Block Exemption Regulation Vertical Agreements: What You Need to Know
In the world of business, vertical agreements are a common occurrence. These agreements are made between companies that operate at different levels of a supply chain, and they can take many forms. The European Union recognizes the importance of these agreements and has enacted a regulatory framework to ensure that they are in line with competition laws. This regulatory framework is known as the Block Exemption Regulation (BER) Vertical Agreements.
What is the Block Exemption Regulation Vertical Agreements?
The Block Exemption Regulation Vertical Agreements is a set of guidelines that dictate how vertical agreements should be made and enforced within the European Union. The regulations outline the legal requirements that must be met by companies when entering into vertical agreements.
The BER Vertical Agreements came into effect in 2010 and replaced the old set of regulations that were enacted in 1999. The aim of these regulations is to create a more competitive environment for businesses operating within the European Union by promoting fair competition and preventing anticompetitive practices.
What are vertical agreements?
Vertical agreements are agreements made between two or more companies that operate at different levels of a supply chain. For example, a vertical agreement could be made between a manufacturer and a retailer or between a wholesaler and a distributor.
These agreements can take many forms, including licensing agreements, distribution agreements, franchising agreements, and supply agreements.
The importance of Block Exemption Regulation Vertical Agreements
The BER Vertical Agreements are essential in ensuring that vertical agreements are in line with competition laws. These regulations prevent companies from engaging in anticompetitive practices such as price-fixing, market-sharing, and restricting competition.
In addition to promoting fair competition, the BER Vertical Agreements also provide legal certainty for businesses operating within the European Union. This reduces transaction costs and encourages companies to engage in cross-border trade, which in turn promotes economic growth and development.
Excluded Agreements
The BER Vertical Agreements do not apply to all vertical agreements. Some agreements are excluded from these regulations and are subject to other competition laws within the European Union. These excluded agreements include:
1. Agreements between competitors
2. Agreements that contain “hard-core” restrictions such as price-fixing or market-sharing
3. Agreements that lead to the foreclosure of the market
Conclusion
In conclusion, the Block Exemption Regulation Vertical Agreements are essential in ensuring fair competition and promoting economic growth within the European Union. These regulations provide legal certainty for businesses operating within the EU and reduce the transaction costs associated with cross-border trade. It is important for companies to adhere to these regulations to avoid legal issues and maintain a competitive edge in the market.
