The European Commission recently released a draft revised regulation on vertical agreements and vertical guidelines which aims to update and modernize the current rules governing the relationship between suppliers and distributors in the EU.
Vertical agreements are agreements between firms operating at different levels of the production or supply chain, such as agreements between manufacturers and distributors. They can bring benefits such as increased efficiency and reduced costs, but they can also have negative effects on competition and consumer welfare.
The revised regulation includes several changes to the current rules. Firstly, it clarifies the conditions under which vertical agreements are permitted, such as restrictions on online sales, territorial restrictions and price restrictions. Secondly, it introduces new rules on dual distribution, which refers to situations where a supplier sells directly to consumers as well as to distributors. Lastly, it updates the rules on information exchange between suppliers and distributors to ensure they comply with data protection regulations.
The accompanying vertical guidelines provide further guidance on how the revised regulation will be enforced. They clarify the key concepts and provide specific examples of the types of vertical agreements that are likely to have anti-competitive effects.
The European Commission hopes that the revisions will strike the right balance between allowing firms to benefit from vertical agreements while protecting competition and consumers. It is inviting comments from interested parties until 17 September 2021, and the final revised regulation and guidelines are expected to be adopted in 2022.
For businesses operating in the EU, it is important to stay up to date with these regulatory changes and to ensure that any vertical agreements comply with the revised rules. This may involve reviewing existing agreements and making changes to ensure compliance, or seeking legal advice on the potential impact of the changes on future agreements.