Competition & Anti-trust Law 2016
EXPERT GUIDE
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18 October 2016 October 2016 19
Expert guide: Competition & Anti-trust Law 2016
The ageing VBER – the deceiving simplicity
of a schema
The EU Block Exemption Regulation 330/2010
on Vertical Agreements (“VBER”) is still valid
until 31 May 2022. However, when applying the
VBER to vertical agreements in practice, experience
shows that the VBER, in (seemingly)
more and more cases, proves to be too schematic
and therefore probably too old to cope
with the challenges nowadays to be faced under
EU and national Competition Law.
It shall not be forgotten that the current VBER
is already based on the experiences made with
its predecessor, the EC Block Exemption Regulation
2790/1999 on Vertical agreements.
The luring promise of the VBER remains unchanged:
Every vertical agreement falling within
its scope (including the satisfaction of the
relevant market share thresholds for the parties
to the vertical agreement) not containing the
hardcore restrictions defined in Art. 4 VBER
and the restrictions contained in Art. 5 VBER
(i.e. essentially excessive non-compete obligations)
shall be exempted from the cartel prohibition
of Art. 101 para. 1 TFEU in its entirety.
tuitive conclusion should be: A per se prohibition
for the buyer to sell the products via third
party platforms (i.e. in the internet) is a restriction
of passive sales, which is always prohibited
under the VBER. However, when studying
para. 54, sentence 6 of the Guidelines on Vertical
Restraints (“Vertical Guidelines”) in more
detail, it seems that a supplier may prohibit the
buyer from using third party platforms – even
per se – for reasons of quality. This view would
then be the final result of the application of the
VBER (and the Vertical Guidelines) to such restrictions,
exempting them from the cartel prohibition.
However, the German Federal Cartel Office
(“FCO”) currently interprets the VBER and the
The conditions for such an exemption from Art.
101 para. 1 TFEU as laid down in the VBER
are very schematic. It goes without saying that
some of those conditions are – depending on
the vertical agreement in question – difficult to
assess in practice (e.g. the question of whether
provisions concerning intellectual property
rights contain restrictions of competition having
the same object as hardcore restriction laid
down in Art. 4 VBER). Nonetheless, once this
schematic test of the VBER has been satisfied,
the parties of the vertical agreement reach the
safe harbour of a complete exemption from the
cartel prohibition. This might, however, not be
true in all cases. This paper will briefly cover
two examples where the VBER proves to be too
schematic, which – of course – entails significant
risks for the parties concerned.
LOOKING BEYOND THE WORDING OF
THE VBER
A current example of the VBER proving to be
too schematic is the use of clauses prohibiting
the buyer from selling the contract goods or
services via eBay, Amazon or comparable third
party platforms. When applying Art. 4 (b) (i)
VBER (or Art. 4 (c) VBER in case of a selective
distribution system) to such restrictions, the in-
Vertical Guidelines differently, stating that its
schematic application would be wrong in case
of a per se prohibition of the use of third party
platforms. The main reason for the FCO’s more
restrictive view in this regard is that it aims at
protecting buyers who want to use the wellknown
third party platforms to reach more
customers for the sale of the contract products.
Arguably, this aim pursued by the FCO
goes back to the fundamental idea of Art. 4 (b)
VBER, protecting the buyer’s right to sell the
contract products wherever (territory) and to
whomever (customer) he likes. However, when
taking the Vertical Guidelines, para. 54 into account,
the FCO’s view seems to clearly fall outside
of the scope of the VBER.
Dr. Nils Gildhoff
n.gildhoff@mhl.de
www.mhl.de
The Ageing Vber – The Deceiving Simplicity Of A Schema
By Dr. Nils Gildhoff
Germany
20 October 2016 October 2016 21
Expert guide: Competition & Anti-trust Law 2016
The European Commission’s ongoing sector
inquiry in the eCommerce sector might shed
more light on this question and the need for a
different application of the VBER with regard
to such per se prohibitions regarding the use of
third party platforms.
A second example of the VBER proving to be
too schematic is its relation to horizontal aspects
of vertical agreements. Art. 2 para. 4
VBER starts with the simple decision that the
VBER does not apply to (vertical) agreements
entered between competing undertakings and
then continues by defining two exceptions from
this rule. For example, the VBER still applies to
situations of dual distribution, i.e. non-reciprocal
vertical agreements, where the supplier is a
manufacturer and a distributor of goods, while
the buyer is a distributor and not a competing
manufacturer. Provided such a vertical agreement
satisfies all conditions laid down in the
VBER, the simple consequence must be that the
exemption from Art. 101 para. 1 TFEU applies
to the vertical agreement in question as a whole.
The Vertical Guidelines support this view by
stating that “any potential impact on the competitive
relationship between the manufacturer
active and passive sales by the supplier in a potential
dual distribution scenario, which seems
to be covered by the VBER, even though this
could arguably amount to a horizontal market
partitioning by territory or customer group under
Art. 101 para. 1 TFEU.
Conclusion
The straight-forward concept of the VBER of
exempting all vertical agreements from the cartel
prohibition generally has to be recognised
as a big achievement, providing a significant
amount of legal certainty in the day-to-day assessment
of vertical agreements. However, even
if all conditions laid down in the VBER are satisfied
and the concrete vertical agreement in
question does not contain any hardcore restrictions,
it might still be necessary to assess the
agreement from a more general competition
law perspective. Such an additional assessment
is not limited to the examples cited above (i.e. a
per se prohibition of sales via third party platforms,
information-exchange mechanisms or
protection from active and passive sales by the
supplier in dual distribution scenarios). Looking
into the future, it would certainly further
and retailer at the retail level is of lesser importance
than the potential impact of the vertical
supply agreement on competition in general at
the manufacturing or retail level” (see Vertical
Guidelines, para. 28 – emphasis added). This
cannot be correct, as the horizontal dimension
of such vertical agreements would then be ignored.
Vertical agreements might, for example,
include an information-exchange mechanism
amounting to an infringement of Art. 101 para.
1 TFEU. Therefore, if the vertical agreement
that is to be assessed contains a (more or less)
hidden horizontal cartel, the safe harbour of
the VBER has to be left for a more profound
analysis of such restrictions of competition. The
more recent Guidelines on the applicability of
Article 101 of the Treaty on the Functioning of
the European Union to horizontal co-operation
agreements might then be of more help, even
though the Vertical Guidelines do only refer to
the former in case of vertical agreements concluded
between competitors clearly falling outside
of the VBER’s scope (see Vertical Guidelines,
para. 27).
Further examples could be provided in this connection,
e.g. the protection of the buyer from
strengthen the reliability of the VBER’s safe
harbour promise, if such cases of uncertainty
are explicitly covered (or covered in more detail)
in the successor regime entering into force
after the expiry of the current VBER on 31 May
2022.
Dr. Nils Gildhoff has more than 10 years of experience
in the fields of German and EU competition/
antitrust law. He advises undertakings and
private individuals in the above mentioned fields
on a regular basis. His work includes the competition
law aspects of M&A transactions (notably
merger control law and compliance), cartel proceedings,
distribution agreements, cooperation of
competitors and competition law compliance. He
has experience in several industry sectors, notably
consumer products, oil, pharmaceuticals,
engineering and construction. Nils Gildhoff is
qualified as an Attorney-at-Law. From 2005 until
2011 he was a member of the competition law
team of Allen & Overy. In 2011 he joined Corinius
(since 2012 as a salary partner). In 2014 he
joined Mצhrle Happ Luther as a partner. He is
fluent in English, French and German.
Germany
The straight-forward concept of the VBER of exempting
all vertical agreements from the cartel prohibition
generally has to be recognised as a big achievement,
providing a significant amount of legal certainty in the
day-to-day assessment of vertical agreements.