The European Commission recently published its findings following a consultation on the Vertical Category Exemption Regulation (VBER) and accompanying vertical guidelines. In the consultation, several aspects of the vertical agreement rules are cited as greater clarity and/or more specific guidelines, with many areas of potential revisions being motivated by examples resulting from the increase in e-commerce. First, we take into account the main messages of the discussion paper. Secondly, we will describe five economic principles which we believe should guide the Commission`s revision of the VBER and its vertical guidelines. We then illustrate the application of these economic principles by taking a closer look at the economic analysis of two specific types of vertical agreements, the maintenance of resale prices and the clauses of the most favoured nation. The Commission`s services working paper is an important step in the EC`s review of the VBER and guidelines; it completes the evaluation phase and initiates the impact analysis phase during which the EC will take a closer look at the issues identified. A draft revised rules are expected to be published in public consultation in 2021 and the new rules will come into force on 31 May 2022 until the expiry of the existing ERV and existing guidelines. For competition reasons, vertical agreements are agreements between parties operating at different levels of the economic supply chain. It is generally accepted that vertical restrictions tend to be less anti-competitive than horizontal restrictions (agreements between competitors operating at the same level).
Data sharing is a good example. Data has become an increasingly important contribution to the market and many companies need quick access to this data. However, the vertical guidelines do not provide guidelines for the flow of information between different levels of the distribution chain. For example, commodity producers typically need to record their distributors` sales forecasts in order to optimize their production planning. These manufacturers may also be required to inform their distributors on a regular basis in advance of the planned maintenance of the facilities in order to enable distributors and their customers to find, if necessary, alternative sources of supply in the gas sector. However, the same manufacturers sometimes sell their products directly to customers, in competition with their distributors (“double distribution”). The exchange of information is also important for the collection of information from downstream parties, including retailers.B. The need for guidance therefore seems clear. It will be important for the Commission, in the development of these new sections, to ensure that its position is consistent with all the changes it intends to make to its guidelines on horizontal cooperation agreements and related category exemptions for which it is conducting a similar assessment. The report on support studies published by the Commission on 26 May 2020 confirms the results of the public consultation, as the current rules do not address sufficient issues related to online sales and online platforms. The more than 700-page report also provides an overview of the likely direction of the VBER review and the Commission`s vertical directions. The final report concludes that without the existence of the VBER and the guidelines, the legal costs for businesses would be much higher and the legal certainty associated with the assessment of vertical agreements would be reduced.
However, some stakeholders pointed out that the current VBER increases compliance costs for some businesses because they do not sufficiently reflect the growth of digital commerce over the past decade. Selective distribution agreements are popular in a wide range of sectors, including cosmetics, sporting goods and household appliances.