Clifford Chance

The new EU and UK competition regimes for distribution arrangements

19 May 2022

The European Commission has published the final revised texts of its Vertical Guidelines and Vertical Block Exemption Regulation (the VBER), which provide a widely-applicable safe harbour for distribution arrangements from the EU prohibition on anticompetitive agreements. The new rules enter into force on 1 June 2022, with a one-year transition period for existing arrangements. They will be valid for a maximum of twelve years and will be evaluated by the Commission after eight years in place.

The Commission's changes, made after an extensive public consultation process throughout 2021 and 2022, reflect the significant changes in market dynamics since the VBER was last updated in 2010. For example, the increased use of "dual distribution" models - where suppliers compete with their distributors in certain sales channels - has prompted changes to the treatment of such arrangements, and the growth of online sales in recent years has resulted in giving suppliers more freedom to support physical sales channels. Various other changes will allow suppliers more flexibility to restrict their distributors from selling to certain territories or customer groups.

Following the UK's departure from the EU, the UK Government recently announced the final version of its "Vertical Agreements Block Exemption Order", which differs from the equivalent EU VBER in certain material respects.

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