Clifford Chance

European Commission launches impact assessment phase in its review of the Vertical Block Exemption Regulation and Vertical Guidelines

30 October 2020

Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) prohibits agreements between undertakings that restrict competition unless they contribute to improving the production or distribution of goods or services or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits. 

The Vertical Block Exemption Regulation (VBER) (and its accompanying Vertical Guidelines (VGLs))  provides automatic exemption from the prohibition in Article 101(1) for vertical agreements that meet certain criteria. These criteria include that the market share of each of the parties to the agreement does not exceed 30% and there are no "hardcore" or "excluded" restrictions in the agreement such as resale price maintenance obligations. Vertical agreements are agreements entered into between two or more undertakings operating at different levels of the production or distribution chain – for example, between a manufacturer and a wholesaler.

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