COMPETITION • EUROPEAN LAW • RESTRICTIVE AGREEMENTS
A non-compete obligation is defined by Article 1 of Regulation No 330/2010 as “any direct or indirect obligation causing the buyer not to manufacture, purchase, sell or resell goods or services which compete with the contract goods or services, or any direct or indirect obligation on the buyer to purchase from the supplier or from another undertaking designated by the supplier more than 80 % of the buyer’s total purchases of the contract goods or services and their substitutes on the relevant market, calculated on the basis of the value or, where such is standard industry practice, the volume of its purchases in the preceding calendar year”. Non-compete obligations may be direct or indirect. They may be a prohibition on distributors not to source competing products or an exclusive purchasing arrangement, or, conversely, a prohibition on the supplier from dealing with competitors of the distributor. Their duration is limited to five years. Obligations of indefinite duration or with a duration of more than five years are not covered by the Block Exemption Regulation (Guidelines on Vertical Restraints, pt 66).
