Online sales reloaded – European Commission adopts new competition rules for supply and distribution agreements

Dr. Fabian Niemann and Lennart Schüßler

The European Commission has adopted a Block Exemption Regulation on Vertical Agreements and accompanying Guidelines for supply and distribution agreements on vertical restraints (also known as “vertical agreements”), which will come into force in June. Amongst other topics, the new rules specifically address online sales and will lead to major changes in this regard.

The Block Exemption Regulation and accompanying Guidelines will replace the current rules which were introduced 10 years ago and will apply with regard to vertical agreements relevant from a competition law perspective (i.e. agreements containing exclusivity clauses, non-competition clauses, restraints with regard to customer groups or territories or online sale conditions). Such agreements may, however, be block exempted from the cartel ban under German and EU-Law, provided that the respective companies meet certain requirements stipulated by the Regulation. However, if the requirements are not met, the agreement may be illegal.

In order to benefit from block exemptions the agreements may not contain price-fixing or other so called hardcore restrictions of competition and both manufacturer and distributor may not have more than a 30% market share. This last requirement – the so called double market share threshold – constitutes a major change in comparison to the current law, according to which only the market share of the manufacturer was relevant. As a result, vertical agreements with distributors that do not have limited m...

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