Vertical restraints | 500 Questions - Business Law (Chapter 1.3.1) • Livv

204. What were the characteristics of the first regulations?

The exemption may be granted, by regulation, on the basis of Article 101(3) TFEU, which provides that Article 101(1) may be declared inapplicable to “categories” of agreements. The Commission has made extensive use of this possibility of block …

205. What are "new generation" regulations?

Aware of the difficulties raised by the application of traditional regulations, the European authorities decided to develop more economically based exemption rules (i.e., essentially based on economic power thresholds calculated in market shares) …

206. What were the conditions for exemption in Regulation No 2790/1999 (01/06/2000-31/05/2010)?

Adopted on 22 December 1999, Regulation No 2790/1999, which established a presumption of legality in favor of agreements below the 30% market share threshold that contained neither hardcore restrictions nor red clauses, constituted a first …

207. What were the conditions for exemption in Regulation No 330/2010 (01/08/2010-31/05/2022)?

Regulation No 2790/1999 was replaced by Regulation No 330/2010 of 20 April 2010 concerning the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices. The …

208. What were the conditions for exemption in Regulation No 461/2010 (01 June 2010-31 May 2023)?

The Commission decided not to simply replace the old block exemption regulation with the new general regulation for the Motor Vehicle BER No 1400/2002, which expired on 31 May 2010. Instead, it chose to apply different legal regimes to distribution …

209. What are the conditions for exemption in Regulation No 2022/720 (01 June 2022-31 May 2034)?

Regulation No 330/2010 expiring, the Commission adopted Regulation No 2022/720 on 10 May 2022, which extends the exemption for vertical agreements and takes into account the latest market developments, particularly the significance of online sales …

210. Who can withdraw the block exemption?

New Regulation No 2022/720 and its guidelines detail more precisely than in the past the conditions for withdrawing a block exemption as well as the distribution of powers between the Commission and the national competition authorities (NCAs). …

211. Can a distribution agreement exempted by European law be prohibited by national competition law?

Under Regulation No 1/2003, when the competition authorities of the Member States apply national competition law to practices prohibited by Articles 101 and 102 TFEU, they must also apply European law concurrently. The principle of the primacy of …

212. Under what conditions can dual distribution benefit from the block exemption?

Dual distribution corresponds to a system of dual distribution to final customers, on the one hand by the supplier's distributors, and on the other hand by the supplier itself in the form of direct sales (through its branches or subsidiaries, or …

213. What exchanges of information are possible between a supplier and a distributor both selling to end customers?

While being aware that the operation of a distribution contract and a network requires continuous information flows, the Commission restricts the benefit of the exemption, in the case of dual distribution, to exchanges of information directly …

214. What are the conditions for the exemption of contractual non-compete clauses?

Non-compete obligations, as defined in Article 1(1)(f) of Regulation No 2022/720, are agreements that require the buyer to make more than 80% of the total of its purchases of contractual goods and services and their substitutes during the previous …

215. What are the conditions for exemption of post-contractual non-compete clauses?

In accordance with Article 5(1)(b), in conjunction with Article 5(3), of Regulation No 2022/720, which does not amend the previous regime, non-compete obligations imposed on the buyer that continue to apply after the expiration of the agreement are …

216. How can we ensure the coexistence of different distribution systems across EU Member States?

If many suppliers adopt a uniform distribution system for the whole of Europe, some choose different systems depending on the states and juxtapose selective, exclusive, or free distribution. This strategy, accepted by the competition authorities , …

217. To what type of clientele can the resale of contractual products be prohibited in the case of exclusive distribution?

The new regulation significantly strengthens the protection of distribution networks, whether the network head has opted for exclusive, selective, or free distribution. The new regulation facilitates in every respect the strategy of the network …

218. To what type of clientele can the resale of contractual products be prohibited in the case of selective distribution?

Selective distribution is a system in which the supplier undertakes to sell the contract goods or services, directly or indirectly, only to distributors selected based on defined criteria, and in which these distributors undertake not to sell these …

219. What are the rules with regard to independent distributors?

For the first time, the new legislation provide specific rules for independent distribution or “free distribution systems” according to the guidelines, which addresses the case where the supplier distributes its goods or services without resorting …

220. Under what conditions is it possible for a supplier to practice dual pricing depending on whether the contractual products are resold online or in-store?

Until now, the practice of applying a dual pricing system to the same distributor depending on whether the product was intended for resale in a physical store or online was considered a characterized restriction of passive sales (2010 Guidelines, …

221. Can prices be recommended or minimum, fixed, or maximum prices imposed?

Under the new regulation, resale price maintenance (RPM) constitutes a hardcore restriction that excludes the benefit of the block exemption (Reg. No 2022/720, Art. 4(a)). The guidelines detail the interpretation to be made of this prohibition for …

222. Can multiple exclusive distributors be appointed for the same territory or the same clientele?

Under the previous regulations, only exclusivity granted to a single distributor for a given territory or clientele was expressly block exempted up to 30% market share. With Regulation No 2022/720, it is now possible to allocate a territory or …

223. Under what conditions can online sales be subject to certain conditions?

A distribution network can manage internet sales in a differentiated and evolving manner, by authorizing them without limit, strictly regulating them in compliance with the law, or adopting a multi-channel strategy that encourages the coexistence …

224. What risks must agents exclude from their dealings with their principal to fall outside the scope of competition law?

Article 101(1) TFEU, prohibits agreements between undertakings. The concept of an undertaking is purely economic and refers to any autonomous economic entity. According to the Court of Justice, agents do not, in principle, constitute undertakings …