On 10th May 2022 the European Commission has adopted the new Vertical Block Exemption Regulation (‘VBER') accompanied by the new Vertical Guidelines. The Regulation follows an evaluation and review of the 2010 rules, and the European Commission has stressed that “the new rules will provide companies with up-to-date guidance that is fit for an even more digitalized decade ahead”.

The Vertical Block Exemption Regulations exempt from the prohibition in Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU') agreements between manufacturers and distributors provided their agreements do not contain price-fixing and other hardcore restrictions and both do not have over a 30% market share.

The main changes were summarized by the Commission as:

  • Narrow the scope of the safe harbour as regards: (i) dual distribution, that is, where a supplier sells its goods or services through independent distributors but also directly to end customers, and (ii) parity obligations, that is, obligations which require a seller to offer the same or better conditions to its counter-party as those offered on third-party sales channels, such as other platforms, and/or on the seller's direct sales channels, like its website. This means that certain aspects of dual distribution and certain types of parity obligations will no longer be exempted under the new VBER but must instead be assessed individually under Article 101 TFEU.
  • Enlarge the scope of the safe harbour as regards: (i) certain restrictions of a buyer's ability to actively approach individual customers, i.e. active sales, and (ii) certain practices relating to online sales, namely the ability to charge the same distributor different wholesale prices for products to be sold online and offline and the ability to impose different criteria for online and offline sales in selective distribution systems. These restrictions are now exempted under the new VBER, provided all other conditions for the exemption are met.

Additional detailed information on the main changes can be found in an explanatory note that accompanies the revised rules. The revised VBER and Vertical Guidelines will enter into force on 1 June 2022.

CEMA has been following the review process from its start, and it contributed to the European Commission’s open public consultation, bringing forward the industry’s views and concerns.

 More information can be found here and here.