COMPETITION • EUROPEAN LAW • RESTRICTIVE AGREEMENTS
Vertical restrictions s are restrictions of competition generally contained in vertical agreements, i.e. “agreements or concerted practices entered into between two or more undertakings each of which operates, for the purposes of the agreement or the concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services” (Regulation No 330/2010, Art. 1(1)(a). They are mainly exclusive purchase, exclusive distribution, selective distribution, motor vehicle distribution and franchise agreements.
Vertical restrictions are, under certain conditions, covered by the General Block Exemption Regulation No 330/2010 and its guidelines of 19 May 2010. To benefit from the exemption, the market share of both the supplier and the distributor must not exceed 30% and the agreement must not contain “hardcore restrictions” as referred to in Article 4 (minimum or fixed price clauses, clauses conferring absolute territorial protection, clauses prohibiting cross-supplies). Article 5 also provides a list of “excluded restrictions”, which are not exempted, but whose presence does not affect the validity of the rest of the agreement (non-compete obligations lasting more than five years, etc). Above the market share threshold of 30 %, there can be no presumption that vertical agreements falling within the scope of Article 101(1) of the Treaty will usually give rise to objective advantages of such a character and size as to compensate for the disadvantages which they create for competition (recital 9 of the General BER). On the other hand, while the presence of hardcore restrictions in an agreement may give rise to a presumption that it is anticompetitive, that presumption is rebuttable (Guidelines, pt. 47). The exemption will be granted if it is established that the hardcore restriction produces efficiencies and that the conditions set out in Article 101(3) TFEU are met. The prohibition of fixed minimum prices is not absolute. If the undertakings have more than 30% market share, the agreement will only qualify for an individual exemption. The exemption is retroactive and applies as soon as the agreement is concluded. Where the Regulation is not applicable, the guidelines must enable undertakings to verify the compatibility of their agreement with the provisions of Article 101(1).