On June 1, 2022, the new European Vertical Block Exemption Regulation (Vertical BER) came into force. Companies must prepare for some innovations and changes in distribution law.
The new Vertical Block Exemption Regulation (Vertical BER) came into force together with the new Vertical Guidelines on June 1, 2022. It regulates when competition restrictions are permitted or prohibited. This is particularly relevant to distribution agreements, explains the commercial law firm MTR Rechtsanwälte.
According to Article 101 (1) TFEU (Treaty on the Functioning of the European Union), agreements are prohibited if they result in significant restrictions or impediments to competition. According to the Vertical BER, agreements between companies at different levels of the production and distribution chain are exempt from this prohibition under certain conditions. This includes vertical agreements between producers and retailers. Essentially, this remains unchanged.
The condition for this is that neither supplier nor buyer exceeds the market share threshold of 30 percent and no severe competition restrictions exist. The so-called core restrictions of vertical price fixing and territorial and customer group restrictions remain.
Changes occur in dual distribution, where the manufacturer sells its products not only through retailers but also directly to end customers. Here, an exemption is only possible if the information exchange directly relates to the implementation of the vertical agreement or is necessary for improving production or distribution. Certain aspects of dual distribution will, therefore, no longer be exempt.
Another change concerns the so-called parity obligations. Here, the seller commits to offering its contracting partners conditions that are equivalent to the conditions of third-party distribution channels, e.g., other platforms, or the seller’s direct distribution channels, e.g., its own websites. Even here, certain aspects under the new Vertical BER are no longer exempt but must be reviewed in individual cases according to Article 101 TFEU.
On the other hand, certain restrictions are reduced. This includes, for example, the ability of the buyer to actively approach individual customers or certain aspects of online sales.
Further points of the new Vertical BER include aspects such as non-competition clauses, sustainability, or the commercial agent privilege.
Manufacturers and retailers should adapt to the new regulations to avoid fines. Lawyers experienced in distribution law provide advice.
