for the disadvantages they cause for competition. At the same time, there is no presumption that these vertical agreements are either covered by Article 101, paragraph 1 of the Treaty or do not meet the conditions of Article 101, paragraph 3 of the Treaty. The prohibition under Article 101, paragraph 1 of the Treaty does not apply to the Period of 1 For agreements already in force on 31 May 2010 that do not meet the exemption requirements under this Regulation, but which, as of 31 May 2010, met the exemption requirements under Regulation (EC) No. 2790/1999.

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