Examples Of Vertical Agreements

Horizontal agreements, by their nature, fall more within the scope of the prohibitions of Chapter I or Article 101 than vertical agreements. These are essentially agreements between competitors and, as such, care must be taken to ensure that such agreements do not have anti-competitive effects. In some cases, they may be considered cartels, which may give rise to criminal sanctions. In order to help companies and their consultants ensure that their agreements fulfil the exemption conditions laid down in Article 101(3), the European Commission`s Directorate-General for Competition (`the Commission`) has published two documents of particular importance for the assessment of vertical restraints: for example, a consumer electronics manufacturer could conclude a vertical agreement with a retailer. By virtue of which the latter would sell and advertise the products of the former. perhaps in exchange for lower prices. Such agreements could lead to the partitioning of markets and/or the creation and maintenance of territorial restrictions. Similar vertical restraints may be covered by the prohibition referred to in Article 4, unless they fall under a block exemption or an individual exemption. Article 101(1) of the Treaty on the Functioning of the European Union prohibits agreements between undertakings which have the aim or effect of restricting, preventing or distorting competition within the EU and which concern trade between EU Member States[3]. This prohibition applies to all agreements concluded between two or more undertakings, whether they are competitors. However, the Commission is very selective in choosing the regimes on which it will provide informal guidance and, given the existence of the vertical block exemption and the vertical guidelines, it is unlikely that the Commission would issue individual guidelines on vertical restraints. In general, the Commission considers that the parties are well placed to analyse the effects of their own conduct.

The authors are not aware of any case in which the Commission has proposed informal guidance to the parties. The vertical guidelines also deal with a supplier-specific restriction, called `exclusive supply`, which covers the situation in which a supplier agrees to deliver to only one buyer throughout the EU. The main anti-competitive effect of these agreements is the potential exclusion of competing buyers and non-competing suppliers. Therefore, the Vertical Guidelines specify that the buyer`s market share is the most important in the assessment of these restrictions. In particular, negative effects may occur when the buyer`s market share in the downstream supply market and in the upstream purchasing market is greater than 30%. However, if the market shares of customers and suppliers are less than 30% and the exclusive supply agreements are less than five years, these restrictions benefit from the safe haven created by the vertical block exemption. What are the investigative powers of the competent authority for the enforcement of anti-cartel rules with regard to the application of the prohibition of vertical restraints? During the seventeen years from 1 January 2001 to 1 January 2018, the Commission imposed fines on the following companies in cases of vertical restraints (some of which were reduced or abolished in the context of the appeal): Peugeot – EUR 49.5 million; Topps – €1.59 million; Yamaha – €2.56 million; Nintendo – €149 million; DaimlerChrysler – €71.8 million; Volkswagen – 30.96 million euros. . . . .