The European Commission has adopted the new Vertical Block Exemption Regulation (‘VBER') together with new Vertical Guidelines, which provide a clearer and simpler update to the 2010 rules which will continue to help economic operators assess whether their supply and distribution agreements are compatible with EU competition law.

The revised VBER and Guidelines, which will enter into force on 1 June 2022, were considered a necessary update, including in view of the growth of e-commerce and online sales over the past decade and in preparation “for an even more digitalized decade ahead” (Executive Vice-President Margrethe Vestager).

The VBER and the Vertical Guidelines are the most relevant guidance for agreements between companies active at different levels of the production and distribution chain (so-called vertical agreements, such as a franchise agreement), establishing a framework for self-assessment by business of the competition law risks of their commercial contracts.

They relate to the exemption from the prohibition set out in Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU') which prohibits cartels and other anti-competitive agreements.

The updated VBER and accompanying Guidelines provides long-awaited answers to a number of concerns e.g. in relation to online advertising, exclusive distribution, dual distribution and information exchange. The Guidelines have also been clarified and simplified to make them more accessible for day-to-day use, including through updates with respect to assessment of online restrictions, agreements in the platform economy and agreements that pursue sustainability objectives.

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