In recent years, the regulation of vertical agreements in the European Union has undergone significant changes. These agreements, which are made between businesses at different levels of the supply chain, have been the subject of numerous antitrust concerns and regulatory actions by the EU. In this article, we will take a closer look at the regulation of vertical agreements in the EU and the impact it has on businesses.

Vertical agreements are typically made between businesses at different levels of the supply chain, such as a manufacturer and a distributor. These agreements can cover a range of issues, including pricing, advertising, and distribution. The purpose of these agreements is to create efficiencies and benefits for both parties involved. However, they can also lead to anti-competitive behavior, which is why the EU has taken steps to regulate them.

Under EU competition law, vertical agreements are subject to a block exemption, which means that they are exempt from the general prohibition on anticompetitive agreements. To qualify for the exemption, the parties to the agreement must meet certain conditions, such as market share thresholds and restrictions on resale price. If the agreement does not meet these conditions, it may be considered anti-competitive and subject to regulatory action.

In addition to the block exemption, the EU has also introduced guidelines on vertical restraints, which provide more detail on how to assess the competition effects of these agreements. The guidelines cover a range of issues, including territorial restrictions, online sales restrictions, and exclusive dealing. They also provide guidance on how to assess the market power of the parties involved and the effects of the agreement on competition in the relevant market.

The regulation of vertical agreements in the EU has had a significant impact on businesses. On the one hand, it has created more certainty and clarity around what is and isn`t permissible in these types of agreements. This can help businesses to structure their relationships with suppliers and customers in a way that both meets their needs and is compliant with competition law.

On the other hand, the regulation of vertical agreements can also be a burden for businesses. Compliance with the requirements of the block exemption and the guidelines can be complex and time-consuming, which can create additional costs and administrative burdens. It can also limit the flexibility and autonomy of businesses to structure their relationships with other parties in the supply chain.

Overall, the regulation of vertical agreements in the EU is an important aspect of competition law. While it can create challenges for businesses, it is also an essential tool for ensuring that the market operates fairly and efficiently. As such, it is important for businesses to understand and comply with the requirements of the block exemption and the guidelines in order to avoid regulatory action and ensure their relationships with other parties in the supply chain are legally compliant.