Insights

Businesses distributing goods and services in the EU rely on the Vertical Block Exemption Regulation (VBER) for legal certainty. The VBER and the accompanying guidelines set out the conditions under which distribution agreements are presumed to comply with EU competition law. The current VBER is set to expire on May 31, 2022. Over the past few years, the Commission has been working with stakeholders to assess, update and amend the existing rules to take account of market developments, including the emergence of online platforms and e-commerce (see also our Client Alert of October 26, 2020). The most important changes proposed by the Commission can be summarized as follows:

Caudalie operates a selective distribution network for the sale of cosmetic products. To protect its luxury image, Caudalie included certain restrictive clauses in its distribution agreements. For example, the distributors were prevented from applying labels to the front of the products and from using words such as “discount” or “reduced prices” on posters. In addition, distributors were only permitted to expand sales into other countries with the written consent of Caudalie. In principle, the agreements did allow Caudalie’s distributors to set the retail price of the products; Caudalie provided only a recommended resale price.

Recent months have witnessed a flurry of activity from the European Commission in the field of telecommunications regulation. On December 18, 2020, the Commission adopted a new Delegated Regulation setting single maximum Union-wide voice termination rates, as well as an updated Recommendation on those relevant markets within the electronic communications sector that it still deems to warrant regulation. On February 4, 2021, the Commission opened infringement procedures against 24 Member States for failing to implement the European Electronic Communications Code (EECC) into national legislation by the transposition deadline of December 21, 2020. And on February 24, it tabled a proposal for a new Roaming Regulation to replace the previous one of 2012 (Regulation No 531/2012). With these and other smaller initiatives, the Commission aims to complete a comprehensive overhaul of the European Union regulatory framework for the electronic communications sector, which it kickstarted in September 2016 with an ambitious legislative package intended to transform the EU into a “Gigabit Society” by 2025.

The European Commission is currently reviewing the Horizontal Block Exemption Regulations and the Horizontal Cooperation Guidelines. The revised regulations and guidelines will enter into force by the end of this year. The drafts reflect the Commission’s updated approach to horizontal cooperation issues such as joint purchasing, joint production, bidding consortia, information exchanges, etc. They also provide new guidance on agreements pursuing sustainability (ESG) goals. This webinar will focus on the key changes that inhouse counsel should be aware of.

The new Vertical Block Exemption Regulation (VBER) and accompanying Vertical Guidelines were finally adopted in May 2022 after four years of consultations and review. The new competition rules applicable to distribution and other vertical agreements take into account the specific challenges brought about by the growth of e-commerce and online platforms in the “digital age.”