Overview

The European Commission has adopted a new block exemption Regulation and Guidelines for vertical agreements. The new rules will come into force on 1 June 2010 when the current regulations expire. The new rules provide for a one-year transitional period for existing agreements which, as of 31 May 2010, satisfy the conditions for exemption provided for in the original regulations.

Although it has been widely accepted that the current regime has worked well in practice, the Commission wanted to take the opportunity of the reform to introduce a number of changes that take account of market developments over recent years. The main developments focused on by the Commission are the increase in the number of large distributors and retailers with market power and the greater significance of online sales.

In order to reflect these developments, the new Regulation introduces a new safe harbour market share threshold of 30% for the buyer, in addition to the existing 30% threshold for the supplier. In respect of online sales, the new guidelines now provide detailed guidance regarding restrictions on online sales, and start from the premise that in principle every distributor must be allowed to use the internet to sell its products.

Click to read more.