The Vertical Agreement Block Exemption Regulation (VABER) is a critical component of EU competition law. It sets out guidelines for vertical agreements, which are agreements between firms at different levels of the supply chain. These agreements can include licensing agreements, distribution agreements, franchising agreements, and agency agreements.
The VABER provides legal certainty for companies regarding the compatibility of their vertical agreements with EU competition law. It exempts certain types of vertical agreements from the prohibition of anti-competitive agreements outlined in Article 101 of the Treaty on the Functioning of the European Union (TFEU). This means that businesses may enter into these vertical agreements without fear of violating EU competition law, so long as the conditions of the VABER are met.
Vertical agreements that are exempted under the VABER include:
– Non-exclusive distribution agreements
– Exclusive distribution agreements with a market share of less than 30%
– Supply agreements with a market share of less than 30%
– Franchise agreements that do not include market share restrictions or territorial restrictions that go beyond what is necessary to protect the franchisee`s legitimate interests
– Agency agreements where the agent does not bear any significant financial or commercial risks and the agreement does not contain any restrictions on the territory or customer group
There are certain conditions that must be met for a vertical agreement to benefit from the VABER. For example, the agreement cannot contain any hardcore restrictions, such as resale price maintenance, territorial restrictions, or customer group restrictions. Additionally, the agreement cannot have the effect of harming competition in the market. This means that the market share of the parties to the agreement cannot exceed certain thresholds and other competitive factors must also be taken into account.
The VABER is crucial for businesses that engage in vertical agreements, as it provides a clear and predictable framework for ensuring compliance with EU competition law. Moreover, it promotes efficient and effective competition in the EU market while also allowing for vertical agreements that can promote innovation, quality, and consumer welfare.
In conclusion, the Vertical Agreement Block Exemption Regulation (VABER) is a vital component of EU competition law that provides legal certainty for businesses when entering into vertical agreements. It ensures that these agreements are compatible with EU competition law, promoting efficient and effective competition in the EU market while allowing for the benefits of innovative vertical agreements. As a professional, it is essential to understand the VABER and its impact on businesses operating in the EU.