Vertical Agreements Block Exemption Regulation 2010

`vertical restraint` means a restriction of competition in a vertical agreement which falls within the scope of Article 101(1) of the Treaty; Agreements which do not fulfil the criteria for block exemptions must be independently assessed by the parties on the basis of the general principles set out in Articles 101(1) and 101(3). The guidelines issued by the Commission can provide urgent support for this difficult and imprecise assessment and help in the very interpretation of block exemption regulations. 1. For the purpose of calculating the total annual turnover referred to in Article 2(2), the turnover of the party to the vertical agreement concerned in the preceding financial year and the turnover of undertakings related to all goods and services excluding taxes and other charges shall be added together. For that purpose, transactions between the party to the vertical agreement and its affiliated undertakings or between its affiliated undertakings shall not be taken into account. The new draft regulations on R&D and specialization in manufacturing agreements and specialization in manufacturing agreements are two categories of horizontal cooperation agreements (agreements between companies at the same level of activity). The two block exemption regulations applicable to these two categories expire on 31 December 2010. The Commission has published new draft regulations and draft guidelines for horizontal agreements and cooperation agreements which, once they are finally available, will replace the existing block exemption regulations and guidelines. In order to strengthen the supervision of parallel networks of vertical agreements with similar anti-competitive effects and covering more than 50% of a given market, the Commission may, by means of a Regulation, declare this Regulation inapplicable to vertical agreements which contain specific restrictions on the market in question, thereby restoring the full application of Article 101 of the Treaty to such agreements – group context Article 101, paragraph 1 of the Treaty on the Functioning of the European Union (formerly Article 81(1) of the EC Treaty) prohibits agreements and agreements which impede or have the effect of restricting competition in the EU.

Under Article 101(2), those agreements restricting competition are to be annuled. The Commission and EU national regulatory authorities have the power to impose significant fines on parties to agreements that infringe Article 101. Certain types of vertical agreements can improve the economic efficiency of a production or distribution chain by facilitating better coordination between the undertakings concerned. In particular, they can lead to a reduction in the transaction and distribution costs of the parties and to an optimization of their level of turnover and investment.. . . .

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