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Revamp of the EU’s Rules on Vertical Agreements: It’s About the (Digital) Economy, Stupid!

 |  July 30, 2021

By: Kaan Gürer (D’Kart)

The VBER sets out the conditions under which vertical agreements can be exempted from the prohibition in Art. 101(1) TFEU. The much-awaited draft is mostly based on the Commission’s inception impact assessment paper released in October 2020 and (insofar not surprisingly) there is some light and also some shadow – always depending of course on where you stand. 

The Draft VBER strongly focuses on the digital economy, continuing the modernisation of the EU’s competition laws, following the draft Digital Markets Act (“DMA”) and the draft Digital Services Act (“DSA”) published at the end of last year – with the reforms of the Horizontal Guidelines already at the horizon. According to the Commission’s Executive Vice-President Margrethe Vestager the reform aims for nothing less than to adapt to the new digital era and to keep up with “the growth of e-commerce and online platforms, during the last decade”. 

So what are the main changes?

  • Restrictions on online sales through different prices compared to offline sales (so-called dual pricing) or by applying different criteria to distributors in a selective-distribution system based on whether they sell online or via “brick-and-mortar” stores (so-called equivalence principle) will no longer qualify as hardcore restrictions. 
  • Narrow parity obligations (i.e. Most Favoured Nation clauses – “MFNs”) are still within the safe harbour of the Draft VBER while wide parity provisions will no longer be block exempted.
  • Dual distribution will be subject to much stricter rules and hybrid online platforms would no longer benefit from any safe harbour. 
  • Restrictions which prevent from effectively using the Internet will (officially) become hardcore restrictions.