The Council has given the Commission its green light to continue the reform process of competition policy applicable to vertical restraints.
Two new Regulations will amend the famous Regulations 19/65/EEC of 2 March 1965 and Council Regulation 17 of 6 February 1962.
Vertical agreements are concluded between firms operating at different levels of the production or distribution chain and define the conditions under which the firms may acquire, sell or re-sell certain goods or services. This covers in fact all industrial distribution and supply agreements.
From now on, the Commission can draw up and adopt a broad exemption regulation covering all vertical restraints affecting finished or intermediate products and services, including vertical agreements concluded by certain associations of retailers. The block exemption will be subject to certain conditions and will apply only to firms whose market shares do not exceed a specific threshold. This threshold should be of 30% market share.
The Commission's block exemption regulation will exclude certain fundamental restrictions, such as practices involving the imposition of resale prices and certain forms of territorial protection preventing market integration.
The second new regulation broadens the scope of application of Article 4(2) of Regulation 17, exempting all vertical agreements from the requirement that they be notified prior to individual exemption. The advantage of this change is that the Commission will in the future, even in the event of late notification, be able to adopt an exemption decision taking effect on the date in which the agreement was concluded. This retroactive exemption will give greater legal certainty by ensuring that agreements that meet the exemption conditions laid down in Article 85(3) of the EC Treaty can be implemented.
The Commission in May will formally adopt the two new regulations. The two regulations will enter into force on the third day following their publication in the Official Journal. The Commission will then publish, after consultation with the Member States, a draft block exemption regulation and draft guidelines intended to clarify its policy in cases not covered by the block exemption regulation. All interested third parties will be able to make their comments on the draft regulation and guidelines.
This article is based and incorporates information provided by the European Commission (Press Releases) and is intended for general information. Specialist advice should be sought before acting on it.
EU competition rules applicable to vertical restraints can now be changed
