COMMISSION STAFF WORKING DOCUMENT EVALUATION of the Vertical Block Exemption Regulation
Date: 2020-09-08
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, application of EU law, electronic commerce, inter-company agreement, restriction on competition, vertical agreement

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.9.2020  SWD(2020) 172 final  COMMISSION STAFF WORKING DOCUMENT  EVALUATION  of the     Vertical Block Exemption Regulation {SWD(2020) 173 final}  
 
 
TABLE OF CONTENTS 

1. 

INTRODUCTION ................................................................................................................................ 4 

1.1. 

1.2. 

Purpose of the VBER evaluation ................................................................................................... 5 

Scope of the VBER evaluation ...................................................................................................... 5 

2. 

BACKGROUND TO THE INTERVENTION ..................................................................................... 7 

2.1. 

Overview of the competition policy framework............................................................................ 7 

2.1.1. 

2.1.2. 

The 1999 block exemption regulations ............................................................................... 10 

The review of the 1999 VBER ........................................................................................... 12 

2.2. 

2.3. 

2.4. 

Description of the intervention .................................................................................................... 13 

Intervention logic ........................................................................................................................ 15 

Evaluation baseline ..................................................................................................................... 20 

3. 

EVALUATION QUESTIONS ............................................................................................................ 20 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

Effectiveness ............................................................................................................................... 20 

Efficiency .................................................................................................................................... 21 

Relevance .................................................................................................................................... 21 

Coherence .................................................................................................................................... 21 

EU added value ........................................................................................................................... 21 

4.  METHODOLOGY .............................................................................................................................. 22 

4.1. 

Description and use of the sources .............................................................................................. 22 

4.1.1. 

4.1.2. 

4.1.3. 

4.1.4. 

4.1.5. 

4.1.6. 

Public consultation ............................................................................................................. 22 

Targeted consultation of national competition authorities .................................................. 23 

Stakeholder workshop ........................................................................................................ 23 

External evaluation support study ...................................................................................... 23 

Spontaneous stakeholder submissions ................................................................................ 24 

Evidence gathered through other Commission initiatives .................................................. 24 

4.2. 

4.3. 

Processing and triangulating of the evidence collected ............................................................... 25 

Limitations of the analysis .......................................................................................................... 27 

4.3.1. 

4.3.2. 

4.3.3. 

Evidence on VBER related costs and benefits .................................................................... 27 

Representativeness of stakeholder feedback ....................................................................... 28 

Limited evidence about consumer views ............................................................................ 29 

5.  ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS .......................................... 29 

5.1.  Market developments since the adoption of the VBER............................................................... 30 

5.1.1. 

5.1.2. 

5.1.3. 

5.1.4. 

The main findings of the e-commerce sector inquiry ......................................................... 31 

The main findings of the evaluation study ......................................................................... 33 

The Commission’s enforcement action regarding vertical restrictions ............................... 43 

NCA enforcement and policy actions regarding vertical restrictions ................................. 47 

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5.2. 
Answers to the evaluation questions regarding the VBER, together with the Vertical Guidelines, 
as a whole ................................................................................................................................................. 49 

5.2.1. 

5.2.2. 

5.2.3. 

5.2.4. 

5.2.5. 

Effectiveness ...................................................................................................................... 50 

Efficiency ........................................................................................................................... 62 

Relevance ........................................................................................................................... 67 

Coherence ........................................................................................................................... 71 

EU added value................................................................................................................... 74 

5.3. 
Overview of the areas in which the VBER, together with the Vertical Guidelines, is perceived as 
not functioning well or not functioning as well as it could ...................................................................... 75 

6. 

CONCLUSIONS ................................................................................................................................. 88 

ANNEX 1: PROCEDURAL INFORMATION ............................................................................................ 94 

ANNEX 2: STAKEHOLDER CONSULTATION ....................................................................................... 99 

ANNEX 3: METHODS AND ANALYTICAL MODELS ........................................................................ 143 

ANNEX 4: OVERVIEW OF ISSUES IDENTIFIED DURING THE EVALUATION PROCESS........... 144 

2 

 
Glossary 

Term or acronym 

Meaning or definition 

Commission 

European Commission 

DG Competition 

Directorate-General for Competition of the European Commission  

CJEU 

European Court of Justice 

EEA Agreement 

Agreement on the European Economic Area 

EFTA 

EU 

EUR 

HGL 

IA 

IPR 

ISSG 

European Free Trade Association 

European Union  

Euro 

Horizontal Guidelines  

Impact assessment 

Intellectual property rights 

Inter-service steering group 

MVBER 

Motor vehicle block exemption regulation 

MFNs 

NCAs 

OEMs 

OTAs 

RPM 

SMEs 

TSCs 

TTBER 

VBER 

VGL 

RSB 

Most Favoured Nation clauses 

National competition authorities 

Original equipment manufacturers  

Online travel agencies 

Resale price maintenance 

Small and medium-sized enterprises  

Territorial supply constraints 

Block exemption regulation on technology transfer agreements 

Vertical block exemption regulation  

Guidelines on Vertical Restraints / Vertical Guidelines 

Regulatory Scrutiny Board 

3 

 
 
 
1.  INTRODUCTION 

Article  101(1)  of  the  Treaty  on  the  Functioning  of  the  European  Union  ("the  Treaty") 
prohibits  agreements  between  undertakings  that  restrict  competition,  unless  they 
contribute to improving the production or distribution of goods or to promoting technical 
or economic progress, while allowing consumers a fair share of the resulting benefits, in 
accordance with Article 101(3) of the Treaty.  

Agreements which are entered into by two or more undertakings, each operating, for the 
purposes of the agreement, at a different level of the production or distribution chain, and 
which relate to the conditions under which the parties may purchase, sell or resell certain 
goods or services ("vertical agreements") are, among others, susceptible to fall within the 
scope  of  the  prohibition  of  Article  101(1)  of  the  Treaty.  Vertical  agreements  are 
ubiquitous across the EU economy.  

Under Regulation 19/65/EEC1 ("Empowerment Regulation of 1965"), the Commission is 
empowered  by  the  Council  to  adopt  block  exemption  regulations,  which  define  certain 
categories of agreements that generally fulfil the conditions of exemption under Article 
101(3)  of  the  Treaty.  On  this  basis,  the  Commission  has  adopted  several  block 
exemptions, some of which concern vertical agreements. 

As is the case for other block exemption regulations in the antitrust area, the purpose of 
Commission  Regulation  (EU)  No  330/2010  of  20  April  2010  on  the  application  of 
Article 101(3) of the Treaty to categories of vertical agreements and concerted practices 
("Vertical  Block  Exemption  Regulation"  or  "VBER")2 is  to  define  those  categories  of 
agreements  for  which  it  can  be  assumed  with  sufficient  certainty  that  they  fulfil  the 
conditions  of  Article  101(3)  of  the  Treaty  and  exempt  them  from  the  prohibition 
contained in Article 101(1) of the Treaty. The VBER entered into force on 1 June 2010 
and will expire on 31 May 2022.  

The  Guidelines  on  Vertical  Restraints  ("Vertical  Guidelines")3 provide  guidance  on  the 
assessment of vertical agreements not only under the VBER but also under Article 101(1) 
and  Article  101(3)  of  the  Treaty.  Vertical  agreements  which  do  not  qualify  for  an 
exemption  under  the  VBER  may  nonetheless  satisfy  the  conditions  of  the  exemption 
provided by Article 101(3) of the Treaty. The Vertical Guidelines are without prejudice 

1   Regulation No 19/65/EEC of 2 March of the  Council on application of Article 85(3) of the Treaty to 
certain  categories  of  agreements  and  concerted  practices,  OJ  36,  6.3.1965,  p.  35,  as  amended  by 
Council Regulation (EC) No 1215/1999 of 10 June 1999, OJ L 148, 15.6.1999, p. 1.  

2   Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the 
Treaty  on  the  Functioning  of  the  European  Union  to  categories  of  vertical  agreements  and  concerted 
practices, OJ L 102, 23.4.2010, p. 1. 

3   Guidelines on Vertical Restraints, OJ C 130, 19.5.2010, p. 1. 

4 

 
 
                                                           
to  the  case  law  of  the  Union  courts  concerning  the  application  of  Article  101  of  the 
Treaty to vertical agreements.4  

This Staff Working Document reflects the findings and views of the Commission’s staff 
and does not reproduce the formal position of the Commission itself. It does not prejudge 
the  final  nature  or  content  of  any  act  that  may  be  prepared  by  the  Commission  as  a 
follow-up to this evaluation. 

The  following  sections  set  out  the  purpose  of  the  VBER  evaluation  (see  section  1.1 
below),  as  well  as  the  substantive  and  geographic  scope  of  the  VBER  evaluation  (see 
section 1.2 below). 

1.1. Purpose of the VBER evaluation 

The  purpose  of  the  evaluation  is  to  gather  evidence  on  the  functioning  of  the  VBER, 
together with the Vertical Guidelines, which will serve as a basis for the Commission to 
decide whether it should let the VBER lapse, renew or revise it. 

As required by the Commission’s Better Regulation Guidelines,5 the evaluation examines 
whether  the  objectives  of  the  VBER  were  met  during  the  period  of  its  application 
(effectiveness) and continue to be appropriate (relevance) and whether the VBER, taking 
account of the costs and benefits associated with applying it, was efficient in achieving 
its objectives (efficiency). It also considers whether the VBER, as legislation at EU level, 
provided  added  value  (EU  added  value)  and  is  consistent  with  other  Commission 
documents providing guidance on the application of Article 101 of the Treaty and related 
legislation with relevance for vertical agreements (coherence). 

The impact of the COVID-19 outbreak is not dealt with in this Staff Working Document, 
given that these developments are very recent and the evidence gathered in the evaluation 
could not take them into account. Moreover, the duration and impact of the COVID-19 
crisis cannot be predicted or accurately quantified at the current stage, and it is therefore 
not  possible  to  evaluate  the  effects  of  the  COVID-19  crisis  on  the  rules  subject  to  the 
evaluation.  Nevertheless, the Commission is  conscious  that  there has been a significant 
increase in e-commerce in the wake of the confinement measures. 

1.2. Scope of the VBER evaluation 

The  substantive  scope  of  the  evaluation  includes  the  VBER,  together  with  the  Vertical 
Guidelines, in their entirety. Insofar as the Vertical Guidelines refer to the provisions of 
the VBER  and inform their application and interpretation, the assessment of the VBER 
would not be complete if it did not include them. As explained in more detail in section 
2.2 below, the VBER and the Vertical Guidelines adopted in 2010 are to a large extent a 
continuation of the approach taken in the previous versions of these two documents from 

4   Vertical Guidelines, paragraph 4. 
5   Commission  staff  working  document,  Better  Regulation  Guidelines,  Brussels,  7  July  2017,  SWD 

(2017) 350.  

5 

 
                                                           
1999, with limited adaptations to address specific issues identified during the last review 
process.  

Since  the  adoption  of  the  current  VBER  and  Vertical  Guidelines,  there  have  been  a 
number of market developments, notably the growth of online sales and of new market 
players such as online platforms.6 As these developments may affect parts of the VBER 
and  Vertical  Guidelines  that  go  beyond  the  specific  provisions  changed  in  2010,  it  is 
appropriate to evaluate the VBER, together with the Vertical Guidelines, in their entirety, 
rather than focusing on the main changes that were made as a result of the last review. 

The  Motor  Vehicle  Block  Exemption  Regulation  ("MVBER")  was  adopted  in  2010.7 It 
contains  a  transition  clause, 8 which  prolonged  the  application  of  the  previous  block 
exemption regulation for the motor vehicles sector9 to the purchase, sale or resale of new 
motor vehicles until 1 June 2013. Since then, the distribution of new motor vehicles has 
been benefitting from the exemption provided by the VBER, when the conditions set out 
therein  are  fulfilled.  As  regards  aftermarkets,  the  MVBER  has  been  dealing  with  the 
conditions for the purchase, sale or resale of spare parts and the provision of repair and 
maintenance  services  for  motor  vehicles  since  its  adoption  in  2010.10 The  MVBER  is 
subject  to  a  separate  review  launched  in  2018.  The  outcome  of  the  evaluation  of  the 
MVBER will be taken into account in the context of the impact assessment of the VBER.  

The  geographic  scope  of  the  evaluation  extends  to  all  EU  Member  States. 11 Article 
101(1)  of  the  Treaty  has  direct  applicability  in  all  EU  Member  States  by  virtue  of  the 
case law of the Union courts.  

Council  Regulation  1/200312 created  a  system  of  parallel  competences  also  for  Article 
101(3) of the Treaty, by introducing a directly applicable exemption system in which the 
competition authorities and the courts of the Member States have the power to apply not 
only Article 101(1) of the Treaty, but also Article 101(3) of the Treaty.13 When assessing 

6   The notion of online platforms is used in this document in a non-technical sense, in line with the way 
stakeholders used it in their contributions. It therefore refers more broadly to businesses active in the e-
commerce sector including marketplaces, online retailers and price comparators. The use of this notion 
is without prejudice to the definition of online platforms used in existing regulation. 

7   Commission Regulation (EU) No 461/2010 of 27 May 2010 on the application of Article 101(3) of the 
Treaty  on  the  Functioning  of  the  European  Union  to  categories  of  vertical  agreements  and  concerted 
practices in the motor vehicle sector, OJ L 129, 28.5.2010, p. 52. 

8   MVBER, Article 2. 
9   Commission Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the 
Treaty  to  categories  of  vertical  agreements  and  concerted  practices  in  the  motor  vehicle  sector,  OJ  L 
203, 1.8.2002, p. 30. 
10   MVBER, Article 4. 
11   Since the VBER has been fully applicable in the United Kingdom during the period under review, the 
evaluation  includes  evidence  gathered  from  stakeholders  in  the  UK,  in  particular  from  the  UK’s 
Competition and Markets Authority. 

12   Council  Regulation  (EC)  No  1/2003  of  16  December  2002  on  the  implementation  of  the  rules  on 
competition  laid  down  in  Articles  81  and  82  of  the  Treaty  ("Council  Regulation  1/2003"),  OJ  L  1, 
4.1.2003, p. 1. 

13   Council Regulation 1/2003, recital 4.  

6 

 
                                                           
the compatibility of vertical agreements that may affect trade between Member States in 
the meaning of Article 101 of the Treaty, national competition authorities ("NCAs") and 
national  courts  are  bound  by  the  directly  applicable  provisions  of  the  VBER.  The 
Vertical  Guidelines,  which  are  binding  on  the  Commission, 14 do  not  bind  NCAs  or 
national courts, but they are typically taken into account when assessing the compatibility 
of vertical agreements with Article 101 of the Treaty.  

Against  this  background,  the  evaluation  of  the  VBER  does  not  only  include  the 
decisional practice of the Commission but also that of the NCAs, as well as the relevant 
jurisprudence of national courts. 

The three EFTA States (Iceland, Liechtenstein and Norway) are not part of the evaluation 
since the VBER is not directly applicable in these countries. Secondary EU law (such as 
Commission  regulations)  first  has  to  be  included  in  the  Agreement  on  the  European 
Economic Area ("EEA Agreement")15 on the basis of Article 60 of the EEA Agreement 
and  must  then  be  incorporated  into  the  national  legal  orders  of  the  EFTA  States  to 
become applicable. Subject to this process, the VBER is applicable in the EFTA States. 
In  view  of  the  Commission’s  obligation  to  informally  seek  advice  from  experts  of  the 
EFTA  States  for  the  elaboration  of  new  legislative  proposals, 16 the  Commission  has 
informed the EFTA States of the evaluation of the VBER in order to provide them with 
an early opportunity to share their experience in this regard. 

2.  BACKGROUND TO THE INTERVENTION 

The following sections provide an overview of the EU competition policy framework for 
vertical  agreements  (see  section  2.1  below),  a  description  of  the  2010  VBER  and  the 
Vertical  Guidelines,  which  constitute  the  intervention  subject  to  this  evaluation  (see 
section 2.2 below), a presentation of the intervention logic (see section 2.3 below) and a 
presentation  of the evaluation baseline for the 2010 VBER and the Vertical  Guidelines 
(see section 2.4 below).  

2.1. Overview of the competition policy framework 

The purpose of the EU competition rules enshrined in the Treaty (notably Article 101 and 
102 of the Treaty) and related secondary EU law (such as Commission regulations) and 
soft  law  (such  as  Commission  notices  and  guidelines,  which  are  binding  on  the 
Commission  but  not  on NCAs or national  courts) is  to  prevent  competition  from  being 
distorted  to  the  detriment,  directly  or  indirectly,  of  consumers,  thereby  contributing  to 

14   See e.g. judgment of 28 June 2005 in Case C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-
213/02  P,  ECLI:EU:C:2005:408,  Dansk  Rørindustri  A/S,  paragraph  211;  judgment  of  13  December 
2012 in Case C-226/11, ECLI:EU:C:2012:795, Expedia Inc. v Autorité de la concurrence and Others, 
paragraph 28.  

15   Agreement on the European Economic Area, OJ L 1, 3.1.1994, p. 1, Annex XIV, section B. 
16   Article 99(1) EEA Agreement. 

7 

 
                                                           
achieving an integrated internal market.17 More specifically regarding vertical supply and 
distribution  agreements,  the  Commission's  policy  aims  to  ensure  undistorted  and 
effective  competition  in  the  European  supply  and  distribution  chain  so  that  consumers 
can benefit from lower prices, increased quality and variety of products and services, as 
well  as  the  results  of  increased  incentives  to  innovate  as  delivered  by  competitive 
markets. 

Article  101(1)  of  the  Treaty  prohibits  agreements  (including  vertical  agreements) 
between undertakings, decisions by associations of undertakings and concerted practices, 
which may affect trade between Member States and which have as their object or effect 
the prevention, restriction or distortion of competition.18 

As  an  exception  to  this  rule,  Article  101(3)  of  the  Treaty  sets  out  that  the  prohibition 
contained in Article 101(1) of the Treaty may be declared inapplicable to agreements that 
are  on  balance  efficiency-enhancing,  provided  that  such  agreements  fulfil  four 
cumulative  conditions.  They  have  to  (i)  contribute  to  improving  the  production  or 
distribution of goods or to promoting technical or economic progress, (ii) while allowing 
consumers a fair share of the resulting benefits.  Moreover, they (iii) should not impose 
restrictions that are not indispensable to the attainment of the aforementioned objectives, 
and (iv) should not afford the undertakings the possibility of eliminating competition in 
respect of a substantial part of the products concerned.19 

In  light  of  the  above,  the  assessment  of  agreements  under  Article  101  of  the  Treaty 
consists of two parts. The  first  step is  to  assess (in  the context  of Article 101(1) of the 
Treaty) whether an agreement between undertakings, which is capable of affecting trade 
between  Member  States,  restricts  competition.  This  is  the  case  if  it  reveals  a  sufficient 
degree of harm to competition so that there is no need to examine its actual or potential 
effects  ("restriction  by  object")20 or  if  it  results  in  actual  or  potential  anti-competitive 
effects ("restriction by effect"). The second step, which only becomes relevant when an 
agreement is found to restrict competition pursuant to Article 101(1) of the Treaty, is to 
determine  (in  the  context  of  Article  101(3)  of  the  Treaty)  the  pro-competitive  benefits 
produced by the agreement and to assess whether these pro-competitive effects outweigh 
the anti-competitive effects resulting from the agreement.21  

17   See e.g. judgment of 18 April 1975 in Case 6/72, ECLI:EU:C:1973:22,  Europemballage Corporation 
and  Continental  Can  Company  v  Commission,  paragraphs  25-26;  judgement  of  17  February  2011  in 
Case C-52/09, ECLI:EU:C:2011:83, TeliaSonera Sverige, paragraph 22; judgment of 27 March 2012 in 
Case  C-209/10, ECLI:EU:C:2012:172,  Post Danmark A/S v Konkurrencerådet, paragraphs 20-24 and 
judgment  of  6  September  2017  in  Case  C-413/14  P,  ECLI:EU:C:2017:632,  Intel  Corp.  Inc.  v 
Commission, paragraph 133.  

18   Communication  from  the  Commission,  Notice  -  Guidelines  on  the  application  of  Article  81(3)  of  the 

Treaty ("Article 81(3) Guidelines"), OJ C 101, 27.4.2004, p. 97, paragraph 8.  

19   Article 81(3) Guidelines, paragraph 9. 
20   See  e.g.  Commission  guidance  on  restrictions  of  competition  "by  object"  for  the  purpose  of  defining 
which  agreements  may  benefit  from  the  De  Minimis  Notice  ("Guidance  on  by  object  restrictions"), 
SWD(2014) 198 final, page 3.   

21   Article 81(3) Guidelines, paragraph 11. 

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In  view  of  the  initially  large  number  of  notifications  in  relation  to  vertical  agreements 
submitted  by  businesses  under  the  first  regulation  implementing  the  EU  competition 
rules,  the  Council  adopted  the  Empowerment  Regulation  of  1965  to  facilitate  the 
enforcement work of the Commission by empowering it to declare by way of regulation 
that  Article  101(1)  of  the  Treaty  does  not  apply  to  certain  categories  of  vertical 
agreements and practices.22 This meant that the Commission no longer had to carry out 
an  individual  assessment  of  compliance  with  Article  101  of  the  Treaty  for  vertical 
agreements  covered  by  a  block  exemption  regulation  adopted  on  the  basis  of  the 
Empowerment  Regulation  of  1965,  as  agreements  that  fall  within  the  scope  of  such  a 
block  exemption  regulation  benefit  from  a  presumption  of  legality  (so-called  "safe 
harbour").23 However,  businesses  still  had  to  self-assess  whether  their  agreements  fell 
within the scope of the block exemption regulation. 

The Commission has made repeated use of this empowerment by adopting various block 
exemption  regulations  for  vertical  agreements.  More  specifically,  in  line  with  the 
Empowerment Regulation of 1965, these block exemption regulations defined categories 
of vertical agreements that the Commission regarded at the time of adoption as normally 
satisfying the conditions laid down in Article 101(3) of the Treaty and that therefore did 
not  require  an  individual  assessment  by  the  Commission  under  Article  101(3)  of  the 
Treaty.24 The scope of the different block exemption regulations was determined on the 
basis  of  the  Commission’s  enforcement  experience  and,  where  applicable,  the  overall 
experience with the application of previous block exemption regulations.25  

One  of  the  elements  determining  the  scope  of  the  VBER  are  market  shares  thresholds. 
They limit the applicability of the safe harbour to vertical agreements between businesses 
holding a share in the relevant market(s) that does not exceed the thresholds set out in the 
VBER.  The  definition  of  the  relevant  market  to  be  carried  out  for  that  purpose  is  not 
specific to the VBER, but follows the principles established in the case law of the Union 
courts and reflected in the Commission’s Market Definition Notice.26 

The following sections briefly summarise the main features of the 1999 block exemption 
regulations  (see  section  2.1.1  below)  as  well  as  of  the  review  of  the  1999  VBER  (see 
section 2.1.2 below). 

22   Empowerment Regulation of 1965, recital 7. 
23   Vertical Guidelines, paragraph 23. 
24   See e.g. VBER, recitals 2 and 5. 
25   Empowerment Regulation of 1965, recital 8 and e.g. VBER, recital 2. 
26   Commission notice on the definition of the relevant market for the purposes of Community competition 
law ("Market Definition Notice"), OJ C 372, 9.12.1997, p. 5. The Market Definition Notice is currently 
subject to a separate review launched in April 2020. 

9 

 
                                                           
2.1.1.  The 1999 block exemption regulations 

In  the  1980s,  the  Commission  adopted  block  exemption  regulations  in  the  field  of 
distribution, relating to exclusive distribution,27 exclusive purchasing28 and franchising.29 

Against the background of a growing feeling of unease in the mid-1990s relating to the 
effectiveness  of  the  Commission's  policy  towards  vertical  agreements  and  notably  the 
approach  of  the  block  exemption  regulations,  the  Commission  thoroughly  reviewed  its 
policy  in  this  field  on  the  basis  of  a  Green  Paper  issued  in  1997. 30 The  stakeholder 
feedback  received  during  the  consultation  process  revealed  that  the  block  exemption 
regulations  adopted  in  the  1980s  were  perceived  as  too  formalistic  and  as  creating  an 
unnecessary  compliance  burden,  especially  for  businesses  without  significant  market 
power such as small and medium-sized enterprises ("SMEs").  It  also  became clear that 
stakeholders expected any new policy to follow a more economic approach, which meant 
analysing  vertical  agreements  in  their  market  context  and  making  the  assessment 
dependent  upon  their  effects  on  the  market.31 As  a  follow-up  to  the  Green  Paper,  the 
Commission outlined a new policy approach towards vertical agreements.32  

In  1999,  the  Commission  adopted  a  new  block  exemption  regulation 33  ("the  1999 
VBER") and, in 2000, accompanying Guidelines on vertical restraints ("the 2000 Vertical 
Guidelines").34 Unlike the previous block exemption regulations, the 1999 VBER applied 
to all types of vertical agreements entered into by two parties or more, except for those 
falling within the scope of any other block exemption regulation, and covered almost all 
sectors of the economy.35  

The  1999  VBER  and  the  2000  Vertical  Guidelines  formed  the  first  package  of  a  new 
generation of block exemption  regulations and guidelines inspired by a  more economic 
and  effects-based  approach.  In  fact,  they  were  based  on  the  principle  that  for  a  proper 

27   Commission Regulation (EEC) No 1983/83 on exclusive distribution agreements, OJ L 173, 30.6.1983, 

p. 1. 

28   Commission Regulation (EEC) No 1984/83 on exclusive purchasing agreements, OJ L 173, 30.6.1983, 

p. 5. 

29   Commission Regulation (EEC) No 4087/88 on franchising agreements, OJ L 359, 28.12.1988, p. 46. 
30   Green paper on vertical restraints in EC competition policy, COM (96) 721 final.  
31   See e.g. Commission staff working document, impact assessment, accompanying document to the draft 
Commission  regulation  (EU)  No  330/2010  on  the  application  of  Article  101(3)  of  the  Treaty  on  the 
Functioning of the European Union to categories of vertical agreements and concerted practices and the 
draft Commission notice - Guidelines on Vertical Restraints ("2010 IA"), C(2010) 2365 fin, SEC(2010) 
413, Annex 1, paragraph 7. 

32   Communication  from  the  Commission  on  the  application  of  the  Community  competition  rules  to 

vertical restraints, COM (98) 544 final. 

33   Commission regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of 
the Treaty to categories of vertical agreements and concerted practices, OJ L 336, 29.12.1999, p. 21.  

34   Commission Notice, Guidelines on Vertical Restraints, OJ C 291, 13.1.2000, p. 1.  
35   For example, the 1999 VBER did not apply to supply and distribution agreements in the motor vehicle 
sector covered by the MVBER. See 1999 VBER, Article 2(5), and 2000 Vertical Guidelines, paragraph 
45.  

10 

 
                                                           
assessment of the likely  effects  of a vertical  agreement, both  negative and positive, the 
conditions on the relevant market have to be taken into account.36  

The  main  elements  of  the  effects-based  approach  underlying  the  1999  VBER  can  be 
summarised as follows:  

First,  the  likelihood  that  efficiency-enhancing  effects  of  vertical  agreements  will 
outweigh  any  anti-competitive  effects  resulting  from  restrictions  contained  therein 
depends on the degree of market power of the undertakings concerned and, therefore, on 
the  extent  to  which  those  undertakings  face  competition  from  other  suppliers  of 
interchangeable goods or services (so-called inter-brand competition).37 Where the share 
of  the  relevant  market  accounted  for  by  the  supplier  does  not  exceed  30%,  it  can  be 
presumed  that  vertical  agreements  that  do  not  contain  certain  types  of  severely  
anti-competitive  restrictions  generally  lead  to  an  improvement  in  production  or 
distribution  and  allow  consumers  a  fair  share  of  the  resulting  benefits. 38 Above  the 
market  share  threshold  of  30%,  there  can  be  no  presumption  that  vertical  agreements 
falling within the scope of Article 101(1) of the Treaty will usually give rise to objective 
advantages  of  such  a  character  and  size  as  to  compensate  for  the  disadvantages  which 
they may create for competition.39  

Second,  vertical  agreements  containing  restrictions  which  do  not  create  objective 
economic  benefits  or  do  not  benefit  consumers40 or  which  are  not  indispensable  to  the 
attainment of any efficiency-enhancing effects cannot be exempted from the application 
of Article 101(1) of the Treaty. This concerns in particular certain types of severely anti-
competitive restrictions such as minimum and fixed resale prices, as well as certain types 
of territorial protection (so-called "hardcore restrictions").41 If an agreement contains one 
or more hardcore restrictions, the agreement falls outside the safe harbour created by the 
vertical block exemption regulation (irrespective of the market share of the undertakings 
concerned) and its compatibility with Article 101 of the Treaty has to be assessed on an 
individual basis.  

Third,  the  market  share  cap  and  the  non-exemption  of  hardcore  restrictions  normally 
ensure that the vertical agreements to which the block exemption applies do not enable 
the participating undertakings to eliminate competition in respect of a substantial part of 
the  products  or  services  in  question. 42  If  an  agreement  benefitting  from  the  block 
exemption  nevertheless  has  effects  incompatible  with  Article  101(3)  of  the  Treaty,  the 
Commission can withdraw the benefit of the vertical block exemption, notably (i) where 

36   See 2010 IA, paragraph 10 of the historic description provided in Annex 1. 
37   1999 VBER, recital 7. 
38   1999 VBER, recital 8. 
39   1999 VBER, recital 9.  
40   Communication  from  the  Commission,  Notice  Guidelines  on  the  application  of  Article  81(3)  of  the 

Treaty, OJ C 101, 27.04.2004, p. 97, paragraph 46.  

41   1999 VBER, recital 10. 
42   1999 VBER, recital 12. 

11 

 
                                                           
the  buyer  has  significant  market  power  in  the  relevant  market  in  which  it  resells  the 
goods  or  provides  the  services,  or  (ii)  where  parallel  networks  of  vertical  agreements 
have  similar  effects  which  significantly  restrict  access  to  a  relevant  market  or 
competition therein (so-called "cumulative effects").43 The Commission did not use this 
possibility to withdraw the benefit of the 1999 VBER.44  

Moreover,  to  strengthen  the  supervision  of  parallel  networks  of  vertical  agreements 
which have similar restrictive effects and which cover more than 50% of a given market, 
the  Commission  can  declare  the  block  exemption  inapplicable  to  vertical  agreements 
containing specific restrictions relating to the market concerned, thereby restoring the full 
application of Article 101 of the Treaty to such agreements.45 So far, the Commission has 
not used this possibility. 

The 2000 Vertical Guidelines, which accompanied the 1999 VBER, set out principles for 
assessing  vertical  agreements  under  the  1999  VBER  and  a  framework  for  assessing 
vertical  agreements  not  benefitting  from  the  safe  harbour  created  by  the  1999  VBER 
under Article 101 of the Treaty. 

2.1.2.  The review of the 1999 VBER 

In  view  of  the  expiry  of  the  1999  VBER  in  May  2010,  the  Commission  launched  a 
review process in 2008. All fact-gathering initiatives carried out during the 2008 review 
indicated that the new architecture of the "first block exemption with guidelines package" 
had  led  to  a  flexible  and  comprehensive  enforcement  policy  regarding  vertical 
restrictions. The review also revealed that by providing a clear analytical  framework to 
both  businesses  and  NCAs,  the  first  block  exemption  with  guidelines  package  had 
enhanced legal certainty, which was considered increasingly important in the context of 
the new decentralised system based on self-assessment introduced by Council Regulation 
1/2003.46 Against this backdrop, the review concluded that there was no need for major 
structural  changes  of  the  package  and  that  the  review  should  focus  on  certain  specific 
aspects of the assessment of vertical restrictions. 

Among the issues raised during the review process, two were particularly debated. First, 
it was considered that there is  a need to  take into account  not  only the possible market 
power of the supplier, but also that of the buyer, since both are relevant for assessing the 
risk that vertical  restrictions may lead to  consumer harm. Second, in  the  context  of the 
growth in  online sales, there  was  a demand for  more  guidance on the circumstances in 
which  restrictions  on  the  use  of  the  internet  by  distributors  should  be  considered  a 

43   1999 VBER, recital 13. 
44   The Commission did however withdraw the benefit of the block exemption under the previous rules in 
two  cases  (Commission  decision  of  25  March  1992  relating  to  a  proceeding  under  Article  85  of  the 
EEC Treaty in Case IV/34.072 - Mars/Langnese and Schöller and Commission decision of 4 December 
1991  relating  to  a  proceeding  under  Article  85  of  the  EEC  Treaty  in  Case  IV/33.157  -  Eco 
System/Peugeot).  
45   1999 VBER, recital 15. 
46   2010 IA, pages 7-8. 

12 

 
                                                           
hardcore restriction.47 Section 2.2 below explains how these two issues were addressed in 
the review process. 

As  a  result  of  the  2008  review,  the  Commission  adopted  a  revised  block  exemption 
regulation, together with revised Vertical Guidelines, which are the subject of the current 
evaluation. 

2.2.  Description of the intervention 

The 2010 VBER and Vertical Guidelines are to a large extent a continuation of previous 
rules in both their structure and substance. They were, however, updated and adapted in 
order to address the issues identified during the 2008 review process.  

The two main changes made as a result of the 2008 review process concerned the market 
share threshold and the treatment of online sales restrictions. 

First, to take into account potential anti-competitive effects stemming from market power 
on the buyer side, it was decided that the block exemption should only apply when both 
the market share of the supplier and also that of the buyer do not exceed the threshold of 
30% (Article 3 of the VBER).48 This double threshold brought the vertical regime in line 
with the approach taken in other block exemption regulations adopted after 200049 and in 
the  Commission's  De  Minimis  Notice  of  2001,50 which  are  all  based  on  a  market  share 
threshold for both the supplier and the buyer of the respective agreement.  

Second, the 2008 review revealed that the development of the internet  as a distribution 
channel had considerably affected the functioning of exclusive and selective distribution, 
which were the two main distribution models at the time.51 To provide stakeholders with 
sufficient legal certainty, it was therefore necessary to clarify under which circumstances 
restrictions  imposed  by  suppliers  on  the  use  of  the  internet  by  distributors  should  be 
considered as hardcore restrictions under the VBER, notably in the context of these two 
distribution models. 

Exclusive distribution enables the supplier to reserve for himself or to designate only one 
distributor in a particular territory and to protect that distributor against other (exclusive) 
distributors  actively  approaching  customers  in  the  exclusively  allocated  territory 
(protection  against  so-called  active  sales).  This  protection  provides  the  exclusive 
distributor  with  more  incentives  to  invest  in  distributing  the  supplier's  products  or 

47   2010 IA, page 8. 
48   2010 IA, pages 12-16.  
49   See e.g. Article 3 of Commission Regulation (EC) No 772/2004 of 27 April 2004 on the application of 
Article  81(3)  of  the  Treaty  to  categories  of  technology  transfer  agreements  ("TTBER"),  OJ  L  123, 
27.4.2004, p. 11. A new version of the TTBER entered into force in 2014, OJ L 93, 28.03.2014, p. 17.  
50   See  paragraph  7(b)  of  the  Communication  from  the  Commission  -  Notice  on  agreements  of  minor 
importance  which  do  not  appreciably  restrict  competition  under  Article  101(1)  of  the  Treaty  on  the 
Functioning of the European Union ("De Minimis Notice"), OJ C 368 22.12.2001, p. 13. A new version 
of the notice entered into force in 2014, OJ C 291 30.8.2014, p. 1.  

51   2010 IA, page 17.  

13 

 
                                                           
services in that territory, as the exclusive distributor will be protected to a certain extent 
against  possible  free-riding  by  other  distributors  on  its  investments.  However,  this 
protection  does  not  allow  the  supplier  to  prohibit  other  distributors  from  responding  to 
unsolicited requests from individual customers (so-called passive sales). It is considered 
that  a  restriction  of  passive  sales  would  go  beyond  what  is  necessary  to  protect  the 
investments made by the exclusive distributor. The possibility to make passive sales into 
exclusive  territories  was  also  seen  as  a  safety  valve  for  protecting  the  internal  market, 
which allows consumers, businesses and their agents to purchase products wherever they 
want  within  the  EU.  Restrictions  of  passive  sales  therefore  qualify  as  hardcore 
restrictions under the VBER.  

The  2008  review  revealed  that  the  use  of  the  internet  made  both  active  and  passive 
selling  to  customers  located  in  an  area  that  had  been  exclusively  allocated  to  another 
distributor  easier  and  more  efficient,  thus  reducing  the  protection  of  the  exclusive 
distributor's  investments.  Due  to  the  increase  in  online  sales  recorded  in  the  context  of 
the 2008 review, a clearer delineation between active and passive sales had to be found in 
order  to  strike  the  right  balance  between  allowing  consumers  to  take  advantage  of  the 
internet  to  overcome  geographic  barriers  and  allowing  suppliers  and  distributors  to 
prevent  free-riding  on  their  investments.  To  tackle  this  issue,  it  was  decided  to  further 
refine  the  distinction  between  passive  and  active  sales  in  the  context  of  the  internet  by 
adding in the Vertical Guidelines examples of practices amounting to active and passive 
sales restrictions respectively.52  

In a selective distribution system, the supplier can choose its distributors on the basis of 
qualitative  and/or  quantitative  criteria  and  prohibit  authorised  distributors  at  wholesale 
and retail level from selling to unauthorised resellers. However, to benefit from the safe 
harbour  created  by  the  VBER,  the  supplier  cannot  restrict  authorised  distributors  from 
making  active  or  passive  sales  to  end  users  and  from  making  cross-supplies  to  other 
authorised  distributors  at  the  wholesale  or  the  retail  level.  Such  restrictions  are 
considered hardcore restrictions under the VBER.  

The 2008 review revealed that the use of the internet could result in free-riding concerns 
when consumers use the pre-sales services (e.g. showroom services and customer advice) 
offered  in  brick-and-mortar  shops  to  inform  their  purchase  decision,  but  then  buy  the 
product for a lower price on the internet from distributors who have not invested in such 
pre-sales  services.  It  was  considered  that  free-riding  could  lead  to  a  sub-optimal 
provision  of  pre-sales  services  and  a  reduction  in  the  performance  of  selective 
distribution  systems.  To  address  this  issue,  it  was  decided  to  clarify  in  the  Vertical 
Guidelines  that  under  the  VBER,  a  supplier  can  require  its  distributors  to  have  one  or 
more  brick-and-mortar  shops  in  order  to  allow  consumers  to  touch  and  feel  and/or 
experience the product, thereby excluding internet-only distributors from its distribution 
network.53  

52   2010 IA, pages 44-45. 
53   2010 IA, pages 44-45. 

14 

 
                                                           
2.3. Intervention logic 

As explained in section 1.2 above, this evaluation looks at the functioning of the VBER, 
together  with  the  Vertical  Guidelines,  as  a  whole.  Therefore,  the  intervention  logic 
(summarised in Figure 1 below) refers to the 2010 VBER in its entirety, together with the 
Vertical  Guidelines  (i.e.  the  intervention),  and  not  only  to  the  specific  provisions  that 
were changed in 2010.  

The VBER exempts specific types of vertical agreements from the prohibition of Article 
101(1) of the Treaty and the Vertical Guidelines provide guidance on the application of 
the VBER and Article 101 of the Treaty to vertical agreements. The general objective of 
the  intervention  is  twofold.  First,  it  aims  to  facilitate  the  enforcement  work  of  the 
Commission and, in view of the decentralised enforcement system, also the work of the 
national  competition  authorities  and  national  courts, which no longer have to  carry 
out  an  individual  assessment  under  Article  101  of  the  Treaty  for  vertical  agreements 
covered by the block exemption.54 Second, it aims to help businesses conduct the self-
assessment of their vertical agreements,55 thereby reducing costs. 

Exempting  certain  vertical  agreements  from  the  prohibition  of  Article  101(1)  of  the 
Treaty  also  contributes  in  the  long-term  to  the  promotion  of  effective  competition  and 
economic  efficiency.  As  recognised  in  the  VBER  itself  "certain  types  of  vertical 
agreements can improve economic efficiency within a chain of production or distribution 
by facilitating better coordination between the participating undertakings. In particular, 
they can lead to a reduction in the transaction and distribution costs of the parties and to 
an optimisation of their sales and investment levels".56 This needs to be seen in light of 
the objective of Article 101 of the Treaty,57 which, according to the Vertical Guidelines 
is  "to  ensure  that  undertakings  do  not  use  agreements  –  in  this  context,  vertical 
agreements  –  to  restrict  competition  on  the  market  to  the  detriment  of  consumers. 
Assessing  vertical  restraints  is  also  important  in  the  context  of  the  wider  objective  of 
achieving an integrated internal market. Market integration enhances competition in the 
European Union."58 

54   Empowerment Regulation of 1965, recital 3. 
55   Vertical Guidelines, paragraph 3. 
56   VBER, recital 6. 
57   See e.g. judgment of 18 April 1975 in Case 6/72, ECLI:EU:C:1973:22,  Europemballage Corporation 
and  Continental  Can  Company  v  Commission,  paragraphs  25-26;  judgement  of  17  February  2011  in 
Case C-52/09, ECLI:EU:C:2011:83, TeliaSonera Sverige, paragraph 22; judgment of 27 March 2012 in 
Case  C-209/10, ECLI:EU:C:2012:172,  Post Danmark A/S v Konkurrencerådet, paragraphs 20-24 and 
judgment  of  6  September  2017  in  Case  C-413/14  P,  ECLI:EU:C:2017:632,  Intel  Corp.  Inc.  v 
Commission, paragraph 133. See also judgment of 6 October 2009 in cases C-501/06 P, C-513/06 P, C-
515/06 P and C-519/06 P, ECLI:EU:C:2009:610,  GlaxoSmithKline Services Unlimited v Commission, 
paragraph  63,  according  to  which  Article  101  of  the Treaty  "aims  to  protect  not  only  the  interests  of 
competitors  or  of  consumers,  but  also  the  structure  of  the  market  and,  in  so  doing,  competition  as 
such".  

58   Vertical Guidelines, paragraph 7. 

15 

 
                                                           
The  specific  objectives  of  the  VBER,  together  with  the  Vertical  Guidelines,  are  better 
understood in  the context of the wider legal  framework for applying Article 101 of the 
Treaty that was in place in 2010 (and remains in place today), as further explained below. 

First,  Council  Regulation  1/2003  abolished  the  pre-notification  of  agreements  to  the 
Commission  as  established  by  the  previous  Council  Regulation  17/62. 59  Businesses 
therefore  can  no  longer  notify  their  agreements  to  the  Commission  in  order  to  benefit 
from immunity from fines. They have to self-assess the compliance of their agreements 
with Article 101 of the Treaty. In order to do this, businesses can rely on the existing case 
law of the Union courts, as well as on the enforcement practice of the Commission and 
the NCAs. However, the assessments in such judgments and decisions are case-specific 
and  cannot  always  be  directly  applied  to  other  markets  and  different  practices. 
Consequently, irrespective of their precedent value, they provide a limited degree of legal 
certainty to businesses. In the absence of broader guidance drafted in more general terms, 
self-assessing  agreements  can  create  a  significant  burden,  especially  for  SMEs,  which 
may  lack  the  necessary  resources  and/or  legal  expertise.  There  was  therefore  a  need  to 
provide greater legal certainty and more guidance for businesses that enter into vertical 
agreements  to  assist  them with  their self-assessment. This  was  also  in  line with  Article 
103(2)(b)  of  the  Treaty,  which  provides  that  the  Council,  in  laying  down  rules  for  the 
application of Article 101(3) of the Treaty, should aim to simplify administration to the 
greatest possible extent. 

Second, the Commission is empowered to adopt block exemptions, especially as regards 
vertical  agreements,  by  the  Empowerment  Regulation  of  1965.  This  empowerment, 
however, is  necessarily limited to  those agreements  falling within Article 101(1) of the 
Treaty  for  which  it  can  be  assumed  with  sufficient  certainty  that  they  satisfy  the 
conditions  of  Article  101(3)  of  the  Treaty.60 In  providing  additional  legal  certainty  and 
guidance  through  a  block  exemption,  the  Commission  therefore  has  to  take  a  cautious 
approach  when  setting  out  the  conditions  which  must  be  met  for  an  agreement  to  be 
exempted or not, especially in order to avoid exempting agreements for which it cannot 
be assumed with sufficient certainty that they satisfy the conditions of Article 101(3) of 
the Treaty. The latter would constitute a "false positive", which would not be in line with 
the Treaty and the requirements of the Empowerment Regulation of 1965. In particular, 
the Commission takes account of the market power of the parties to the agreement, since 
the  likelihood  that  "efficiency-enhancing  effects  will  outweigh  any  anti-competitive 
effects  due  to  restrictions  contained  in  vertical  agreements  depends  on  the  degree  of 
market  power  of  the  parties  to  the  agreement".61 The  Commission  also  defines  certain 
types of severe restrictions of competition (hardcore restrictions), which, if present in an 
agreement, remove the benefit of the exemption for the entire agreement, since in these 
cases  there  cannot  be  sufficient  certainty  that  the  agreement  satisfies  the  conditions  of 

59   Council Regulation (EEC) No 17, First Regulation implementing Articles 85 and 86 of the Treaty, OJ 

13, 21.2.1962, p. 204. 

60   Empowerment Regulation of 1965, recital 12 and VBER, recital 5. 
61   VBER, recital 7. 

16 

 
                                                           
Article 101(3) of the Treaty.62 In line with that provision, the conditions set by the VBER 
should  normally  ensure  that  the  agreements  to  which  it  applies  "do  not  enable  the 
participating undertakings to eliminate competition in respect of a substantial part of the 
products  in  question".63 At  the  same  time,  the  Commission  also  strives  to  avoid  not 
exempting  an  agreement  for  which  it  can  be  assumed  with  sufficient  certainty  that  it 
satisfies  the  conditions  of  Article  101(3)  of  the  Treaty  ("false  negatives"),  as  such  a 
situation would increase the burden for businesses when self-assessing the compliance of 
their agreements with Article 101(3) of the Treaty. 

Third, Council Regulation 1/2003 also decentralised the application of Article 101(3) of 
the Treaty by empowering national competition authorities and national  courts to apply 
both Article 101(1) and Article 101(3) of the Treaty, which in the past was a prerogative 
of  the  Commission  only.  This  decentralised  enforcement  system  created  a  need  to 
provide a common framework of assessment for the national competition authorities and 
national courts, in order to ensure that businesses operating across the EU could benefit 
from a level playing field.64  

It follows from the foregoing that the VBER, together with the Vertical Guidelines, has 
the following three specific objectives: 

(1) The VBER, together with the Vertical Guidelines, aims to provide legal certainty to 
stakeholders  as  to  which  vertical  agreements  can  be  considered  compliant  with 
Article 101 of the Treaty on the basis of a simpler set of rules and which agreements 
require an extended individual assessment, thereby making it easier for stakeholders 
to perform the self-assessment required by the wider legal framework. 

(2) In  line  with  the  Empowerment  Regulation  of  1965,  the  VBER  aims  to  identify  the 
conditions  that  vertical  agreements  need  to  meet  in  order  to  benefit  from  the  block 
exemption (such as market share thresholds or the absence of hardcore restrictions) in 
a  way  that  reduces  the  risk  of  "false  positives"  (i.e.  exempting  an  agreement  for 
which it cannot be assumed with sufficient certainty that it satisfies the conditions of 
Article 101(3) of the Treaty). At the same time, in view of the general objective of the 
intervention,  which  is  to  facilitate  the  enforcement  work  of  the  relevant  authorities 
and  to  help  businesses  conduct  the  self-assessment  of  their  vertical  agreements,  the 
VBER  also  aims  to  reduce  the  risk  of  "false  negatives"  (i.e.  not  exempting  an 
agreement  for  which  it  can  be  assumed  with  sufficient  certainty  that  it  satisfies  the 
conditions of Article 101(3) of the Treaty). The latter is however of lesser importance 
than  the  avoidance  of  "false  positives",  since  "false  negatives"  do  not  result  in  a 

62   Empowerment  Regulation  of  1965,  recital  9.  See  also  paragraph  46  of  the  Article  81(3)  Guidelines, 
which  explains  that  severe  restrictions  of  competition  are  unlikely  to  fulfil  the  conditions  of  Article 
101(3)  of  the  Treaty.  Agreements  of  this  nature  generally  fail  (at  least)  the  two  first  conditions  of 
Article  101(3)  of  the  Treaty.  Moreover,  these  types  of  agreements  generally  also  fail  the 
indispensability test under the third condition.  

63   VBER, recital 12. 
64   The  Empowerment  Regulation  of  1965,  recital  8,  also  recalls  that  the  Commission  shall  exercise  its 

powers "in close and constant liaison with the competent authorities of the Member States". 

17 

 
                                                           
situation that would be in breach of the Treaty and the Empowerment Regulation of 
1965. 

(3) The  VBER,  together  with  the  Vertical  Guidelines,  also  aims  to  provide  a  common 
framework  of  assessment  for  national  competition  authorities  and  national 
courts,  in  order  to  ensure  consistency  in  the  application  of  Article  101  of  the 
Treaty. NCAs and national courts are bound by the directly applicable provisions of 
the VBER. The Vertical Guidelines do not bind the NCAs or national courts, but they 
are  –  as  emerged  from  the  public  consultation  for  the  purposes  of  this  evaluation  – 
typically taken into account when assessing the compatibility of vertical agreements 
with Article 101 of the Treaty.  

18 

 
 
FIGURE 1 : INTERVENTION LOGIC FOR THE VBER, TOGETHER WITH THE VERTICAL GUIDELINES 

Needs 

Objectives 

 To provide, to the 
extent possible, 
legal certainty to 
businesses, in view 
of the fact that they 
have to self-assess 
the compliance of 
their vertical 
agreements with EU 
competition rules. 

 To provide a 

common framework 
of assessment, in 
view of the 
decentralised 
application of 
Article 101 by the 
Commission, NCAs 
and national courts. 

General objective  
 To facilitate the enforcement 
work of the Commission, 
NCAs and national courts and 
to help businesses conduct the 
self-assessment of their 
vertical agreements. 

Specific objectives 
 To provide legal certainty as 
to which agreements comply 
with Article 101 of the Treaty 
on the basis of a simpler set 
of rules; 

 To avoid false positives and, 
if possible, false negatives; 

 To provide a common 

framework of assessment in 
order to ensure consistency in 
the application of Article 101 
of the Treaty by NCAs and 
national courts. 

External Factors 

Activities / 
Inputs 

 To define 

conditions, in 
line with the 
current market 
circumstances 
and on the basis 
of the 
Commission’s 
power to adopt 
block 
exemptions. 

 To issue 

guidance in the 
field of 
competition, 
that vertical 
agreements need 
to meet in order 
to benefit from 
the block 
exemption. 

Output 

Results 

Impacts 

Promote 
effective 
competition 
and economic 
efficiency for 
the benefit of 
consumers in 
the internal 
market. 

Businesses 
using the 
2010 VBER 
and Vertical 
Guidelines to 
self-assess the 
compliance of 
their vertical 
agreements 
with Article 
101 of the 
Treaty. 

 Improved legal 
certainty and 
guidance for 
assessing the 
compatibility of 
vertical agreements 
with Article 101 of 
the Treaty; 

 Captures only 

those agreements 
for which it can be 
assumed with 
sufficient certainty 
that they satisfy the 
conditions of 
Article 101(3); 

 Ensures consistent 

application of 
Article 101 of the 
Treaty throughout 
the EU. 

New market trends and technological developments can adversely affect the impact of the intervention, e.g. if the 
definitions and conditions of the VBER are not capable of properly capturing new business models and market realities. 

19 

 
 
 
 
 
 
 
 
2.4. Evaluation baseline 

The  main  point  of  comparison  for  the  evaluation  is  the  hypothetical  situation  of  not 
having a VBER and Vertical Guidelines in place.65 The evaluation therefore looks at the 
functioning  of  the  VBER,  together  with  the  Vertical  Guidelines,  as  compared  to  a 
situation  in  which  the  assessment  of  whether  vertical  agreements  comply  with  Article 
101  of  the  Treaty  would  have  to  be  done  only  in  light  of  other  Commission  guidance, 
relevant  case  law  at  EU  and  national  level,  as  well  as  the  enforcement  practice  of  the 
Commission and the national competition authorities. 

The  baseline  for  comparison,  however,  depends  on  the  evaluation  criteria  and  related 
evaluation questions to be assessed.  

The effectiveness analysis looks at whether the objectives of the VBER, together with the 
Vertical Guidelines, have been met, and hence looks at what has been the impact of the 
initiative  compared  to  a  situation  without  it.  At  the  same  time,  the  analysis  looks  at 
whether there is still room for improvement in meeting the objectives. 

The  efficiency  analysis  compares  the  actual  situation  with  the  hypothetical  situation  of 
not having a VBER and Vertical Guidelines in place, in order to determine what are the 
costs it entails, whether these are proportionate to the benefits it brings and whether the 
costs of ensuring compliance of vertical agreements with Article 101 of the Treaty would 
increase  in  the  absence  of  the  VBER  and  the  Vertical  Guidelines.  However,  the 
efficiency  analysis  also  compares  the  current  situation  with  the  situation  before  the 
intervention (i.e. when the 1999 VBER and the 2000 Vertical Guidelines were in place), 
in order to determine whether the current rules have increased costs for stakeholders. 

3.  EVALUATION QUESTIONS 

This  evaluation  assesses  the  VBER  and  the  Vertical  Guidelines  against  the  five  Better 
Regulation criteria, namely effectiveness (see section 3.1 below), efficiency (see section 
3.2 below), relevance (see section 3.3 below), coherence (see section 3.4 below) and EU 
added value (see section 3.5 below), using the specific evaluation questions for each of 
them. 

3.1. Effectiveness 

1.  What  is  the  level  of  legal  certainty  that  the  VBER,  together  with  the  Vertical 
Guidelines,  provides  for  assessing  whether  vertical  agreements  and/or  specific 
clauses/restrictions  are  exempted  from  the  application  of  Article  101  of  the  Treaty 
and thus compliant with this provision? 

65   This  point  of  comparison  is  hypothetical  as  prior  to  the  adoption  of  the  2010  VBER  and  Vertical 

Guidelines, the 1999 VBER and the 2000 Vertical Guidelines were in place. 

20 

 
 
                                                           
2.  To what extent do the conditions currently defined in the VBER, as interpreted in the 
Vertical  Guidelines,  meet  the  objective  of  exempting  only  those  agreements  for 
which  it  can  be  assumed  with  sufficient  certainty  that  they  generate  efficiencies  in 
line with Article 101(3) of the Treaty? 

3.  To  what  extent  does  the  VBER,  together  with  the  Vertical  Guidelines,  provide  a 
common framework for the assessment of the compliance of vertical agreements with 
Article 101 of the Treaty in order to ensure a consistent application of Article 101 of 
the  Treaty  by  national  competition  authorities  and  national  courts  to  vertical 
agreements? 

3.2. Efficiency 

4.  Are the costs for assessing whether the VBER, together with the Vertical Guidelines, 
is  applicable  to  certain  vertical  agreements  proportionate  to  the  benefits  that  the 
VBER, together with the Vertical Guidelines, brings for stakeholders? 

5.  Is there scope for further simplification and cost reduction? 

6.  Would  the  costs  of  ensuring  compliance  of  vertical  agreements  with  Article  101  of 

the Treaty increase if the VBER were not renewed? 

7.  Have the costs generated by the application of the VBER, together with the Vertical 
Guidelines,  increased  as  compared  to  the  1999  VBER  and  the  2000  Vertical 
Guidelines? 

3.3. Relevance 

8.  How well do the objectives of the VBER, together with the Vertical Guidelines (i.e. 
to  provide  legal  certainty  for  assessing  whether  vertical  agreements  comply  with 
Article  101  of  the  Treaty,  to  properly  capture  under  the  block  exemption  those 
vertical  agreements  that  can  be  considered  with  sufficient  certainty  as  efficiency-
enhancing and to provide a common framework to ensure a consistent application by 
national  competition  authorities  and  national  courts  of  the  vertical  rules  across  the 
EU) still correspond to the needs?  

3.4. Coherence 

9.  Is the VBER, together with the Vertical Guidelines, coherent with other Commission 
instruments  that provide guidance on the interpretation  of Article 101 of the Treaty 
and  with  other  EU  legislation  with  relevance  for  vertical  supply  and  distribution 
agreements?  

3.5. EU added value 

10. Does the VBER, together with the Vertical Guidelines, as an intervention at EU level, 
add  value  in  the  assessment  of  the  compatibility  of  vertical  agreements  with 
Article 101 of the Treaty? 

21 

 
4.  METHODOLOGY 

The  evaluation  assessed  the  functioning  of  the  VBER,  together  with  the  Vertical 
Guidelines,  both  from  a  general  perspective  taking  into  account  the  intervention  as  a 
whole and more specifically with regard to the conditions set out in the VBER, together 
with the guidance provided thereon in the Vertical Guidelines.  

This  section  is  structured  as  follows:  Section  4.1  identifies  the  sources  used  for 
evaluating the functioning of the VBER,  together with  the Vertical  Guidelines. Section 
4.2 describes how the evidence gathered from various sources was processed. Section 4.3 
explains the limitations of the analysis carried out on this basis and the extent to which 
they could be addressed in the evaluation. 

4.1. Description and use of the sources  

During the evaluation phase, the Commission gathered evidence on the functioning of the 
VBER,  together  with  the  Vertical  Guidelines,  from  various  sources.  These  included  a 
public consultation (see section 4.1.1. below), a targeted NCA consultation (see section 
4.1.2  below),  a  stakeholder  workshop  (see  section  4.1.3  below),  an  evaluation  support 
study (see section 4.1.4 below), spontaneous stakeholder submissions (see section 4.1.5 
below)  and  evidence  gathered  through  other  Commission  initiatives  (see  section  4.1.6 
below).  

4.1.1.  Public consultation 

Between  4  February  2019  and  27  May  2019,  the  Commission  carried  out  a  public 
consultation to gather stakeholder views on the functioning of the VBER, together with 
the  Vertical  Guidelines.  The  public  consultation  aimed  to  gather  qualitative  and 
quantitative  evidence  on  all  five  evaluation  criteria  (i.e.  effectiveness,  efficiency, 
relevance, coherence and EU added value). 

The  public  consultation  generated  164  contributions  submitted  through  the  online 
questionnaire and 13 position papers submitted outside the online tool. The contributions 
in  particular  business  associations  and 
came  from  a  variety  of  stakeholders, 
companies/business  organisations  with  international  or  national  reach  from  several  EU 
Member  States,  representing  different  levels  of  the  supply  chain  (e.g.  manufacturers, 
online distributors and retailers). The summary report of the contributions to the public 
consultation  was  published  on  the  Better  Regulation  Portal66 and  the  dedicated  VBER 
review webpage on DG Competition's website67 on 30 July 2019. The summary report is 
also part of the synopsis report provided in Annex 2 to the Staff Working Document. 

66   See 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/1936-Evaluation-of-the-

Vertical-Block-Exemption-Regulation/public-consultation.  

67   See section 1 titled "Results of the public consultation" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

22 

 
                                                           
4.1.2.  Targeted consultation of national competition authorities 

During  the  evaluation  phase,  the  Commission  conducted  a  targeted  consultation  of 
NCAs,  which  was  based  on  the  same  questionnaire  as  the  one  used  in  the  public 
consultation. The Commission received 20 contributions, including one coming from one 
of the EFTA States. The information provided by NCAs contributed to the assessment of 
all  five  evaluation  criteria.  A  summary  report  of  the  targeted  NCA  consultation  was 
published on the dedicated VBER review webpage on DG Competition's website68 on 13 
December  2019.  It  is  also  part  of  the  synopsis  report  provided  in  Annex  2  to  the  Staff 
Working Document. 

4.1.3.  Stakeholder workshop 

On  14  November  2019  (afternoon)  and  15  November  2019  (full  day),  the  Commission 
carried out a stakeholder workshop to gather additional evidence about the functioning of 
the VBER, together with the Vertical Guidelines. Building on the outcome of the public 
consultation,  the  objective  of  the  workshop  was  to  deepen  the  discussion  on  the  issues 
that stakeholders considered not to be functioning well in the current framework and that, 
in their view, would deserve re-thinking to ensure that the rules remain relevant for the 
coming years. Considering that the enforcement of EU competition law is driven by the 
consumer welfare objective, defined as including all relevant parameters of competition 
(e.g. price, output, quality, choice and innovation), the workshop was intended to focus 
on how consumers are impacted by the identified shortcomings.  

Participation  in  the  workshop  was  limited  to  stakeholders  who  had  contributed  to  the 
public  consultation  and  consumer  associations.  Approximately  150  participants  from 
companies  and  business  associations  representing  a  variety  of  sectors  attended  the 
workshop.  The  information  resulting  from  these  discussions  contributed  to  the 
assessment of the evaluation criteria of effectiveness and relevance. A summary report of 
the stakeholder workshop was published on the dedicated VBER review webpage on DG 
Competition's  website 69  on  5  February  2020.  It  is  also  part  of  the  synopsis  report 
provided in Annex 2 to the Staff Working Document. 

4.1.4.  External evaluation support study 

The  Commission  commissioned  an  external  evaluation  support  study  ("evaluation 
study") in order to carry out an independent evaluation of the functioning of the VBER, 
together with the Vertical Guidelines, with a particular focus on the evaluation criteria of 
effectiveness, efficiency and relevance. 

The  purpose  of  the  evaluation  study  was  to  gather  qualitative  and  quantitative 
information on the basis of nine tasks. These included (i) four stakeholder surveys aimed 

68   See section 3 titled "Contributions of the NCAs to the evaluation of the VBER and the VGL" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

69   See section 4 titled "Stakeholder workshop" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

23 

 
                                                           
to  collect  evidence  on  specific  restrictions  in  Germany,  France,  Italy,  Sweden,  Poland 
and  Hungary  mainly  from  stakeholders  that  had  not  participated  in  the  public 
consultation  and  (ii)  a  consumer  survey  aimed  to  collect  evidence  on  the  purchasing 
behaviour of European consumers, notably with regard to the interaction between online 
and offline channels. The consumer survey was based on the same set of Member States 
used  for  the  stakeholder  surveys  and  covered  2.500  consumers  per  Member  State,  thus 
resulting in a total of 15.000 consumer interviews. 

The final study report was submitted to the Commission on 3 April 2020 and published 
on  the  dedicated  VBER  review  webpage  on  DG  Competition's  website 70 on  25  May 
2020.  The  final  consumer  survey  report  was  submitted  to  the  Commission  on  27  April 
2020 and published, together with the final study report, on the dedicated VBER review 
webpage on DG Competition's website71 on 25 May 2020.  

4.1.5.  Spontaneous stakeholder submissions  

In  the  course  of  the  evaluation,  the  Commission  received  several  spontaneous 
submissions from stakeholders who had either not participated in the public consultation 
or  wanted  to  supplement  their  contribution  to  the  public  consultation  with  additional 
evidence. These included studies carried out by stakeholders to provide the Commission 
with additional evidence. All such submissions were published on the dedicated VBER 
review webpage on DG Competition's website,72 except for a few for which stakeholders 
had  asked  the  Commission  not  to  publish  for  confidentiality  reasons.  The  Commission 
used  the  latter  to  enhance  its  understanding  of  a  particular  stakeholder  position  but  did 
not  rely  on  the  information  contained  therein  for  any  of  the  conclusions  in  the  Staff 
Working Document.   

4.1.6.  Evidence gathered through other Commission initiatives 

On 6 May 2015, the Commission launched a sector inquiry into the electronic commerce 
of  consumer  goods  and  digital  content  in  the  EU  ("e-commerce  sector  inquiry").  The     
e-commerce  sector  inquiry  allowed  the  Commission  to  obtain  an  overview  of  the 
prevailing market trends and gather evidence on barriers to competition in e-commerce. 
It also allowed the Commission to understand the prevalence of certain business practices 
and  their  underlying  rationale.  The  results  of  the  e-commerce  sector  inquiry  were 
published in the form of a final report and an accompanying Staff Working Document on 
the website of DG Competition73 on 10 May 2017.  

70   See section 5 titled "Evaluation support study" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

71   See section 5 titled "Evaluation support study" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

72   See section 2 titled "Contributions outside the public consultation" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

73   See https://ec.europa.eu/competition/antitrust/sector_inquiries_e_commerce.html.  

24 

 
                                                           
Despite the scope of the VBER being broader than the scope of the e-commerce sector 
inquiry, the evidence gathered in  the context  of the latter is  relevant  for this evaluation 
and notably for the assessment of the evaluation criteria of effectiveness and relevance. 

Moreover,  in  recent  years,  the  Commission  has  enforced  the  EU  competition  rules  in 
relation  to  vertical  restrictions  in  a  number  of  cases.  The  Commission's  enforcement 
practice with regard to vertical restrictions is relevant for the assessment of the evaluation 
criteria  of  effectiveness,  relevance  and  coherence  and  is  described  in  more  detail  in 
section 5.1.3 below. 

In  addition,  in  April  2018,  following  the  judgment  of  the  European  Court  of  Justice 
("CJEU")  in  the  Coty  case,74 a  Competition  policy  brief  on  the  application  of  the  EU 
competition rules to marketplace bans ("policy brief") was issued.75 The case concerned a 
contractual  restriction  included  in  a  selective  distribution  agreement  between  Coty 
Germany  GmbH  ("Coty"),  which  is  one  of  Germany's  leading  suppliers  of  luxury 
cosmetics,  and  one  of  its  distributors,  Parfümerie  Akzente  GmbH  ("Parfümerie 
Akzente").  The  marketplace  ban  introduced  by  Coty  aimed  to  prohibit  Parfümerie 
Akzente from distributing its products on "Amazon.de" through Amazon's marketplace, 
which enables third-party sellers such as Parfümerie Akzente to sell products alongside 
Amazon's offerings. 

Against  this  background,  the  policy  brief  provides  a  common  point  of  reference  to 
stakeholders  in  the  Member  States  on  how  to  apply  Article  101  of  the  Treaty  to  a 
prohibition by a supplier on the use of third-party marketplaces by its distributors.  

4.2. Processing and triangulating of the evidence collected 

For the purposes of the evaluation of the VBER, together with the Vertical Guidelines, 
evidence from the various sources had to be analysed and triangulated. 

The  main  sources  of  the  evidence  used  to  inform  the  assessment  of  each  evaluation 
criterion are listed in the table below. A further breakdown of this table, which includes 
the evaluation  questions  for each criterion and a  more detailed reference  to  the sources 
used,  is  provided  in  the  evaluation  matrix  contained  in  Annex  3  to  the  Staff  Working 
Document. 

74   Judgment of 6 December 2017 in Case C-230/16, EU:C:2017:941, Coty Germany GmbH v Parfümerie 

Akzente GmbH. 

75   See https://ec.europa.eu/competition/publications/cpb/2018/kdak18001enn.pdf.  

25 

 
 
                                                           
Sources 

Public 
consultation 

(including 
spontaneous 
submissions) 

Targeted 
NCA 
consultation 

Stakeholder 
workshop 

Study 

Other 
Commission 
initiatives 

Criteria 

Effectiveness  ✔ 

Efficiency 

Relevance 

Coherence 

EU added 
value 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

✔ 

In line with the general objective of the VBER, the evidence-gathering carried out by the 
Commission focused primarily on the views of other agencies enforcing EU competition 
law  (i.e.  NCAs)  and  businesses  having  to  self-assess  the  compliance  of  their  vertical 
agreements with Article 101 of the Treaty. Through the targeted consultation and some 
of the tasks of the evaluation study, the Commission collected the views of NCAs, which 
were  complemented  with  the  Commission’s  own  experience  in  this  area  and  additional 
research  performed  by  the  contractor.  Through  the  public  consultation,  the  stakeholder 
workshop  and  some  of  the  tasks  of  the  evaluation  study,  the  Commission  collected 
mainly the views of businesses, business associations and law firms advising businesses 
in  this area of law.  In this context,  the evaluation took due account  of the fact  that the 
views  of  businesses  operating  at  different  levels  of  the  supply  chain  (i.e.  supply, 
wholesale  or  retail  level)  and  distributors  relying  on  different  channels  of  distribution 
(i.e.  brick-and-mortar  or  online)  may  differ  with  regard  to  a  number  of  aspects  of  the 
rules.  

For the assessment of each evaluation criterion, the Commission proceeded as follows: 

The assessment started with the results of the public consultation. An in-depth analysis 
of the feedback resulted in  a preliminary but  comprehensive understanding of the main 
issues faced by stakeholders as regards the functioning of the current rules. It allowed the 
Commission  to  establish  the  issues  on  which  stakeholders  held  common  positions,  as 
well as the issues on which their positions diverged. The assessment of the specific issues 
raised  was  done  based  on  (i)  the  examples  and  the  level  of  detail  provided  by 
stakeholders to support their concerns with concrete evidence, (ii) the variety of different 
positions and (iii) the extent to which different types or groups of stakeholders shared the 
same view. 

26 

 
 
 
 
 
 
 
 
 
 
 
 
The stakeholder workshop provided additional input, which helped, first, to deepen the 
understanding of the issues raised in response to the public consultation and, second, to 
preliminarily  evaluate  not  only  their  impact  on  stakeholders  but  also  on  consumers. 
During  the  workshop,  stakeholders  were  able  to  decide  freely  on  the  topics  for 
discussion.  In  particular,  stakeholders  were  therefore  able  to  elaborate  on  the  views 
already  expressed  in  the  public  consultation  by,  for  instance,  providing  examples  of 
specific  issues  and  explaining  how  those  issues  impacted  stakeholders  and  consumers. 
Despite having the possibility to propose new topics, stakeholders did not raise any new 
issues. 

The combined results of the public consultation and the stakeholder workshop provided 
the  stakeholders’  perspective  on  the  effectiveness,  efficiency,  relevance,  coherence  and 
EU added value of the VBER, together with the Vertical Guidelines. 

The  targeted  consultation  of  the  national  competition  authorities  aimed  to  gather 
their  perspective  on  the  five  evaluation  criteria.  It  provided  a  significant  amount  of 
evidence  on  the  challenges  faced  by  NCAs  in  applying  the  VBER  and  considering  the 
Vertical Guidelines, as well as their views on a number of specific issues with the current 
rules.  

The evidence of the public consultation and the stakeholder workshop were compared to 
and contrasted with  the  evidence resulting from  the  targeted consultation  of the NCAs. 
The  combination  of  these  sources  resulted  in  a  more  complete  and  balanced 
understanding of the areas where the VBER,  together with  the Vertical  Guidelines, has 
not been functioning well, or not functioning as well as it could. 

On this basis, the evaluation study was designed to (i) enrich the list of issues raised by 
expanding  the  number  of  stakeholders  interviewed,  (ii)  further  deepen  and/or  add  a 
different perspective on issues that were already identified (with the aim of correcting for 
potential  biases  that  might  have  been  present  in  the  evidence  collected  previously),  as 
well as (iii) expand and complement the results of the e-commerce sector inquiry on the 
main market trends since the adoption of the VBER in 2010.  

4.3. Limitations of the analysis 

The analysis of the different evaluation criteria, including the methodology applied and 
the  evidence  sources  used  for  that  purpose,  is  subject  to  the  following  limitations:  the 
difficulty  of  gathering  evidence  on  VBER  related  costs  and  benefits  (see  section  4.3.1 
below),  a  certain  lack  of  representativeness  of  stakeholder  feedback  (see  section  4.3.2 
below) and a lack of information about consumer views (see section 4.3.3 below). Each 
of  the  sections  describes  the  nature  of  the  limitation  and  the  extent  to  which  it  was 
possible to address it in the evaluation.  

4.3.1.  Evidence on VBER related costs and benefits  

As regards the evaluation criterion of efficiency, it proved difficult to collect quantitative 
evidence on the costs of applying the VBER, together with the Vertical Guidelines. This 
is  mainly due to  the fact  that businesses appear to  assess the costs they incur to  ensure 

27 

 
compliance  of  their  business  operations  with  EU  competition  law  at  a  general  level. 
Businesses  therefore  do  not  appear  to  distinguish  between  the  type  of  agreement 
concerned  or  the  instrument  relied  on  for  the  purposes  of  their  self-assessment  (e.g. 
VBER or the Vertical Guidelines). 

The difficulty of gathering cost related evidence is reflected in the low response rate of 
stakeholders  to  the  public  consultation  with  regard  to  the  questions  aimed  at  gathering 
best efforts estimates of VBER related compliance costs. Only two companies out of the 
total  of  164  respondents  provided  an  estimate  of  their  compliance  costs,  with  the  two 
estimates however differing to a significant extent. Nor were the NCAs able to quantify 
the costs that the application of the VBER, together with the Vertical Guidelines, created 
for them. 

In  the  same  way,  it  proved  difficult  to  obtain  quantitative  evidence  on  the  balance 
between  the  benefits  and  the  costs  of  applying  the  VBER,  together  with  the  Vertical 
Guidelines. Businesses only provided qualitative evidence in reply to the question in the 
public  consultation  relating  to  this  issue,  which  reflects  the  difficulty  for  businesses  to 
properly estimate this parameter. The same applies to the NCAs. 

To overcome this limitation, the study aimed to gather additional evidence about VBER 
related  costs  and  benefits  on  the  basis  of  ten  case  studies  in  the  form  of  interviews 
conducted  by  phone,  e-mail  or  in  person.  The  interviewed  respondents  were  law  firms 
advising  clients  on  vertical  restrictions,  industry  associations,  a  manufacturer  of 
construction  equipment  who  operates  globally,  and  a  professor  of  competition  law.  As 
reported  in  the  study,  none  of  the  respondents  could  provide  any  specific  figures 
concerning the costs in question but all of them provided a qualitative assessment.   

The lack of quantitative data in relation to both these issues made it difficult to provide a 
robust quantitative assessment of the efficiency of the VBER, together with the Vertical 
Guidelines.  The  conclusions  drawn  in  section  5.2.2  below  therefore  essentially  rely  on 
the qualitative evidence provided by stakeholders in response to the public consultation 
and in the context of the evaluation study.  

4.3.2.  Representativeness of stakeholder feedback 

Evaluation activities subject to voluntary participation, by definition, do not necessarily 
lead  to  representative  results.  In  this  evaluation,  this  applies  to  the  public  consultation 
and  the  stakeholder  workshop,  which  was  conceived  as  a  follow-up  to  the  public 
consultation  and  therefore  mirrored  participation  in  the  public  consultation.  While  the 
Commission received contributions from a large variety of stakeholder groups, some of 
them accounted for a higher share of responses than others. However, this did not have 
any  meaningful  impact  on  the  results  of  the  evaluation  since  the  areas  identified  by 
stakeholders  as  either  functioning  well  or  not  functioning  well  did  not  differ  to  an 
appreciable extent within a particular stakeholder group. This means that a more limited 
participation of some stakeholder groups did not result in a less complete overview of the 
views  of  those  stakeholder  groups  on  the  functioning  of  the  VBER,  together  with  the 
Vertical Guidelines.  

28 

 
Moreover, the study aimed at reducing any potential bias within each stakeholder group 
to the detriment of micro and small stakeholders who may not have had the resources to 
participate in  the public  consultation  or the stakeholder workshop. Corrective measures 
included  increasing  the  sample  size,  simplifying  the  questionnaires  for  the  consumer 
surveys and reaching out specifically to micro and small stakeholders. 

In the assessment set out in section 5.2 below, reference is made to specific stakeholder 
groups  whenever  the  views  reported  were  shared  primarily  by  one  or  more  different 
stakeholder groups. While indicative of a trend, the fact that a view was broadly shared 
by all or only some of the stakeholder groups, does not however mean that the evaluation 
disregards  diverging  views,  both  within  the  same  or  across  different  stakeholder 
groups/sectors. This is also reflected in Annex 4 to this Staff Working Document, which 
presents  the  different  views  and  issues  raised  by  stakeholders  per  area  of  the  rules, 
regardless  of whether they  were supported by a  large or small number of stakeholders. 
These views will be taken into account in any next steps following the evaluation.  

4.3.3.  Limited evidence about consumer views 

Consumers  and  consumer  associations  only  made  a  limited  contribution  to  this 
evaluation, most likely for the following reasons.  

First, the VBER, together with the Vertical Guidelines, is a technical piece of legislation, 
which is primarily aimed at providing guidance to businesses self-assessing compliance 
of  their  vertical  agreements  with  EU  competition  law.  Consumers  and  consumer 
associations  may  therefore  be  neither  aware  of  its  existence,  nor  familiar  with  its 
functioning.  

Second,  despite  having  an  impact  on  the  prices  at  which  consumers  buy  products  and 
services and the choice of products and services available to them, consumers are neither 
a  party  to  the  vertical  agreements  entered  into  between  businesses  active  in  the  supply 
chain  of  goods  and  services,  nor  privy  to  the  conditions  stipulated  in  such  agreements. 
They are therefore not able to link the purchase conditions they are exposed to in retail 
markets to a particular malfunctioning of the vertical supply chain or even less to the safe 
harbour created by the VBER.  

The aforementioned reasons explain the limited participation of consumers and consumer 
associations,  despite  the  Commission  having  actively  reached  out  to  many  of  them  to 
solicit  their  participation  notably  in  the  workshop,  and  why  it  did  not  have  any 
meaningful impact on the results of the evaluation.  

5.  ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS 

This section presents the assessment of the VBER, together with the Vertical Guidelines, 
based on the five evaluation criteria (effectiveness, efficiency, relevance, coherence and 
EU added value). 

This  section  is  structured  as  follows:  Section  5.1  describes  the  main  market 
developments that occurred during the period under evaluation. Section 5.2 answers the 
evaluation questions set out in section 3 above for the VBER, together with the Vertical 

29 

 
Guidelines, as a whole. Section 5.3 sets out the areas for which the evaluation has shown 
that  the  VBER,  together  with  the  Vertical  Guidelines,  is  not  functioning  well  or  not 
functioning as well as it could, including the underlying reasons. 

5.1.  Market developments since the adoption of the VBER 

Since  the  adoption  of  the  VBER,  together  with  the  Vertical  Guidelines,  in  2010,  there 
have  been  a  number  of  market  developments  affecting  the  supply  and  distribution  of 
goods and services, which are in particular linked to the increasing digitalisation of  the 
economy.  

The Digital Single Market strategy adopted in 2015 recognised that the global economy 
was  rapidly  becoming  more  digitalised  and  outlined  several  key  actions  under  three 
pillars, by means of which the Commission envisaged to create a Digital Single Market.76 
One  of  these  pillars  related  to  ensuring  better  access  for  consumers  and  businesses  to 
goods and services via e-commerce across the EU. In addition to a number of legislative 
initiatives  under  this  pillar,  the  Commission  decided  to  launch  a  sector  inquiry  in  May 
2015 into e-commerce in consumer goods and digital content in the EU. The e-commerce 
sector inquiry allowed the Commission to obtain an overview of market trends and gather 
evidence  on  barriers  to  competition  in  e-commerce.  It  also  allowed  the  Commission  to 
understand the prevalence of certain business practices and their rationale, and ultimately 
to  identify  priorities  for  enforcing  the  EU  competition  rules.  The  results  of  the  e-
commerce sector inquiry, which cover the period from 2005 to 2015, are summarised in 
section 5.1.1 below. 

As  part  of  the  evaluation  of  the  VBER,  together  with  the  Vertical  Guidelines,  the 
Commission  commissioned  an  evaluation  study  in  order  to,  among  other  things, 
understand how markets have evolved since the e-commerce sector inquiry, as well as to 
cover other sectors and offline trade, thus complementing the findings of the e-commerce 
sector  inquiry.  The  relevant  results  of  the  evaluation  study  are  summarised  in  section 
5.1.2 below. 

In addition, and in part as a follow-up to the e-commerce sector inquiry, the Commission 
took enforcement action against a number of anti-competitive vertical agreements, with a 
particular focus on business practices that have evolved or become widespread as a result 
of  increased  e-commerce  during  the  last  decade.  An  overview  of  relevant  cases  is 
provided in section 5.1.3 below. 

Enforcement action against vertical restrictions was also taken at national level. Between 
1  June  2010  and  1  January  2020,  NCAs  reported  391  cases  concerning  vertical 
agreements. Moreover, six NCAs also issued guidance related to vertical restrictions. An 
overview of national cases and policy initiatives is provided in section 5.1.4 below. 

76   Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, "A Digital Single Market Strategy 
for Europe", COM(2015) 192 final. 

30 

 
                                                           
It should also be noted that during the last years there have been increasing discussions 
about the compatibility of sustainability agreements with Article 101 of the Treaty. Given 
that no specific issue in relation to sustainability agreements in the vertical supply chain 
was  identified  during  the  evaluation,  this  development  is  not  reflected  in  the  Staff 
Working Document. However, in line with the objectives of the European Green Deal,77 
which is one of the priorities for this Commission mandate and which aims to make the 
EU's  economy  sustainable  by  turning  climate  and  environmental  challenges  into 
opportunities across all policy areas, any related issues may be taken into account when 
considering next steps.  

5.1.1.  The main findings of the e-commerce sector inquiry 

The  final  report  of  the  e-commerce  sector  inquiry  was  published  in  May  2017.78 The 
results of the sector inquiry, which cover the period from 2005 to 2015, confirmed that 
the  growth  of  e-commerce  over  the  preceding  decade  and  in  particular  the  increase  in 
price transparency and thus price competition with regard to consumer goods sold in an 
online  environment  had  a  significant  impact  on  businesses’  distribution  strategies  and 
consumer behaviour.  

First,  price  transparency  increased  with  online  trade,  since  consumers  are  able  to 
instantaneously obtain and compare product and price information online and to switch 
swiftly  from  one  channel  to  another  (i.e.  from  online  to  offline  and  vice  versa).  While 
this  allows  consumers  to  find  the  best  deal,  it  may  also  result  in  free-riding  behaviour, 
since  consumers  can  use  pre-sale  services  provided  by  brick-and-mortar  shops  before 
purchasing  the  product  online  (i.e.  free-riding  on  offline  services  that  are  not  provided 
online) or search for and compare products online before purchasing in brick-and-mortar 
shops (i.e. free-riding on online services that are not provided offline). 

Second,  the  ability  to  compare  the  prices  of  goods  and  services  across  online  retailers 
leads to increased price competition affecting both online and offline sales. While such 
increased  price  competition  has  beneficial  effects  for  consumers,  it  may  affect 
competition on parameters other than price, such as quality, brand and innovation. 

Third, increased price transparency allows businesses to monitor more easily the prices at 
which  their  goods  or  services  are  distributed  and  the  prices  of  competitors.  Due  to  the 
increasing availability of automated pricing software, detecting low-price offers takes a 
matter  of  seconds  and  manufacturers  are  increasingly  able  to  monitor  and  influence 

77   See https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en. The "Farm to Fork 
Strategy" is one of the actions launched by the  Commission in order to achieve the objectives of the 
European  Green  Deal 
see: 
https://ec.europa.eu/food/farm2fork_en#:~:text=The%20Farm%20to%20Fork%20Strategy%20is%20at
%20the%20heart%20of,%2C%20healthy%20and%20environmentally%2Dfriendly.&text=The%20Far
m%20to%20Fork%20Strategy%20aims%20to%20accelerate%20our%20transition,neutral%20or%20p
ositive%20environmental%20impact. 

information, 

agriculture 

further 

sector. 

For 

the 

in 

78   For further background, see section 4.1.6 above.  

31 

 
                                                           
retailers’ price setting. The availability of real-time pricing information may also lead to 
automated price coordination.  

Fourth, alternative online distribution models such as online marketplaces have made it 
easier  for  retailers  to  access  customers.  By  using  these  third-party  platforms,  small 
retailers may, with limited investments and effort, become visible to potential customers 
and  sell  products  to  a  large  customer  base  and  in  multiple  Member  States.  This  may 
however clash with  the  distribution and brand strategies of manufacturers, in  particular 
where  they  perceive  sales  through  online  marketplaces  as  potentially  harmful  for  their 
business (e.g. because they consider that the image of their brand is not protected or the 
level of service is not sufficient). 

These  market  developments  have  significantly  affected  the  distribution  and  pricing 
strategies of both manufacturers and retailers. As a reaction to notably the increased price 
transparency and price competition, manufacturers have sought greater control over their 
distribution  networks,  with  a  view  to  better  controlling  price  and  quality.  To  that  end, 
manufacturers have started implementing in particular the following strategies: 

  A  large  proportion  of  manufacturers  have  started  to  sell  their  products  directly  to 
consumers  through  their  own  online  retail  shops,  thereby  competing  increasingly 
with their distributors. 

  Manufacturers  have  made  increasing  use  of  selective  distribution  systems,  under 
which  products  and  services  can  only  be  sold  by  pre-selected  and  explicitly 
authorised  resellers,  thus  allowing  manufacturers  to  better  control  their  distribution 
networks, in particular in terms of the quality of distribution but also price.  

  Manufacturers have made increasing use of contractual restrictions to  better control 
the  distribution  of  goods.  Depending  on  the  manufacturer’s  business  model  and 
strategy,  such  restrictions  may  take  various  forms  such  as  pricing  restrictions, 
marketplace (platform) bans, restrictions on the use of price comparison tools and the 
exclusion of pure online players from distribution networks. 

As  regards  digital  content,  the  results  of  the  e-commerce  sector  inquiry  indicated  that 
online  transmission  (i.e.  the  possibility  for  consumers  to  access  digital  content  online) 
has changed the way in which digital content is accessed and consumed. The results also 
confirmed that the availability of licences from content copyright holders is essential for 
digital  content  providers  and  a  key  factor  determining  the  level  of  competition  in  the 
market.  The  results  also  pointed  to  certain  licensing  practices  that  may  make  it  more 
difficult for new online business models and services to emerge. One of the key findings 
of  the  e-commerce  sector  inquiry  in  this  regard  was  that  almost  60%  of digital  content 
providers who participated in the inquiry contractually agreed with right holders to geo-
block access  to  their content, thus  preventing consumers from  accessing digital  content 
available online in other EU Member States. 

32 

 
5.1.2.  The main findings of the evaluation study 

The  evaluation  study  aimed,  among  other  things,  to  complement  the  findings  of  the        
e-commerce sector inquiry  and  gather  relevant  information  for other sectors, given that 
the  VBER,  together  with  the  Vertical  Guidelines,  applies  not  only  to  online  sales  of 
consumer  goods  and  digital  content,  but  also  to  supply  and  distribution  agreements  in 
other  areas  of  the  economy,  both  online  and  offline.  For  that  purpose,  the  evaluation 
study  included  a  survey  on  the  evolution  of  distribution  models  for  various  goods  and 
services  over  the  last  ten  years,  complemented  by  three  case  studies  about  business 
models of online platforms. In addition, it included a survey of the purchasing behaviour 
of  European  consumers  to  gather  information  about  consumer  behaviour  across  the 
different stages of the consumer purchasing journey and notably how consumers interact 
with  different  sales channels,  as well as the  relative importance of these  sales channels 
and  possible  free-riding  issues  between  offline  and  online  channels,  different  offline 
channels or different online channels. 

First, the findings of the evaluation study show that, since the adoption of the VBER and 
the Vertical Guidelines, the development with the biggest impact on distribution models 
was the growth of online sales and online marketplaces. In fact, online purchasing is 
increasingly popular among consumers for a wide range of products. Overall, as depicted 
in  Figure  2,  the  share  of  individuals  purchasing  online  has  increased  by  100%  since 
2008.79  

FIGURE 2 : SHARE OF INDIVIDUALS PURCHASING ONLINE IN THE LAST 3 MONTHS – EU 28. 

SOURCE : EVALUATION STUDY ANNEX IX 

In most of the sectors under analysis, consumers can now purchase the desired products 
and  services  through  a  variety  of  different  channels  such  as  offline  and  online  shops, 
marketplaces and other online platforms. As reported in the evaluation study, for the four 

79   See section 4.3.1 of the evaluation study. 

33 

 
 
                                                           
categories of products selected for the survey of consumer purchasing behaviour, search 
engines,  online  marketplaces,  and  price  comparison  tools  are  particularly  important  for 
consumers who purchase online. At least one of these three channels was used by 35% of 
all  consumers  and  59%  of  the  consumers  who  purchased  online  for  cosmetics  and  hair 
care,  by  39%  of  all  consumers  and  53%  of  the  consumers  who  purchased  online  for 
clothing and shoes, by 60% of all consumers and 84% of the consumers who purchased 
online  for  house  and  garden  equipment  and  by  68%  of  all  consumers  and  80%  of  the 
consumers  who  purchased  online  for  consumer  electronics  and  large  electrical 
appliances. 

FIGURE 3 : USE OF SEARCH ENGINES, ONLINE MARKETPLACES, AND PRICE COMPARISON TOOLS 
THROUGHOUT THE CUSTOMER JOURNEY – COSMETICS AND HAIR CARE 

SOURCE: EVALUATION STUDY, TABLE 3-37 

FIGURE 4 : USE OF SEARCH ENGINES, ONLINE MARKETPLACES, AND PRICE COMPARISON TOOLS 
THROUGHOUT THE CUSTOMER JOURNEY – CLOTHING AND SHOES 

SOURCE: EVALUATION STUDY, TABLE 3-38 

34 

 
 
 
 
 
FIGURE 5 : USE OF SEARCH ENGINES, ONLINE MARKETPLACES, AND PRICE COMPARISON TOOLS 
THROUGHOUT THE CUSTOMER JOURNEY – HOUSE AND GARDEN EQUIPMENT 

SOURCE: EVALUATION STUDY, TABLE 3-39 

FIGURE 6 : USE OF SEARCH ENGINES, ONLINE MARKETPLACES, AND PRICE COMPARISON TOOLS 
THROUGHOUT THE CUSTOMER JOURNEY – CONSUMER ELECTRONICS AND LARGE ELECTRICAL     
APPLIANCES 

SOURCE: EVALUATION STUDY, TABLE 3-40 

The more complex the purchase, the greater appears to be the importance of these online 
channels. For purchases of cosmetics and hair care products or clothing items and shoes, 
the  percentage  of  those  who  use  the  services  offered  by  search  engines,  online 
marketplaces,  and  price  comparison  tools,  including  to  obtain  information  on  the  best 
price, is lower than for purchases of house and garden equipment or consumer electronics 
and  large  electrical  appliances.80 The  survey  also  found  that  while  the  price  still  has  a 

80   See section 3.3.7 of the study on consumer purchasing behaviour in Europe. Consumers who purchased 
cosmetics  and  hair  care  products  and  checked  for  the  best  price  most  notably  tended  to  use  search 
engines (26%), online marketplaces (18%), or price comparison apps or websites (18%). Also, online 
and offline stores of retailers selling multiple bands are used by at least 15% and 14% of the consumers, 
respectively. Consumers who purchased clothing items and shoes and checked for the best price most 
notably tended to use search engines (25%) or online marketplaces (22%). Physical (brick-and-mortar) 
stores of retailers selling multiple brands were less widely mentioned by consumers as a channel used 
to  check  for  the  best  prices,  compared  to  consumers  who  bought  cosmetics  and  hair  care  products. 
Consumers  who  purchased  house  and  garden  equipment  and  checked  for  the  best  price  most  notably 
tended to use search engines (34%), online marketplaces (25%), or price comparison apps or websites 

35 

 
 
 
                                                           
 
strong  impact  on  consumer  decisions  regardless  of  the  product  purchased,  consumers 
also  gather  other  types  of  information  that  are  incorporated  into  the  decision-making 
process (e.g. product information, brand and retailer information).81 

The  evaluation  study  also  found  that  today’s  consumer  journey  is  a  fluid  omni-
channel  process  whereby  consumers  change  easily  (i)  within  the  online  channel 
(i.e. between  online  retailers  and  online  platforms),  (ii)  between  online  and  brick-and-
mortar  distributors,  (iii)  within  the  brick-and-mortar  channel  (i.e.  between  offline 
retailers) and (iv) between mono-brand and multi-brand retailers. Within such a context, 
consumers  expect  to  have  a  continuous  omni-channel  experience.  In  response  to  this 
changing  consumer  behaviour  and  in  order  to  meet  consumer  expectations,  businesses 
seek to create a seamless omni-channel environment for consumers.82 

As regards online marketplaces, the findings of the evaluation study show that platform 
business  models  appear  to  be  evolving  over  time.  Overall,  businesses  pursue  different 
diversification  strategies,  with  the  aim  of  redistributing  risks  and  achieving  positive 
economies of scale and synergies. Today, many platforms take on a dual role, acting as 
both an intermediary service provider and a retailer. For instance, Amazon and Zalando 
do  not  only  grant  third-party  sellers  access  to  their  platforms  by  offering  intermediary 
services  in  exchange  for  a  commission,  but  also  act  as  retailers  selling  products  they 
source from suppliers, manufacturers or brands at wholesale level on the same platform 
in competition with the third-party sellers that use their platform. The selection of third-
party  sellers  that  will  be  permitted  access  can  vary  greatly  depending  on  the  way  the 
platform  is  organised.  For  instance,  in  some  marketplaces  sellers  (even  those  selling 
competing  products)  are  admitted  as  long  as  they  satisfy  certain  general  conditions.  In 
other  marketplaces,  it  is  more  likely  that  platforms  will  select  sellers  whose  products 
complement the existing basket of products available on the platform. Also platforms that 
only provide services follow the trend of diversifying their business model. For example, 
Uber is expanding its business model from offering rides for individuals and companies 
to  also  offering  services  such  as  food  delivery  or  the  rental  of  new  means  of  mobility 
(such  as  eBikes).  All  these  business  models  involve  an  increase  in  the  number  of 
contractual relationships, including an increased use of vertical agreements. 

Second, the evaluation study also confirmed the increased use of selective distribution 
systems  during  the  last  ten  years,  which  is  in  line  with  the  results  of  the  e-commerce 
sector  inquiry.  Selective  distribution  agreements  are  among  the  most  common  vertical 
agreements  that  can  be  found  in  the  Member  States  analysed  in  the  evaluation  study. 
According to the interviewed manufacturers and retailers, this type of distribution model 

(29%).  Review  pages  also  seem  to  play  a  role  for  this  product  category.  Consumers  who  purchased 
consumer electronics and large electrical appliances and checked for the best price most notably tended 
to use search engines (36%), online marketplaces (30%), or price comparison apps or websites (29%). 
Review pages also seem to play a role for this product category. 

81   See section 3.3.9 of the study on consumer purchasing behaviour in Europe. 
82   See section 4.3.1 of the study on consumer purchasing behaviour in Europe. 

36 

 
                                                                                                                                                                            
 
is  quite  common  in  all  countries  and  across  a  wide  range  of  sectors,  but  it  is  most 
prevalent  in  the  clothing,  sporting  goods,  luxury  goods,  household  appliances  and 
cosmetics industries.  

The  economic  literature  identifies  a  number  of  possible  pro-competitive  effects  of 
selective distribution systems.  In particular, such systems  may help  addressing possible 
free-rider  problems  by  encouraging  retailers 
to  provide  valued  sales  services, 
incentivising  them  to  maintain  and  support  the  brand  image,  supporting  the  launch  of 
new products and protecting them in making relationship-specific investments. However, 
they  may  also  lead  to  anti-competitive  effects  such  as  facilitating  collusion  at  supplier 
level  and preventing specific retailers from offering certain  products  (i.e.  foreclosure at 
retailer  level).  The  actual  effects  of  selective  distribution  systems  on  consumer  welfare 
depend on the specific market circumstances. According to the companies interviewed in 
the  context  of  the  evaluation  study,  the  most  common  motivations  behind  the 
implementation of selective distribution networks are to protect the brand image and to 
offer a better customer experience. 

The features of selective distribution systems (i.e. the selection criteria and requirements 
imposed on authorised distributors), however, do not  seem  to  have changed much over 
the  last  ten  years.  The  only  notable  change  concerns  the  increasing  use  of  criteria 
regarding  online  sales,  which  are  seen  by  stakeholders  as  nothing  more  than  the 
adaptation of the existing brick-and-mortar criteria to an e-commerce context. This is due 
to the growth of e-commerce in the sectors where selective distribution is more prevalent, 
which confirms the findings of the e-commerce sector inquiry. 

According to the companies interviewed in the context of the evaluation study, selective 
distribution  is  most  often  based  on  qualitative  criteria.  That  said,  quantitative  criteria, 
used in combination with qualitative criteria, are also quite prevalent. Among the criteria 
reported,  manufacturers  most  often  require  pre-sale  and  post-sales  advice  to  the 
customer, product-specific training and the obligation for the retailer to buy a minimum 
number  of  units  of  the  contract  product(s).  The  requirement  to  have  at  least  one  brick-
and-mortar  store  is  also  commonly  found,  as  well  as  the  need  to  comply  with  quality 
requirements for online sales. In contrast, retailers reported that the requirement to have 
at  least  one  brick-and-mortar  store  is  the  most  common  obligation,  followed  by  the 
requirement to offer pre-sale and post-sales advice to the customer and the obligation for 
the retailer to buy a minimum number of units of the contract product(s). 

As  regards  the  objectivity  and  transparency  of  the  criteria  for  joining  a  selective 
distribution network, the evaluation study shows that these seem to vary according to the 
strategy of the individual  supplier. The selection criteria  can be either displayed on the 
supplier’s  website  or  shared  upon  request,  or  they  may  not  be  shared  at  all.  Retailers 
across  industries  often  have  imperfect  knowledge  of  the  criteria  on  the  basis  of  which 
they are selected or rejected as an authorised distributor. 

As  regards  the  use  of  specific  vertical  restrictions  relating  to  online  sales  in  selective 
distribution  systems,  the  evaluation  study  shows  that,  due  to  the  expectation  of 
consumers to have a seamless omni-channel experience, suppliers usually set criteria that 
must be used in all (online and offline) distribution channels. Manufacturers often require 

37 

 
that  all  marketing  materials  used  by  their  retailers  have  to  be  either  provided  or  pre-
approved  by  them.  Often,  qualitative  requirements  for  advertising  pursue  the  same 
objectives as other requirements relating to  the sale of branded products. This includes, 
according  to  stakeholders,  the  need  to  maintain  for  instance  the  luxury  and/or  quality 
image  of  the  advertised  products  and  requirements  on  the  environment  in  which  those 
products are advertised. Nevertheless, the evaluation study found that in the majority of 
cases, retailers and wholesalers were not subject to any online sales restrictions (such as 
restrictions on sales through marketplaces or restrictions on the use of price comparison 
websites).  The  evaluation  study  however  also  found  that  the  VBER,  together  with  the 
Vertical Guidelines, does not provide sufficient clarity on the assessment of these types 
of restrictions, which have become more prevalent over time. 

Third, the findings of the evaluation study show that the e-commerce growth also had 
an  impact  on  exclusive  distribution  networks.  Whereas  previously  territorial 
exclusivity was fairly straightforward in its application, nowadays e-commerce makes it 
easier  for  buyers  to  reach  sellers  outside  their  territory  (and  vice-versa).  This 
development  has  increased  the  relevance  of  the  distinction  between  active  and  passive 
sales,  with  only  restrictions  on  the  latter  being  prohibited  in  the  context  of  exclusive 
distribution  under  the  current  rules.  This  is  because  the  competitive  pressure  resulting 
from  passive  sales  by  distributors  and  retailers  located  in  other  territories  increases  the 
need  perceived  by  suppliers  to  be  able  to  restrict  such  passive  sales,  in  addition  to  the 
currently  (and  only  partially)  allowed  restriction  of  active  sales.  The  evaluation  study 
therefore indicated that distribution models which rely on territorial sales restrictions are 
becoming  less  viable.  As  a  result,  suppliers  seem  to  be  moving  away  from  exclusive 
distribution models, at least at retail level, and shifting towards other distribution models 
such  as  selective  distribution.  Nevertheless,  exclusive  distribution  models  remain 
relevant  in  certain  sectors  (like  specialised  electronics  (e.g.  medical  lab  equipment), 
industrial machinery, or frozen products) and at wholesale level. 

Fourth,  the  evaluation  study  also  analysed  retail  parity  clauses.  Although  the  study  did 
not target a specific sector, its findings focus on the hotel industry, as this was the main 
sector  that  participated  in  the  relevant  interviews.  The  findings  of  the  evaluation  study 
show  that  distribution  models  in  the  hotel  industry  have  changed  radically  since  2009, 
when  online  travel  agencies  (“OTAs”)  started  to  play  a  major  role  in  the  market. 
Stakeholders thus  reported that it has become a necessary  condition  for all hotels  to  be 
visible on these OTAs. The findings of the evaluation study also show that retail parity 
clauses are common in the agreements between OTAs and hotels. Evidence gathered 
from the stakeholder interviews suggests that these clauses are more frequently applied in 
the hospitality sector and in mass markets (i.e. goods produced in large quantities that do 
not have the features of luxury products). 

According  to  the  evidence  gathered  in  the  evaluation  study,  retail  price  parity  clauses 
may be requested by retailers to avoid continuous price negotiations with manufacturers 
and maintain a competitive price for the products concerned. This seems to be the case in 
the  mass  market  segment.  Retail  price  parity  clauses  may  also  be  imposed  by  the 
platform itself, as is the case in the hotel industry. In this context, the study pointed out 
that  platforms  such  as  OTAs  aggregate  a  large  amount  of  data  and  provide  customers 

38 

 
with information, which would be otherwise difficult for these customers to obtain when 
making  purchasing  decisions.  At  the  same  time,  the  market  power  of  sellers  in  such  a 
context is strongly reduced. 

Fifth,  the  evaluation  study  also  included  a  study  of  the  consumer  purchasing 
behaviour  in  Europe. The study traced  customer journeys for  four product  categories, 
namely  (i) consumer  electronics  and  large  electrical  appliances,  (ii) house  and  garden 
equipment, (iii) clothing and shoes, as well as (iv) cosmetics and hair care, in an online 
survey  covering  six  EU  Member  States  (i.e.  France,  Germany,  Hungary,  Italy,  Poland, 
and  Sweden).  To  complement  the  survey,  the  study  included a  literature  review,  an 
analysis  of  Google  Trends  data  for  each  product  category  and  an  analysis  of 
into  consumer  purchasing 
GlobalWebIndex  data  providing 
behaviour. 

time-series 

insights 

The study confirmed that over the last years, the number of different distribution or sales 
channels used by suppliers to promote their products to a wide range of consumers has 
increased,  leading  to  a  more  prevalent  multi-channel  sales  approach.  According  to  the 
literature,  this  multi-channel  sales  approach  has  a  positive  effect  since  it  satisfies 
consumers’  shopping  needs  better,  as  they  can  choose  the  channels  that  are  most 
convenient for them and best fit their needs. Also retailers and manufacturers can benefit 
from  the fragmentation of sales channels.  By using several  sales channels, retailers can 
distribute their costs more effectively than by focussing on just one sales channel and at 
the  same  time  increase  sales.  Despite  the  positive  effects  of  such  a  multi-channel 
environment, there is however much discussion about free-riding in this context, which 
can be a negative consequence of today's multi-channel sales environment. 

Nowadays,  consumers  tend  to  make  complementary  use  of  several  online  as  well  as 
offline sales and information channels during the entire purchasing process, which can be 
divided into three main stages: inspiration, information and evaluation, and purchase. In 
the  first  and  second  phase,  the  consumer  will  recognise  a  need,  get  inspired  and 
eventually narrow down the choice of purchase by searching for information about price, 
physical  attributes  and  availability.  In  the  purchase  phase,  the  consumer  ultimately 
selects  the  preferred  brand  and  retailer,  and  finalises  the  buying  process.  How  exactly 
consumers  behave  in  the  purchasing  process  can  depend  on  a  variety  of  factors.  These 
include (but are not limited to) the following factors: product characteristics, frequency 
of purchase, consumer involvement, order value (price), type of consumer (consumer of 
brand or retail primacy kind), socio-demographic characteristics, or personal preferences. 

The findings of the survey did not only show that consumers who bought different types 
of  products  behaved  differently,  but  also  that  the  behaviour  of  individual  groups  of 
consumers  who  bought  the  same  product  varied  considerably.  For  instance,  the  survey 
found that consumers tended to spend more effort and were more highly involved in the 
product and purchasing process when they were about to spend more money. The same 
applies to less frequent purchases. For consumers who bought consumer electronics and 
large electrical appliances, this included considering a wider range of information in the 
decision-making process and consulting a greater number of different types of channels 
to  obtain  the  relevant  information.  Consumers  who  bought  a  clothing  item,  shoes, 

39 

 
cosmetics  or  hair  care  products  spent  less  on  their  products,  were  particularly  less 
involved,  and  indicated  a  lower  number  of  channels  used  to  find  information.  Even 
among consumers who bought the same type of product, the study repeatedly found that 
those  consumers  who  paid  the  least  for  their  product,  or  who  have  been  less  involved, 
were more likely to invest less effort in the buying process.  

Regardless  of  the  type  of  product  purchased,  the  survey  found  that  most  consumers 
gathered  price  or  product  information.  A  slightly  smaller  percentage  of  consumers 
gathered information about retail outlet services or the brand. The differences in shares of 
consumers  gathering  price  information,  product  information,  brand  information,  or 
information about retail outlet services were only minor, which leads to the assumption 
that  all  these  types  of  information  were  decisive  in  the  purchasing  process.  This 
assumption is confirmed by other studies analysed in the literature review. For example, 
recent  studies  found  that  although  price  has  a  significant  influence  on  the  purchase 
channel ultimately used, product quality, delivery times, information and support are just 
as important in the decision-making process. Nevertheless, the results of the survey also 
show  that  checking  for  the  best  price  was  particularly  common  for  very  expensive 
products like those purchased from the categories house and garden equipment as well as 
consumer  electronics  and  large  electrical  appliances.  The  survey  also  analysed  the 
reasons  for  which  consumers  chose  a  specific  retail  outlet  or  brand.  The  brand  was 
chosen mainly for the quality of its products or for the combination of price and quality. 
In general, a majority of consumers in the individual product groups tended to cite price 
as  the  reason  for  their  choice  of  retailer.  However,  at  the  same  time,  70-77%  of  the 
consumers who bought products in the respective product groups did not consider price 
to be a decisive criterion for selecting the retail outlet, or at least not the only criterion. 

The  survey  found  that  online  channels  play  a  major  role  in  the  information  and 
evaluation  phase, regardless  of the product  category.  Internet  websites and applications 
were  among  the  most  widely  used.  The  usage  pattern  of  specific  internet  websites  and 
applications varied depending on the products that consumers purchased. The results of 
the  secondary  data  showed  that  consumers  integrate  online  marketplaces,  price 
comparison tools and search engines strongly into the purchasing process. The share of 
individuals using these services has increased steadily over the years. Furthermore, social 
media, messaging services and voice assistants gradually start to play a role in consumer 
purchasing  journeys  as  well.  Also  mobile  devices  play  an  important  role  in  the 
purchasing  process  nowadays.  In  recent  years,  the  proportion  of  consumers  making 
purchases via their mobile devices has increased, while the share of consumers making 
purchases via personal computers and laptops has decreased.  

According  to  data  provided  by  GlobalWebIndex,83 the  most  used  channel  for  today’s 
brands  and  product  discovery  (see  Figure  7)  and  for  gathering  information  on  brands, 
products and services (see Figure 8) are search engines, as shown below.  

83   For more details on this data, see section 3.7 of the study on consumer purchasing behaviour in Europe. 

40 

 
                                                           
FIGURE 7 : SOURCES OF BRAND AND PRODUCT DISCOVERY – EU MEMBER STATES AND UNITED 
KINGDOM (IN %) 

SOURCE: EVALUATION STUDY, FIGURE 3-147 

p 

41 

 
FIGURE 8 : SOURCES USED TO ACTIVELY LOOK FOR INFORMATION ON BRANDS, PRODUCTS, AND 
SERVICES – EU 27 AND UNITED KINGDOM (IN %) 

SOURCE: EVALUATION STUDY, FIGURE 3-148 

The keywords used when searching with search engines also give an indication of which 
information  is  important  to  consumers.  According  to  the  study  results,  consumers 
predominantly  used  keywords  containing  product  names,  brand  names  or  product-
specific keywords. The analysis of Google Trend data yielded similar results. For several 
years now, consumers have been using more product-specific search queries compared to 
brand or retail related searches for almost all types of products considered. 

As regards possible free-riding concerns, the survey results show that a large proportion 
of  consumers  use  online  and  offline  channels  in  combination,  constantly  changing 
between both types of channels. Furthermore, the study shows that there is a high share 
of  consumers  who  use  the  same  type  of  channel  (online  or  offline)  for  completing  the 
transaction which they used in the pre-purchase phase. 

The use of different channels across the customer journey could  give rise to free-riding 
behaviour. The study finds in this regard that among all purchases and product categories 
under consideration, free-riding between online and offline channels is only relevant for 
about 2-15% of all consumers/purchases, depending on the product. Free-riding between 
different  types of online channels  is  relevant to  an even lesser extent, with  1-9% of  all 
purchases  affected,  depending  on  the  product.  In  contrast,  there  is  a  slightly  higher 

42 

 
 
potential  for  free-riding  within  the  same  type  of  online  channel,  with  3-25%  of  all 
purchases affected, again depending on the product. These figures suggest that the level 
of free-riding is modest between online and offline channels, while being slightly more 
important across and within online channels.  

It  should  be  noted  that  these  figures  are  approximations  based  on  the  percentage  of 
consumers or purchases that could be affected by free-riding activities of distributors. For 
this  purpose,  the  consumer  survey  identified  specific  behaviour  that  is  consistent  with 
free-riding  by  calculating  the  share  of  purchases  for  which  consumers  gathered 
information  via  one  channel  but  purchased  from  a  completely  different  channel, 
primarily  because  of  the  lower  price.  The  consumer  survey  was,  however,  not  able  to 
determine whether consumers acted in this way intentionally or whether it was a natural 
result of the purchasing process, and whether the specific services chosen by consumers 
actually  provided  different  levels  of  information  or  service.  Finally,  it  should  be 
highlighted that a consumer survey cannot offer insights about the actual impact of free-
riding behaviour on suppliers and the incentives to invest of affected distributors.84   

5.1.3.  The Commission’s enforcement action regarding vertical restrictions 

In  part  as  a  follow-up  to  the  e-commerce  sector  inquiry,  the  Commission  took 
enforcement  action  against  a  number  of  anti-competitive  vertical  agreements,  with  a 
particular focus on business practices that have evolved or become widespread as a result 
of increasing e-commerce during the last decade.  

The  relevant  prohibition  decisions,  which  are  briefly  summarised  below,  provide 
examples  of  vertical  restrictions  imposed  by  suppliers  with  a  view  to  reducing  the 
competitive pressure from online sales (e.g. consumer electronics cases and Guess) and 
artificially  segmenting  markets  to  the  detriment  of  consumers  (e.g.  Pioneer,  Guess, 
licensed  merchandise  cases  and  Meliá).  Moreover,  the  Guess  case  is  illustrative  of  the 
increasing  trend  towards  vertical  integration  on  the  supply  side,  which  already  figured 
among the findings of the Commission’s e-commerce sector inquiry. The resulting direct 
competition with their distributors provides suppliers with incentives to limit competition 
at  retail  level,  notably  in  the  context  of  a  selective  distribution,  e.g.  by  restricting 
authorised distributors from advertising and selling the contract products online in order 
to  provide  their  own  direct  online  sales  channel  with  a  distribution  advantage.  In 
the  growing  e-commerce 
addition, 
environment  allows  manufacturers  to  easily  monitor  prices  and  to  swiftly  intervene  to 
dampen  price  pressure.  They  also  illustrate  how  a  targeted  intervention  by  the  supplier 
against a few (low-price) benchmark retailers can be sufficient to achieve a re-alignment 
of the overall online prices for the respective products across the market due to the online 
retailers’ use of pricing  software (based on  algorithms).  It  is  also  worth  noting that the 
use of resale price maintenance by the manufacturers in these cases did  not seem to be 
driven by concerns about a suboptimal level of service provision, but rather by the desire 

the  consumer  electronics  cases  show  how 

84   See section 4 of the study on consumer purchasing behaviour in Europe, p. 264. 

43 

 
                                                           
to  correct  the  price  level  for  the  products  concerned  without  any  service  enhancing 
considerations.  

On 24 July 2018, the Commission fined consumer electronics manufacturers Pioneer, 
Denon  &  Marantz,  Philips  and  Asus for  imposing fixed  or  minimum  resale  prices 
on  online  retailers  for  widely  used  consumer  electronics  products  such  as  kitchen 
appliances,  notebooks  and  hi-fi  products. 85  The  four  manufacturers 
intervened 
particularly against online retailers who offered their products at low prices. When those 
retailers  did  not  follow  the  prices  requested  by  manufacturers,  they  faced  threats  or 
sanctions  such  as  the  blocking  of  supplies.  The  investigations  showed  a  wide  use  by 
retailers  of  pricing  algorithms  that  automatically  adapt  their  retail  prices  to  those  of 
competitors, due to which the pricing restrictions imposed on low-pricing online retailers 
typically  had  a  broader  impact  on  overall  online  prices  for  the  respective  consumer 
electronics  products.  Moreover,  the  investigations  showed  that  the  use  of  sophisticated 
monitoring  tools  allowed  the  manufacturers  to  effectively  track  the  setting  of  resale 
prices  in  their  distribution  network  and  to  intervene  swiftly  in  case  of  price  decreases. 
The  price  interventions  limited  effective  price  competition  between  retailers  and  led  to 
higher prices with an immediate effect on consumers. 

On  17  December  2018,  the  Commission  fined  the  clothing  company  Guess  for 
restricting  retailers  in  its  selective  distribution  system  from  certain  online  selling 
and  advertising  activities  and  from  selling  cross-border  to  consumers  in  other 
Member States (so-called geo-blocking).86 The investigation showed the use by Guess 
of a number of restrictions that were directly related to the growth of e-commerce. More 
specifically, Guess restricted its authorised retailers chosen on the basis of quality criteria 
from (i) using the Guess brand names and trademarks for the purposes of online search 
advertising, (ii) selling online without a prior specific authorisation by Guess, for which 
the  company  had  full  discretion  and  which  was  not  based  on  any  specified  quality 
criteria,  (iii)  selling  to  consumers  located  outside  the  authorised  retailers’  allocated 
territories, 
retailers  and 
(v) determining  their  resale  prices  independently.  These  practices  allowed  Guess  to 
partition  European  markets  and  maintain  artificially  high  retail  prices,  in  particular  in 
Central and Eastern European countries, to the detriment of European consumers.  

(iv)  cross-selling  among  authorised  wholesalers  and 

In  2019  and  2020,  the  Commission  fined  Nike,87 Sanrio88 and  NBC  Universal89 for 
restricting  sales  of  licensed  merchandising  products  featuring  respectively  some  of 

85   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_18_4601.  A  non-confidential  version  of  the 
prohibition decisions is available on DG Competition's website. 

available 

18/4601, 

release 

2018, 

press 

July 

24 

IP 

of 

86   See  Commission  press 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_18_6844.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 

release  of  17  December  2018, 

IP  18/6844, 

available 

87   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_19_1828.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 

25  March 

available 

19/1828, 

release 

2019, 

press 

IP 

of 

44 

 
                                                           
Europe's best-known football clubs and federations for which Nike held a licence, Hello 
Kitty  or  other  characters  owned  by  Sanrio  and  the  Minions,  Jurassic  World  and  other 
images  and  characters  from  NBC  Universal's  films.  The  restrictions  used  by  the  three 
companies consisted in  particular of (i) direct  measures restricting out-of-territory sales 
by licensees (e.g. clauses explicitly prohibiting these sales and obligations to notify out-
of-territory  sales  to  the  licensor),  (ii)  direct  measures  restricting  online  sales  and, 
(iii) indirect measures  to implement or encourage compliance with the sales restrictions 
(e.g.  threatening  licensees  with  ending  their  contract  if  they  sold  out-of-territory  and 
carrying out audits). Nike and NBC Universal also used other restrictions such as (iv) an 
obligation on licensees to pass on the out-of-territory sales restrictions to their customers 
(both  Nike  and  NBC  Universal)  and  (v)  direct  measures  restricting  sales  beyond 
allocated customers or customer groups (NBC Universal). These practices partitioned the 
Single Market and prevented licensees in Europe from selling products cross-border and 
across customer groups, to the ultimate detriment of European consumers.  

On  21  February  2020,  the  Commission  fined  hotel  group  Meliá  for  discriminating 
between  customers  based  on  their  place  of  residence  in  its  hotel  accommodation 
agreements  with  tour  operators.90 Meliá’s  standard  terms  and  conditions  contained  a 
clause which provided that the contracts were only valid for reservations by consumers 
who were residents in specified countries. These agreements restricted the tour operators’ 
ability to sell hotel accommodation freely in all EEA countries and to respond to direct 
requests from consumers who were residents outside the defined countries (i.e. active and 
passive  sales  restrictions).  As  a  result,  consumers  were  not  able  to  see  the  full  hotel 
availability or book hotel rooms at the best prices with tour operators in  other Member 
States, thus depriving them of the possibility to shop around for more choice and lower 
prices, one of the core benefits of the Single Market. 

In  two  other  cases,  the  Commission  accepted  commitments  offered  by  companies  to 
address  the  preliminary  competition  concerns  raised  by  the  Commission  with  regard  to 
certain  distribution  practices.  The  Commission  decisions  adopted  in  these  two  cases 
rendered the commitments offered by the parties legally binding, but did not conclude on 
whether  the  practices  concerned  amounted  to  an  infringement  of  the  EU  competition 
rules.  These  cases  dealt  with  respectively  under  Article  102  and  101  of  the  Treaty 
concerned the following vertical restrictions:  

88   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_19_3950.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 

available 

19/3950, 

release 

2019, 

press 

July 

IP 

of 

9 

89   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_157.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 

available 

January 

20/157, 

release 

2020, 

press 

30 

IP 

of 

90   See  Commission 

at 
https://ec.europa.eu/competition/antitrust/cases/dec_docs/40528/40528_410_6.pdf.  A  non-confidential 
version of the prohibition decision is available on DG Competition's website. 

21  February 

available 

20/302, 

release 

2020, 

press 

IP 

of 

45 

 
                                                                                                                                                                            
 
The  commitment  decision  adopted  on  4  May  2017  against  Amazon  related  to  most 
favoured nation ("MFN") clauses in Amazon's distribution agreements with e-book 
publishers  in  Europe.91 These  clauses  required  publishers  to  offer  Amazon  terms  and 
conditions  which  were  similar  to  or  better  than  those  offered  to  Amazon’s  competitors 
and to inform Amazon about more favourable or alternative terms granted to Amazon's 
competitors.  The  clauses  covered  not  only  price,  but  also  other  parameters  that  a 
competitor  might  use  to  differentiate  itself  from  Amazon  such  as  alternative  business 
(distribution)  models,  innovative  e-books  or  promotions.  The  Commission  considered 
that such clauses could make it more difficult for other e-book platforms to compete with 
Amazon by reducing the ability and incentives of publishers and competing platforms to 
develop  new  and 
innovative  e-books  and  alternative  distribution  models.  The 
commitments  address  these  concerns  by  binding  Amazon  to  no  longer  enforce  or 
introduce these clauses in agreements with e-book publishers. 

The commitment decisions adopted on 26 July 2016 against the film studio Paramount92 
and  on  7  March  2019  against  the  broadcaster  Sky  UK  and  four  other  film  studios 
(Disney,  NBC  Universal,  Sony  and  Warner  Bros) 93  related  to  certain  contractual 
clauses  in  their  film  licensing  agreements  for  the  provision  of  pay-TV  services  in 
Europe. These clauses, which also interact with IPR, prevented Sky UK from allowing 
consumers  outside  the  territory  covered  by  its  licence  to  access  films  via  satellite  or 
online.  They  also  required  the  film  studios  to  ensure  that  other  broadcasters  were 
prevented  from  making  their  pay-TV  services  available  to  consumers  in  the  territory 
covered  by  Sky  UK's  licence.  The  Commission  considered  that  such  clauses  could 
restrict  the  ability  of  broadcasters  to  accept  unsolicited  requests  (i.e.  passive  sales)  for 
their  pay-TV  services  from  consumers  located  outside  their  licensed  territory,  thus 
eliminating cross-border competition  between pay-TV broadcasters and partitioning the 
Single Market along national borders. The commitments made binding on Sky UK and 
the  film  studios  to  address  these  concerns  foresee  that  they  will  neither  act  upon  nor 
enforce  these  clauses  in  existing  film  licensing  agreements  for  pay-TV  services  and 
refrain  from  (re)introducing such  clauses in  film  licensing  agreements for pay-TV  with 
any broadcaster in the EEA.  

The commitments decision against Paramount was appealed by Canal+, a French pay-TV 
broadcaster, at the beginning of 2017. In its judgment of 12 December 2018, the General 
Court dismissed the appeal in its entirety, confirming that the contractual clauses at stake 
constituted  passive  sales  restrictions  amounting  to  a  restriction  of  competition  by 

91   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_17_1223.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 

4  May 

available 

17/1223, 

release 

2017, 

press 

IP 

of 

92   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_16_2645.  A  non-confidential  version  of  the 
commitments decision is available on DG Competition's website. 

available 

16/2645, 

release 

2016, 

press 

July 

26 

IP 

of 

93   See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_19_1590.  A  non-confidential  version  of  the 
commitments decision is available on DG Competition's website. 

7  March 

available 

19/1590, 

release 

2019, 

press 

IP 

of 

46 

 
                                                           
object.94 Canal+ appealed the judgment to the Court of Justice where the case is currently 
pending.95 

5.1.4.  NCA enforcement and policy actions regarding vertical restrictions 

Between 1 June 2010 and 1 January 2020, NCAs were very active enforcers in the area 
of vertical agreements, with a total  of reported 391 cases. Out of these 391 cases, 257 
led  to  a  finding  by  the  responsible  NCA  or  the  competent  national  court.  The  reported 
reasons  for  not  pursuing  the  remaining  cases  were  mainly  insufficient  evidence  or  the 
removal  of  the  vertical  restrictions  by  the  parties  to  the  agreement  before  any  final 
decision by the NCA. Figure 9 provides a breakdown of these cases by NCA. 

FIGURE 9 : BREAKDOWN OF CASES IN THE AREA OF VERTICAL RESTRICTIONS BY NCA 

SOURCE: EVALUATION STUDY, TABLE 2, P. 39. 

94   Judgment  of  12  December  2018  in  Case  T-873/16,  ECLI:EU:T:2018:904,  Groupe  Canal+  v 

Commission. 

95   Case C-132/19 P, Groupe Canal+ v Commission. 

47 

 
 
                                                           
The  reported  cases  span  across  21  sectors.96 Out  of  the  391  reported  cases,  210  cases 
concerned  resale  price  maintenance,  which  was  thus  the  most  investigated  restriction 
during the period in question. Figure 10 provides a breakdown of NCA cases by the type 
of vertical restriction investigated. 

FIGURE 10 : BREAKDOWN BY TYPE OF VERTICAL RESTRICTION INVESTIGATED 

SOURCE: EVALUATION STUDY TABLE 3, P. 40 

In  addition,  several  NCAs  issued  policy  documents  with  regard  to  vertical 
restrictions  during  the  period  concerned.  In  the  context  of  the  evaluation  study,  six 
NCAs (i.e. AT, DE, SE, SK, NL and IE) reported that they had issued guidance in this 
area. 

In  2010,  the  Irish  NCA  issued  a  "Declaration  dealing  with  Vertical  Agreements  and 
Concerted Practices" in order to provide guidance to interested parties on how to assess 
their vertical agreements so as to ensure that they can avail themselves of the exemption 
provided for by the Declaration.97  

96   See evaluation study, Figures 3, 4, 5, 6 and 7 in Annex IV, p. 204-208. 
97   See 

https://www.ccpc.ie/business/enforcement/civil-competition-enforcement/declarations/vertical-

agreements-concerted-practices/.  

48 

 
 
                                                           
In July 2014, the Austrian NCA published guidance in order to provide information and 
foster the prevention of resale price restrictions, as well as to facilitate compliance with 
competition  law,  especially  for  SMEs. 98 The  guidance  deals  notably  with  resale  price 
maintenance  and  contains  a  code  of  conduct  for  suppliers  and  dealers  as  well  as  an 
orientation guide for SMEs with an illustrative list of behaviours that the Austrian NCA 
would generally consider as raising competition concerns from an antitrust perspective.  

In  2015,  the  Slovak  NCA  issued  guidance  on  vertical  agreements  in  order  to  increase 
legal  certainty  and  the  general  knowledge  of  the  rules  among  SMEs.  The  guidance 
follows the approach of the Commission’s Vertical Guidelines.99 

In 2016, the Swedish NCA issued an interactive guide in order to help companies self-
assess their vertical agreements, in line with the approach of the Commission’s Vertical 
Guidelines.100 

In 2017, the German NCA issued guidance with the aim of explaining to businesses, also 
with the help of practical examples, the background, purpose and scope of the prohibition 
of vertical price fixing in the brick-and-mortar food retail sector.101  

In 2019, the Dutch NCA issued Vertical Guidelines in order to explain how it assesses a 
number  of  common  arrangements  between  suppliers  and  buyers. 102  The  guidelines 
primarily  target  businesses,  trade  organisations  and  their  advisors  with  a  view  to 
facilitating the self-assessment of their vertical agreements with competition law, in line 
with the approach of the Commission’s Vertical Guidelines. The guidelines also contain 
an  example  of  an  online  advertising  restriction,  by  which  a  supplier  restricts  its 
distributors in their ability to advertise on online search engines.103 

5.2. Answers to the evaluation questions regarding the VBER, together with the 

Vertical Guidelines, as a whole  

This  section  answers  the  evaluation  questions  regarding  the  VBER,  together  with  the 
Vertical Guidelines, as a whole in relation to the evaluation criteria of effectiveness (see 

98   See 

https://www.bwb.gv.at/fileadmin/user_upload/PDFs/PDFs3/BWB_Standpoint_on_Resale_Price_Main
tenance_english.pdf.  

99   See https://www.antimon.gov.sk/data/files/422_cielove-vertikalne-dohody-pohlad-pmu-sr.pdf.  
100   See http://www.konkurrensverket.se/en/Competition/Aboutthecompetitionrules/Prohibitionagainstanti-
competitivecooperation/vertical-agreements/guidance-regarding-distribution-agreements/  and  more 
specifically, http://www.konkurrensverket.se/upload/Distribution-agreements/index.html .  

101   See 

https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Others/Guidance_note_prohibition_vert
ical_price_fixing_LEH.pdf?__blob=publicationFile&v=2.  

102   See 

https://www.acm.nl/sites/default/files/documents/2019-07/guidelines-regarding-arrangements-

between-suppliers-and-buyers.pdf.  

103   See  as  a  background,  the  working  paper  published  in  2019  "Price  effects  of  non-brand  bidding 
the  Dutch  hotel  sector",  https://www.acm.nl/sites/default/files/documents/2019-

agreements 
06/working-paper-acm-price-effects-of-search-advertisement-restrictions.pdf.  

in 

49 

 
                                                           
section  5.2.1  below),  efficiency  (see  section  5.2.2  below),  relevance  (see  section  5.2.3 
below),  coherence  (see  section  5.2.4  below)  and  EU  added  value  (see  section  5.2.5 
below). 

5.2.1.  Effectiveness 

Evaluation Question 1  –  What  is  the level  of legal  certainty that  the  VBER, together 
with the Vertical Guidelines, provides for assessing whether vertical agreements and/or 
specific  clauses/restrictions  are  exempted  from  the  application  of  Article  101  of  the 
Treaty and thus compliant with this provision? 

What is the issue? 

As  explained  in  more  detail  in  sections  1  and  2.3  above,  one  of  the  objectives  of  the 
VBER,  as  an  instrument  that  provides  a  safe  harbour  for  certain  categories  of  vertical 
agreements,  is  to  give  legal  certainty  to  stakeholders,  making  it  easier  for  them  to 
perform  the  self-assessment  required  by  the  wider  legal  framework.  The  Vertical 
Guidelines,  insofar  as  they  provide  additional  guidance  on  how  to  interpret  the  VBER 
and how to apply Article 101 of the Treaty to vertical agreements, also aim to give legal 
certainty to stakeholders in their assessment of vertical agreements. 

The assessment of this objective seeks to determine whether the rules provide increased 
legal certainty, as compared to a situation without them, but also whether there is room 
for  improvement  in  achieving  the  objective.  In  this  context,  it  should  be  taken  into 
account that the VBER  and the Vertical Guidelines cannot provide an absolute level of 
legal certainty. In order to provide legal certainty, the conditions for the exemption must 
be  set  out  in  a  clear  and  comprehensible  manner,  which  allows  stakeholders  to 
understand  those  conditions  and  how  they  apply  to  their  agreements,  and  therefore  to 
predict  whether  their  agreements  are  covered  by  the  exemption.  At  the  same  time,  the 
VBER  covers  a  broad  variety  of  sectors,  business  models,  agreements  and  restrictions, 
which  change  over  time.  When  setting  the  conditions  for  the  exemption,  it  is  therefore 
impossible  to  predict  how  markets  will  evolve  and  the  type  of  restrictions  that  might 
appear. Therefore, to ensure that the exemption remains future-proof, it necessarily has to 
rely on conditions that require some interpretation in their application to specific cases. 
Moreover,  even  though  the  Vertical  Guidelines  provide  additional  guidance  on  how  to 
apply  the  VBER  and  Article  101  of  the  Treaty,  they  cannot  for  the  same  reasons  be 
exhaustive in covering every possible type of agreement or restriction or in anticipating 
future market evolutions. 

In addition, it should be kept in mind when assessing this objective that the assessment 
by stakeholders of the level of legal certainty provided by the rules may also depend on 
the difficulties they encounter when applying the rules to their particular field of activity. 
Therefore,  the  assessment  of  this  objective  relies  not  only  on  the  stakeholders’  overall 
perception of the level of legal certainty achieved by the rules as a whole, which reflects 
their views on the usefulness of the exemption, but also pays particular attention to the 

50 

 
specific areas of the rules for which stakeholders (even if only a few) consider that there 
is uncertainty.104  

Even though the exemption relies on conditions that require some interpretation, notably 
to  allow  its  application  to  new  types  of  vertical  agreements  or  restrictions  that  might 
appear  after  the  adoption  of  the  VBER,  it  cannot  be  excluded  that  subsequent  market 
developments  may nevertheless  lead to  gaps in  the exemption  or a lack  of clarity as to 
how the exemption applies to new types of vertical agreements or restrictions. Therefore, 
such market developments may affect the ability of the VBER, together with the Vertical 
Guidelines,  to  increase  legal  certainty.  Understanding  how  the  market  has  developed 
since the adoption of the intervention (see section 5.1 above) is therefore also important 
for  the  assessment  of  effectiveness.  In  other  words,  the  ability  of  the  VBER,  together 
with  the  Vertical  Guidelines,  to  meet  its  objectives  is  also  dependent  on how  well  it is 
adapted to the evolution of the market since the adoption of the intervention. 

What are the findings? 

The  evidence  gathered  in  the  evaluation  suggests  that  the  VBER,  together  with  the 
Vertical  Guidelines,  is  overall  a  useful  instrument  that  increases  legal  certainty  as 
compared to a situation without the VBER and the Vertical Guidelines. Nevertheless, the 
evaluation identified certain provisions that, according to stakeholders, lack clarity, are 
difficult to  apply or no longer adapted to recent market developments,  in particular as 
regards  the  online  environment.  The  evaluation  also  identified  gaps  in  the  rules  and 
areas of the rules that do not refer to case law issued since the adoption of the rules (e.g. 
the CJEU’s Coty judgment). The evidence gathered in the evaluation suggests that these 
issues  affect  the  level  of  legal  certainty  provided  by  the  VBER  and  the  Vertical 
Guidelines. Therefore, the objective of facilitating the enforcement work of the relevant 
authorities  and  the  stakeholders’  self-assessment  of  their  vertical  agreements  by 
providing them with legal certainty has not been fully met. 

A majority of respondents to the public consultation,105 across all stakeholder groups,106 
indicated that  the VBER and the Vertical  Guidelines overall (i.e. seen in  their entirety) 
provide a sufficient level of legal certainty. Most of the respondents, including those who 

104  These specific areas are analysed in more detail in section 5.3 below and in Annex 4. 
105  Throughout section 5,  references to the views of the respondents to the public consultation should be 
understood  as  including  only  those  respondents  who  expressed  a  view  on  the  issue  at  hand,  thus 
excluding those who did not reply or indicated that the issue was not applicable to them. 

106  Throughout  section  5,  where  no  qualification  is  made  regarding  the  views  of  the  respondents  to  the 
public consultation, this should be understood as meaning that the reported view is broadly shared by 
all stakeholder groups that participated in the public consultation across the different sectors. Where a 
particular  view  was  shared  primarily  by  one  or  more  different  stakeholder  groups  among  those  that 
participated  in  the  public  consultation  (e.g.  distributors,  suppliers  and  stakeholders  belonging  to  a 
particular sector) this is reported. While indicative of a trend, the fact that a view was broadly shared by 
all  or  only  some  of  the  stakeholder  groups  does  not  however  mean  that  the  Commission  disregards 
diverging views, both within the same or across different stakeholder groups/sectors. Annex 4 reports in 
more detail the stakeholder views per area, regardless of whether these views were shared by a majority 
or minority of stakeholders. 

51 

 
                                                           
pointed  to  an  overall  insufficient  level  of  legal  certainty,  explained  that  the  VBER  and 
the  Vertical  Guidelines  provide  useful  guidance  for  businesses  to  conduct  a  self-
assessment of their vertical agreements. However, they also pointed to areas of the rules 
which  they  perceive  as  not  functioning  sufficiently  well.  Respondents  argue  that  a 
clarification and revision of certain aspects would therefore increase legal certainty. 

Respondents  to  the  public  consultation  were  also  asked  to  estimate  the  level  of  legal 
certainty  provided  by  the  VBER  and  the  Vertical  Guidelines  for  specific  areas  of  the 
rules.  For  the  majority  of  the  areas  of  the  rules,  respondents  (across  all  stakeholder 
groups) generally considered that there is an appropriate level of legal certainty. This is 
in  line  with  the  finding  that  the  overall  framework  provides  a  sufficient  level  of  legal 
certainty.  Nevertheless,  also  for  these  areas  of  the  rules  a  few  respondents  raised  some 
issues, which are analysed in more detail per area in Annex 4.  

There  were,  however,  a  number  of  areas  of  the  rules  for  which  the  majority  of 
respondents, across all stakeholder groups, considered that there is a slightly low or very 
low  level  of  legal  certainty  (e.g.  the  hardcore  restriction  regarding  resale  price 
maintenance), or where the number of replies indicating a slightly low or very low level 
of legal certainty was comparable to the number of replies indicating an appropriate level 
of  legal  certainty  (e.g.  the  guidance  on  agency  agreements).  This  suggests  that  these 
areas, which are assessed in more detail in Annex 4, should be taken into account in any 
next steps following the evaluation.107 

The reasons why certain areas of the rules are considered to provide a lower level of legal 
certainty vary between the areas identified. Respondents mentioned primarily the lack of 
clarity  of  certain  legal  concepts  and  principles  (e.g.  the  criteria  defining  a  commercial 
agent), the complexity of the structure of the rules, difficulties in applying certain areas 
of the rules in practice (e.g. applying the market share threshold to online platforms), a 
lack of sufficiently detailed examples for certain areas, and the fact that, for some areas, 
the rules and guidance are no longer adapted to recent market developments108 (e.g. the 
growth of online sales) or do not refer to case law issued since the adoption of the VBER 
(e.g. the CJEU’s Coty judgment). The level of legal certainty for these areas, including 
the underlying reasons, are analysed per area in more detail in section 5.3 below and in 
Annex 4. 

Participants  in  the  stakeholder  workshop  expressed  similar  views.  They  identified  a 
number of areas of the current rules which, according to them, are not functioning well 
and  explained  the  underlying  reasons.  They  also  drew  attention  to  a  lack  of  clarity  in 
respect of certain provisions and to areas where the rules are not well adapted to recent 
market developments and for which therefore the level of legal certainty is not as high as 
it could be. The views of the workshop participants are also discussed per area in more 
detail in section 5.3 below and in Annex 4. 

107  For more details, see Annex 2, section 2.2. 
108  For more details, see section 5.1 above. 

52 

 
                                                           
The National Competition Authorities also confirmed that the VBER, together with the 
Vertical  Guidelines,  have  provided  helpful  guidance  to  NCAs  and  legal  certainty  to 
stakeholders for the assessment of vertical agreements and restrictions under Article 101 
of  the  Treaty.  However,  in  their  view,  the  effectiveness  of  the  VBER  and  the  Vertical 
Guidelines is not as high as it could be due to a lack of clarity and insufficient guidance 
in  certain  areas.  Moreover,  the  NCAs  indicated  that  the  VBER  and  the  Vertical 
Guidelines  are  not  up  to  date  as  regards  market  developments,  in  particular  the  rise  of 
new business models and new technologies. The NCAs also suggested integrating recent 
case law of the Union courts on vertical restrictions in order to improve legal certainty. 
The  NCAs'  views  on  the  specific  areas  of  the  rules  for  which  they  consider  that  legal 
certainty is not as high as it could be are explained per area in more detail in section 5.3 
below and in Annex 4. 

The evaluation study also looked at the level of legal certainty provided by the VBER, 
together  with  the  Vertical  Guidelines,  with  a  focus  on  the  specific  areas  it  covered, 
namely  price  restrictions,  selective  distribution,  exclusive  distribution  and  retail  parity 
clauses.  Overall,  the  evaluation  study  found  that  certain  legal  definitions  used  in  the 
VBER are not sufficiently clear and that there is a lack of guidance in a number of areas, 
such as the assessment of the market shares of the parties to a vertical agreement for the 
purposes  of  determining  whether  the  VBER  is  applicable  to  them.  In  addition,  the 
evaluation study indicated that the VBER, together with the Vertical Guidelines, does not 
provide  sufficient  legal  certainty  for  assessing  vertical  agreements  in  an  online 
environment,  as  it  does  not  sufficiently  reflect  market  developments,  especially  the 
increased  importance  of  online  sales.  The  findings  of  the  evaluation  study  as  regards 
specific areas of the rules are explained per area in more detail in section 5.3 below and 
in Annex 4. 

Evaluation  Question  2  –  To  what  extent  do  the  conditions  currently  defined  in  the 
VBER, as interpreted in the Vertical Guidelines, meet the objective of exempting only 
those  agreements  for  which  it  can  be  assumed  with  sufficient  certainty  that  they 
generate efficiencies in line with Article 101(3) of the Treaty? 

What is the issue? 

As  explained  in  sections  1  and  2.3  above,  the  safe  harbour  provided  by  the  VBER  is 
limited by the Empowerment Regulation of 1965, which only authorises the Commission 
to block exempt those agreements for which it can be assumed with sufficient certainty 
that  they  satisfy  the  conditions  of  Article  101(3)  of  the  Treaty.  In  other  words,  the 
Commission  must  be  cautious  when  drawing  the  line  between  agreements  and 
restrictions that can and cannot be block exempted and thus when defining the scope of 
the  block  exemption.  In  this  regard,  the  Commission  must  pay  particular  attention  to 
avoiding false positives (i.e. exempting agreements for which it cannot be assumed with 
sufficient  certainty  that  they  satisfy  the  conditions  of  Article  101(3)  of  the  Treaty)  to 
ensure  that  the  VBER  is  in  line  with  the  Treaty  and  the  requirements  of  the 
Empowerment Regulation of 1965.  

At the same time, the Commission also seeks to avoid false negatives, which result in a 
situation  where  the  respective  vertical  agreement  or  practice  is  not  block  exempted 

53 

 
despite fulfilling the conditions of Article 101(3) of the Treaty. A false negative therefore 
increases  the  burden  for  businesses  when  self-assessing  the  compliance  of  their 
agreements  with  Article  101  of  the  Treaty,  as  they  have  to  perform  an  extended 
individual  assessment,  instead  of  being  able  to  rely  on  a  simpler  set  of  rules  (i.e.  the 
VBER  and  Vertical  Guidelines).  Reducing  the  risk  of  false  negatives  therefore 
contributes  to  fulfilling  the  general  objective  of  the  VBER,  which  is  to  facilitate  the 
enforcement  work  of  the  Commission  and,  in  view  of  the  decentralised  enforcement 
system, also the work of national competition authorities and national courts, as well as 
to  help  businesses  conduct  the  self-assessment  of  their  vertical  agreements.  Avoiding 
false negatives  is  however of lesser importance  as  they do not  result in  a situation that 
would be in breach of the Treaty and the Empowerment Regulation of 1965. 

In  view  of  the  above,  one  of  the  objectives  of  the  VBER  is  to  correctly  draw  the  line 
when  setting  out  the  conditions  that  vertical  agreements  need  to  meet  in  order  to 
benefit from the block exemption with a view to avoiding both false positives and false 
negatives, with the former being of greater importance.109  

The  conditions  to  take  into  account  when  assessing  this  objective  are  those  set  out  in 
Articles  2  to  5  of  the  VBER.  These  include  the  conditions  to  be  met,  first,  by  all 
agreements,  namely  the  market  share  threshold  below  which  the  exemption  is  granted 
(Article 3), the hardcore restrictions that remove the benefit of the block exemption for 
the whole agreement (Article 4), the excluded restrictions to which the block exemption 
does not apply, while the remainder of the agreement may still be exempted (Article 5), 
and,  second,  the  additional  conditions  under  which  the  block  exemption  applies  to 
specific  types  of  vertical  agreements  (Article  2).  The  Vertical  Guidelines  are  also 
relevant  for  this  assessment  insofar  as  they  provide  additional  guidance  on  the 
interpretation of the respective provisions of the VBER.  

Similarly  to  what  was  explained  as  regards  legal  certainty  in  relation  to  Evaluation 
Question 1 above, once the conditions that vertical agreements need to meet in order to 
benefit from the block exemption are set, subsequent market developments may lead to 
gaps  or  a  lack  of  clarity  as  to  how  the  exemption  applies  to  new  types  of  vertical 
agreements or restrictions. Therefore, such market developments (see section 5.1 above) 
may also affect how well the VBER, together with the Vertical Guidelines, achieved its 
objective of avoiding false positives and false negatives. 

What are the findings? 

All the sources of evidence used in the evaluation suggest that the VBER, together with 
the  Vertical  Guidelines,  generally  meets  the  objective  of  avoiding  false  positives.  This 
means that it generally does not exempt agreements for which it cannot be assumed with 
sufficient  certainty  that  they  satisfy  the  conditions  of  Article  101(3)  of  the  Treaty. 
Nevertheless,  some  stakeholders  argued  that  the  application  of  the  market  share 
threshold  to  online  intermediaries  may  lead  to  false  positives  and  that  retail  parity 

109  For more details, see section 2.3 above. 

54 

 
                                                           
clauses,  online  platform  bans  and  some  restrictions  on  online  advertising  should  be 
qualified  as  hardcore  restrictions.  Other  stakeholders,  however,  did  not  share  these 
views.  The  evaluation  also  found  that  there  are  practices  and  restrictions  that  have 
become more prevalent in the last years, such as online platform bans and restrictions on 
the  use  of  price  comparison  websites,  for  which  additional  guidance  is  lacking  to 
determine whether they fall under the current list of hardcore restrictions. 

The evidence gathered in the evaluation also suggests that the VBER, together with the 
Vertical Guidelines, generally meets the objective of avoiding false negatives, i.e. it does 
not  fail  to  exempt  agreements  that  could  be  exempted.  However,  some  stakeholders 
argued that the market share threshold is too low. Some stakeholders also indicated that 
non-compete  obligations  exceeding  5  years  should  not  be  an  excluded  restriction.  In 
addition, as regards in particular the list of hardcore restrictions, the view that the rules 
avoid  false  negatives  is  not  shared  by  all  stakeholder  groups.  Whereas  NCAs  and  a 
number  of  respondents  to  the  public  consultation  (including  a  majority  of  distributors) 
find this list appropriate, many respondents to the public consultation and participants in 
the stakeholder workshop found the list to lead to false negatives. On the other hand, the 
enforcement practice of  the Commission and the NCAs since the adoption of the VBER 
generally confirms the treatment of certain hardcore restrictions under the current rules. 
Overall, while the evidence therefore suggests that the lists of hardcore restrictions and 
excluded restrictions are generally appropriate, there may still be scope in some areas of 
the rules to further reduce the risk of false negatives. 

False Positives 

Respondents  to  the  public  consultation  expressed  their  views  on  the  scope  of  the 
exemption separately as regards the risk of false positives and false negatives, as well as 
separately for the conditions set out in Articles 2 to 5 of the VBER. 

As regards Articles 2 and 3 of the VBER, a large majority of the respondents indicated 
that the VBER does not  exempt agreements that should not be exempted. In particular, 
only one respondent pointed to the risk of a false positive as regards Article 2(2) of the 
VBER110 and  very  few  respondents111 pointed  to  the  risk  of  a  false  positive  as  regards 
Article  2(4)  of  the  VBER,  whereas  no  respondents  mentioned  such  a  risk  as  regards 
Article  2(3)  of  the  VBER.  As  regards  Article  3  of  the  VBER,  some  respondents 112 
pointed to the risk of a false positive especially as regards the application of the market 
share threshold to online intermediaries.  

A majority of the respondents also indicated that there are no types of vertical restrictions 
beyond those included in Articles 4 and 5 of the VBER for which it cannot be assumed 
with sufficient certainty that they generate efficiencies in line with Article 101(3) of the 

110  This issue was raised by a legal professional in relation to the retail market for food (e.g. supermarket 

alliances). 

111  Most of the respondents who indicated this are active on the distribution side of the supply chain, with 

the majority representing the motor vehicle sector. 

112  Mainly suppliers and associations of lawyers. 

55 

 
                                                           
Treaty. This  means  that  they  did  not  believe that there are any  vertical  restrictions that 
currently  benefit  from  the  exemption  despite  being  severe  restrictions  of  competition 
(hardcore restrictions) or restrictions that can only be block exempted subject to certain 
conditions  (excluded  restrictions),  which  should  therefore  be  added  to  these  Articles. 
Nevertheless, some respondents argued that certain retail parity clauses, online platform 
bans  and  some  restrictions  on  online  advertising  should  be  qualified  as  hardcore 
restrictions.  Very  few  respondents  also  argued  that  the  withdrawal  procedure  in  the 
context of cumulative effects could lead to a false positive. 

For  each  of  the  aforementioned  conditions,  respondents  to  the  public  consultation 
indicated in more detail the underlying reasons for the risk of a false positive.113 Given 
that the reasons are specific to each condition and cannot always be easily distinguished 
from the reasons for which stakeholders see a lack of legal certainty, these are addressed 
per area in more detail in section 5.3 below and in Annex 4. 

The views of the participants in the stakeholder workshop were in general aligned with 
the views of the respondents  to  the public consultation.  For most of the conditions,  the 
workshop participants indicated that a lack of clarity in respect of certain provisions and 
the  existence  of  areas  where  the  rules  are  not  well  adapted  to  the  market  reduce  their 
effectiveness.  However,  very  few  areas  were  mentioned  as  leading  to  false  positives. 
These  views  are  also  addressed  per  area  in  more  detail  in  section  5.3  below  and  in 
Annex 4. 

National  Competition  Authorities were of the  view that the VBER,  together with  the 
Vertical Guidelines, overall does not lead to false positives. In particular, NCAs indicated 
that,  based  on  their  experience,  the  market  share  threshold  of  30%  is  generally 
appropriate. However, they raised the question whether the market share threshold may 
be  too  high  or  whether  it  is  an  appropriate  indicator  of  market  power  for  vertical 
agreements  involving  online platforms. At the same time, some NCAs pointed out  that 
reducing  the  market  share  threshold  for  platforms  would  put  significant  weight  on  the 
definition of what can be considered a platform for that purpose and raise questions as to 
the  appropriate  level.  NCAs  also  raised  the  question  of  whether  the  market  share 
threshold  functions  properly  in  oligopolistic  markets.  As  regards  the  list  of  hardcore 
restrictions  in  Article  4  of  the  VBER,  NCAs  pointed  to  a  number  of  practices  and 
restrictions  that  have  become  more  prevalent  in  the  last  years,  such  as  online  platform 
bans  and  restrictions  on  the  use  of  price  comparison  websites,  for  which  additional 
guidance  is  lacking  to  determine  whether  they  fall  under  the  current  list  of  hardcore 
restrictions. In particular, some NCAs expressed the view that online platform bans and 
absolute  restrictions  on  the  use  of  price  comparison  websites  should  be  considered  a 
hardcore restriction under the VBER. NCAs generally did not express concerns regarding 
the  list  of  excluded  restrictions  in  Article  5  of  the  VBER.  The  views  of  the  NCAs 
regarding  the  specific  conditions  are  addressed  per  area  in  more  detail  in  section  5.3 
below and in Annex 4. 

113  For more details, see Annex 2, section 2.2. 

56 

 
                                                           
The  evaluation  study  also  investigated  whether,  for  the  specific  areas  it  covered 
(i.e. price  restrictions,  selective  distribution,  exclusive  distribution  and  retail  parity 
clauses), the exempted restrictions satisfy the conditions of Article 101(3) of the Treaty 
and whether the non-exempted restrictions do not satisfy those conditions. In particular, 
the evaluation study found that the exemption of selective distribution is adequate, as it 
leads  to  a  number  of  benefits  in  the  distribution  of  goods.  The  findings  on  particular 
restrictions  commonly  found  in  selective  distribution  agreements  were  however  more 
nuanced. Similarly, the evaluation study found that the rules on exclusive distribution are 
appropriate, although there are some areas in which there is a lack of clarity. In contrast, 
as  regards  retail  parity  clauses,  the  evaluation  study  found  mixed  evidence  as  to  the 
effects of those clauses.114 Also as regards resale price maintenance, the evaluation study 
resulted  in  mixed  evidence.115 These  findings  are  addressed  per  area  in  more  detail  in 
section 5.3 below and in Annex 4.  

False Negatives 

As  regards  Articles  2  and  3  of  the  VBER,  a  majority  of  the  respondents  to  the  public 
consultation indicated that there are no other types of vertical agreements beyond those 
covered  by  the  current  scope  of  the  exemption  for  which  it  can  be  assumed  with 
sufficient  certainty  that  they  generate  efficiencies  in  line  with  Article  101(3)  of  the 
Treaty.  Nevertheless,  some  stakeholders  mainly  indicated  that  the  exemption  of  dual 
distribution is too narrow, that the market share threshold is too low and that there is a 
lack of clarity as to the exact scope of these Articles. 

As regards the list of hardcore restrictions in Article 4 of the VBER, an important part of 
the respondents to the public consultation, especially legal professionals, indicated that it 
leads to false negatives because it contains one or more types of vertical restrictions for 
which  it  can  be  assumed  with  sufficient  certainty  that  they  satisfy  the  conditions  of 
Article  101(3)  of  the  Treaty,  and  which  should  therefore  be  exempted.  A  significant 
number  of  respondents  (including  a  majority  of  distributors),  however,  argued  the 
opposite.  Respondents  mentioned,  inter  alia,  resale  price  maintenance, 116  at  least  in 
certain  specific  situations,  and  certain  online  restrictions  as  being  potential  false 
negatives.  

A majority of the respondents to the public consultation indicated that the list of excluded 
vertical restrictions in Article 5 of the VBER also does not exclude types of restrictions 
for  which  it  can  be  assumed  with  sufficient  certainty  that  they  generate  efficiencies  in 
line with Article 101(3) of the Treaty. Nevertheless, there was still a significant number 
of  respondents  who  indicated  that  there  are  false  negatives  (e.g.  some  respondents 
indicated  that  non-compete  obligations  exceeding  5  years  should  not  be  an  excluded 
restriction). 

114  See section 3.4 of the evaluation study. 
115  See section 3.3 of the evaluation study. 
116  As regards resale price maintenance, this view was shared primarily by suppliers, whereas distributors 
and retailers generally agreed with the classification of RPM as a hardcore restriction under the VBER. 

57 

 
                                                           
For  each  of  the  aforementioned  conditions,  respondents  to  the  public  consultation 
indicated in more detail which specific provisions of the rules lead, according to them, to 
false negatives and the underlying reasons.117 Given that the reasons are specific to each 
condition  and  cannot  always  be  easily  distinguished  from  the  reasons  for  which 
stakeholders see a lack of legal certainty, these are addressed per area in more detail in 
section 5.3 below and in Annex 4. 

The  participants  in  the  stakeholder  workshop  had  largely  similar  views,  with  some 
areas mentioned as leading to false negatives. In particular, some participants argued that 
the current approach to  dual pricing is too rigid. Some participants also  argued that the 
market  share  threshold  could  be  higher,  as  agreements  between  parties  with  higher 
market shares can also be efficiency-enhancing. Participants in the stakeholder workshop 
mostly  expressed  concern  as  regards  the  list  of  hardcore  restrictions  in  Article  4  of  the 
VBER.  Other  participants  argued  that  non-compete  obligations  exceeding  five  years 
could  also  be  efficiency-enhancing.  These  views  are  also  addressed  per  area  in  more 
detail in section 5.3 below and in Annex 4. 

National  Competition  Authorities were of the  view that the VBER,  together with  the 
Vertical  Guidelines,  overall  does  not  lead  to  false  negatives.  As  regards  the  list  of 
hardcore restrictions in Article 4 of the VBER, NCAs generally recognise the importance 
of  this  list  and  find  it  adequate,  although  some  notions  referred  to  in  Article  4  are 
considered  not  to  be  sufficiently  clear.  The  views  of  the  NCAs  regarding  the  specific 
conditions are addressed per area in more detail in section 5.3 below and in Annex 4 

The  evaluation  study  also  investigated  whether,  for  the  specific  areas  it  covered 
(i.e. price  restrictions,  selective  distribution,  exclusive  distribution  and  retail  parity 
clauses), the non-exempted restrictions do not satisfy the conditions of Article 101(3) of 
the Treaty.  In particular, the evaluation study found mixed evidence as to the effects of 
retail  parity  clauses.  The  results  pointed  to  both  pro-competitive  and  anti-competitive 
effects of such clauses, depending on the nature of the clause in question and the market 
circumstances.118 Also as regards resale price maintenance, the evaluation study resulted 
in  mixed  evidence.119 While  the  results  suggest  that  there  can  be  efficiencies  associated 
with  RPM  agreements,  the  study  focused  on  the  book  sector,  which  has  some  unique 
features.  Therefore,  the  results  for  this  sector  have  to  be  interpreted  with  caution  and 
cannot be easily transposed to other sectors. The results for both types of restrictions are 
presented in more detail in Annex 4. 

Finally,  also  the  enforcement  practice  of  the  Commission  and  the  NCAs,  set  out  in 
sections  5.1.3  and  5.1.4  above,  is  useful  in  assessing  the  risk  of  false  negatives.  This 
enforcement  practice  generally  confirms  the  treatment  of  certain  hardcore  restrictions 
under  the  current  rules,  which  suggests  a  low  risk  of  false  negatives  as  regards  these 
restrictions.  It  should  be  noted  that  the  hardcore  restrictions  under  the  current  rules 

117  For more details, see Annex 2, section 2.2. 
118  See section 3.4 of the evaluation study. 
119  See section 3.3 of the evaluation study. 

58 

 
                                                           
include practices that have consistently  been found  to  amount to  a severe restriction of 
competition  in  enforcement  actions  taken  by  the  Commission  and  NCAs  since  the 
adoption  of  the  VBER.  In  particular  resale  price  maintenance,  which  is  the  hardcore 
restriction that was more controversially discussed during the evaluation, corresponds to 
the highest  number of decisions by NCAs and was also  pursued by the Commission  in 
several recent cases. 

Evaluation  Question  3  –  To  what  extent  does  the  VBER,  together  with  the  Vertical 
Guidelines,  provide  a  common  framework  for  the  assessment  of  the  compliance  of 
vertical  agreements  with  Article  101  of  the  Treaty  in  order  to  ensure  a  consistent 
application  of  Article  101  of  the  Treaty  by  national  competition  authorities  and 
national courts to vertical agreements? 

What is the issue? 

As  explained  in  more  detail  in  sections  1  and  2.3  above,  in  view  of  the  decentralised 
system  introduced  by  Council  Regulation  1/2003,  NCAs  and  national  courts  have  the 
power  to  apply  not  only  Article  101(1)  of  the  Treaty,  but  also  Article  101(3)  of  the 
Treaty.  One  of  the  objectives  of  the  VBER,  together  with  the  Vertical  Guidelines,  is 
therefore to provide a common framework of assessment for the Commission, NCAs and 
national courts to apply Article 101(3) of the Treaty to vertical agreements. Harmonised 
rules contribute to ensuring that businesses operating across the EU benefit from a level 
playing field, which in turn can contribute to the proper functioning of and to enhancing 
the European Single Market. 

When assessing this objective, it is relevant to recall that NCAs and national courts are 
bound  by  the  VBER,  which  is  directly  applicable  in  all  Member  States.  The  Vertical 
Guidelines, however, do not  bind  NCAs or national  courts, but  are typically taken into 
account when assessing the compatibility of vertical agreements with Article 101 of the 
Treaty.  Moreover,  as  explained  as  regards  legal  certainty  in  relation  to  Evaluation 
Question  1  above,  the  VBER  covers  a  broad  variety  of  sectors,  business  models, 
agreements and restrictions, which evolve over time. As it is impossible to predict how 
markets will evolve and what type of restrictions might appear, the VBER and Vertical 
Guidelines necessarily require some interpretation in  their application to  specific cases. 
When new types of restrictions appear, different NCAs or national courts may thus have 
diverging views regarding the assessment under the VBER and the Vertical Guidelines. 
The resulting divergences in the application of the current rules may persist despite the 
existence  of  mechanisms  to  overcome  such  divergences,  such  as  the  possibility  for 
national courts to ask the Commission for an opinion pursuant to Article 15(1) of Council 
Regulation 1/2003 or to refer questions to the CJEU for a preliminary ruling,120 as well as 
the  possibility  for  NCAs  to  consult  the  Commission  under  Article  11  of  Council 
Regulation 1/2003 or to discuss issues of interest among themselves in the context of the 
European  Competition  Network.  Divergences  are  also  likely  to  take  some  time  to  be 

120  A preliminary ruling is not only binding on the national court that made the reference for a preliminary 

ruling, but also on the national courts of all other Member States. 

59 

 
                                                           
resolved, for example, because of the time required for a question to reach the CJEU and 
for the CJEU to take a position on it, or because additional experience is needed on the 
effects  of  a  particular  new  restriction  on  the  market,  before  NCAs  can  agree  on  a 
coherent approach. 

Given that diverging views may notably  exist when new types of restrictions  appear, it 
necessarily  follows  that  market  developments  subsequent  to  the  adoption  of  the 
intervention,  as  those  identified  in  section  5.1  above,  may  also  affect  how  well  the 
VBER,  together  with  the  Vertical  Guidelines,  has  met  its  objective  of  providing  a 
common framework of assessment. 

What are the findings? 

The evidence gathered in the evaluation suggests that while the VBER, together with the 
Vertical Guidelines, is overall taken into account by national competition authorities and 
national  courts  in  their  assessment  of  vertical  agreements,  there  remains  significant 
scope  for  diverging  interpretations.  The  evaluation  has  identified  a  perceived  lack  of 
clarity in respect of certain provisions, as well as gaps in the current rules (i.e. new types 
of  restrictions  that  are  not  addressed  in  the  rules,  such  as  retail  price  parity  clauses), 
which  have  led  to  diverging  interpretations.  Such  diverging  interpretations  lead  to  a 
decreased level of legal certainty of the VBER, together with the Vertical Guidelines, and 
also affect the efficiency and coherence of the intervention, as explained in sections 5.2.2 
and  5.2.4  below.  Therefore,  the  objective  of  providing  a  common  framework  of 
assessment  to  ensure  consistency  in  the  application  of  Article  101  of  the  Treaty  to 
vertical agreements by national competition authorities and national courts has not been 
fully met. 

A  significant  number  of  respondents  to  the  public  consultation,  across  all  stakeholder 
groups  and  sectors,  indicated  that  there  are  diverging  interpretations  by  NCAs  and 
national  courts  when  applying  the  VBER  and  the  Vertical  Guidelines.  These  diverging 
interpretations stem,  on  the one hand,  from  the  fact  that the Vertical  Guidelines do not 
bind  NCAs  or  national  courts.  On  the  other  hand,  respondents  also  indicated  that  the 
VBER  and  the  Vertical  Guidelines  do  not  offer  sufficient  clarity  in  a  number  of  areas, 
which  in  turn  provides  scope  for  diverging  interpretations.  Respondents  pointed,  for 
example,  to  the  rules  on  resale  price  maintenance  being  interpreted  in  an  inconsistent 
manner at national level and suggested that those inconsistencies may be due to a lack of 
clarity  on  the  correct  approach  in  this  area  (in  particular  regarding  whether  the  use  of 
recommended  prices  accompanied  by  monitoring  policies  can  qualify  as  resale  price 
maintenance).  Other  respondents  pointed  to  diverging  interpretations  of  existing  case 
law, such as the CJEU’s Coty judgment, and similarly argued that such divergences could 
be due to a lack of clarity in the VBER or the Vertical Guidelines on the interpretation to 
be  given  to  such  case  law.  Respondents  also  indicated  that  NCAs  and  national  courts 
have adopted diverging approaches to new types of restrictions that are not addressed in 
the  VBER  and  the  Vertical  Guidelines  and  that  have  become  more  prevalent  in  recent 
years (e.g. retail price parity clauses). The lack of consistency in the treatment of these 
restrictions has  led,  according to  the respondents,  to  significant  costs for  businesses, as 
businesses  have  had  to  adapt  their  contracts  for  each  Member  State  in  which  they 

60 

 
operate, and to a possible chilling effect on pro-competitive conduct. The particular areas 
of  the  rules  for  which  respondents  pointed  to  diverging  interpretations,  as  well  as  the 
underlying  reasons,  are  addressed  per  area  in  more  detail  in  section  5.3  below  and  in 
Annex 4. 

Overall, respondents to the public consultation argue that the diverging interpretations by 
NCAs  and  national  courts  lead  to  a  decreased  level  of  legal  certainty  of  the  VBER, 
together  with  the  Vertical  Guidelines.  According  to  the  respondents,  this  decrease  in 
legal  certainty  forces  suppliers  and  distributors  to  assess  compliance  risks  for  each 
Member State in which they operate and adjust their business practices according to the 
approach taken by the respective NCA and national courts. It may also lead to suppliers 
and  distributors  adopting  the  approach  of  the  NCA  or  national  court  which  has  the 
strictest  interpretation.  According  to  the  respondents  to  the  public  consultation,  such 
diverging  interpretations  by  NCAs  and  national  courts  also  have  an  effect  on  the 
coherence  and  efficiency  of  the  VBER,  together  with  the  Vertical  Guidelines.  With 
regard to the latter, respondents indicated that businesses often incur additional costs in 
order to ensure that their vertical agreements comply with the diverging interpretations of 
NCAs  and  national  courts,  which  therefore  reduces  the  efficiency  of  the  rules.  This  is 
especially  burdensome  for  SMEs,  which  may  be  deterred  from  entering  into  vertical 
agreements due to the high costs involved. 

Participants  in  the  stakeholder  workshop  also  pointed  to  a  number  of  areas  of  the 
VBER and the Vertical Guidelines that have been subject to diverging interpretations by 
NCAs and national courts, such as the market definition in vertical relationships and the 
treatment  of  certain  online  sales  restrictions.  Some  participants  suggested  that  the 
Vertical  Guidelines  should  be  binding  on  NCAs  and  national  courts,  whereas  others 
limited  themselves  to  highlighting  that  the  lack  of  a  uniform  interpretation  and 
application of the VBER and the Vertical Guidelines reduces legal certainty. The views 
of  the  participants  are  addressed  per  area  in  more  detail  in  section  5.3  below  and  in 
Annex 4. 

The  National  Competition  Authorities  also  acknowledged  the  existence  of  areas  in 
which  they  have  diverging  views,  e.g.  regarding  the  question  whether  online  platforms 
can  qualify  as  genuine  agents,  the  treatment  of  online  platform  bans  and  dual  pricing. 
NCAs  further  acknowledged  that  the  limited  guidance  provided  in  the  VBER  and  the 
Vertical  Guidelines  regarding  the  legal  qualification  and  assessment  of  price  parity 
clauses might result in divergences in the treatment of such clauses, which reduces legal 
certainty for stakeholders. In view of this, the NCAs would welcome additional guidance 
on these issues. The views of the NCAs are addressed per area in more detail in section 
5.3 below and in Annex 4. 

The  evaluation  study  analysed  the  enforcement  activities  of  the  NCAs  as  regards 
vertical  restrictions  over  the  last  ten  years  and  confirmed  the  existence  of  divergent 
interpretations  among  NCAs  when  applying  the  VBER  and  the  Vertical  Guidelines, 
although only in some areas of the rules.  

Cases involving price restrictions represented slightly more than half of the total number 
of reported cases, with resale price maintenance accounting for the vast majority thereof. 

61 

 
Based  on  the  reported  cases,  it  appears  that  NCAs  did  not  face  major  difficulties 
regarding the legal assessment of resale price maintenance as the criteria for assessment 
are  relatively  straightforward.  However,  NCAs  seem  to  have  somewhat  divergent 
approaches  in  assessing  some  particular  types  of  price  restrictions  (e.g.  novel 
implementations of RPM, for which the current rules do not contain any guidance).  

Cases  involving  selective  distribution  were  the  second  largest  category  among  the 
reported cases and included several different restrictions, such as internet sales bans, bans 
on  sales  through  online  marketplaces,  bans  on  the  use  of  price  comparison  tools, 
restrictions  on  keyword  bidding  for  the  purposes  of  online  advertising,  dual  pricing, 
cross-selling  restrictions  and  the  exclusion  of  online  retailers.  Based  on  the  reported 
cases, the evaluation study identified divergent approaches between NCAs and national 
courts as regards in particular the treatment of bans on sales through online marketplaces. 

In  contrast,  cases  involving  exclusive  distribution  were  not  very  numerous  during  the 
analysed time period and the evaluation study did not find any significant divergences in 
the approach taken by NCAs.  

As regards retail parity clauses, the evaluation study indicated that the NCAs followed a 
similar  approach  in  applying  the  rules  to  wide  parity  clauses.  However,  narrow  parity 
clauses  (primarily  in  the  hospitality  sector),  were  not  treated  in  the  same  way  by  all 
NCAs. The findings of the study in this regard are addressed in more detail in section 5.3 
below and in Annex 4.  

5.2.2.  Efficiency 

Evaluation Questions 

4  –  Are  the  costs  for  assessing  whether  the  VBER,  together  with  the  Vertical 
Guidelines,  is  applicable  to  certain  vertical  agreements  proportionate  to  the  benefits 
that the VBER, together with the Vertical Guidelines, brings for stakeholders? 

5 – Is there scope for further simplification and cost reduction? 

6 – Would the costs of ensuring compliance of vertical agreements with Article 101 of 
the Treaty increase if the VBER were not renewed? 

7 – Have the costs generated by the application of the VBER, together with the Vertical 
Guidelines,  increased  as  compared  to  the  1999  VBER  and  the  2000  Vertical 
Guidelines?  

What is the issue? 

The  criterion  of  efficiency  looks  at  whether  the  VBER,  together  with  the  Vertical 
Guidelines,  was  efficient  in  achieving  its  objectives,  taking  into  account  the  costs  and 
benefits  associated  with  applying  it.  In  accordance  with  the  current  framework  for 
applying  Article  101  of  the  Treaty,  businesses  have  to  self-assess  their  vertical 
agreements  to  ensure  compliance  with  Article  101  of  the  Treaty.  This  self-assessment 
necessarily  entails  costs  for  businesses.  The  VBER,  together  with  the  Vertical 

62 

 
Guidelines, aims to facilitate this self-assessment by creating a safe harbour for vertical 
agreements  that  can  be  considered  with  sufficient  certainty  as  efficiency-enhancing, 
providing  guidance  for  the  application  of  the  VBER  and  Article  101  of  the  Treaty,  as 
well  as  creating  a  common  framework  for  the  assessment  of  vertical  agreements  under 
the VBER and Article 101 of the Treaty across the EU. In this context, it is important to 
note  that  the  VBER,  together  with  the  Vertical  Guidelines,  does  not  impose  any 
additional compliance obligations on businesses beyond those reflected in Article 101 of 
the Treaty. Nevertheless, in order to verify whether their agreements can benefit from the 
safe  harbour  provided  by  the  VBER,  businesses  need  to  check  them  against  the 
conditions set out in the VBER, which may entail costs. 

In assessing whether the VBER, together with the Vertical Guidelines, has been efficient 
in  achieving  its  objectives,  the  Commission  focused  on  four  elements.  First,  the 
Commission  weighed  whether  the  costs  of  assessing  whether  the  VBER,  together  with 
the Vertical Guidelines, applies to a particular vertical agreement are proportionate to the 
benefits  it  brings,  namely  the  facilitation  of  the  businesses’  self-assessment,  when 
compared  to  the  hypothetical  baseline  scenario  of  not  having  a  VBER  and  Vertical 
Guidelines in place. Second, the Commission assessed the potential for simplification of 
the  current  rules  and  for  a  further  reduction  of  the  associated  costs.  Third,  the 
Commission  assessed  whether  the  costs  of  ensuring  compliance  of  vertical  agreements 
with Article 101 of the Treaty would increase if the VBER were to lapse (i.e. comparing 
the  actual  situation  to  a  hypothetical  baseline  scenario  of  not  having  a  VBER  and 
Vertical  Guidelines  in  place).  Fourth,  the  Commission  assessed  whether  the  costs 
incurred  by  businesses  under  the  VBER  and  the  Vertical  Guidelines  have  increased  as 
compared to the costs incurred before the intervention, i.e. under a baseline scenario of 
having the 1999 VBER and the 2000 Vertical Guidelines in place. 

What are the findings? 

Although the evidence gathered was not sufficient to allow the Commission to conclude 
on the costs that stakeholders incur for assessing the application of the VBER, together 
with the Vertical Guidelines, to their vertical agreements, all sources of evidence relied 
on in the evaluation suggest that those costs are proportionate to the benefits brought by 
the  rules,  notably  the  safe  harbour  and  the  resulting  increase  in  legal  certainty. 
Moreover, the evidence gathered in the evaluation also suggests that those costs would 
increase in the absence of the VBER and Vertical Guidelines, especially for SMEs. At the 
same  time,  the  evidence  suggests  that  there  is  significant  room  for  simplification  and 
further cost reduction, notably by reducing the complexity of the wording and structure 
of  the  rules  and  by  updating  the  rules  in  order  to  bring  them  in  line  with  the  current 
needs.  The  fact  that  the  rules  are  not  sufficiently  well  adapted  to  recent  market 
developments  also  seems  to  have  impacted  the  evolution  of  compliance  costs  since  the 
1999 and 2010 amendments. In this regard, the evidence gathered during the evaluation 
does not allow to conclude clearly on whether the compliance costs have decreased. 

63 

 
Are the costs proportionate to the benefits? 

A majority of the respondents  to  the  public  consultation, across all sectors, confirmed 
that  the  assessment  of  the  application  of  the  VBER,  together  with  the  Vertical 
Guidelines,  to  their  vertical  agreements  generates  costs.  These  respondents  were 
primarily businesses, as a large number of business associations reported that they do not 
have  information  on  the  costs  incurred  by  their  members.  A  number  of  respondents 
provided a qualitative estimate of the costs linked to the assessment of the applicability 
of the rules by describing the nature of the costs they incur. Most replies refer to the fees 
for external consultants (lawyers and economists), as well as to the cost of internal legal 
advice  and  the  time  spent  by  commercial  teams  to  negotiate  and  review  contractual 
documents.  As  regards  quantitative  estimates,  however,  a  majority  of  the  respondents 
indicated that they are not able to provide any such cost estimate. This is either because it 
is  not  possible  for  them  to  identify  the  relevant  costs  among  the  total  compliance  and 
legal costs they incur or, in the case of business associations, because they do not have an 
insight  into  the  costs  incurred  by  their  members.  A  few  respondents  did  provide  cost 
estimates,  which  however  did  not  allow  the  Commission  to  draw  any  general 
conclusions, notably due to the significant divergence in the figures provided.  

Despite  recognising  that  the  application  of  the  VBER,  together  with  the  Vertical 
Guidelines,  generates  costs,  a  majority  of  the  respondents  to  the  public  consultation 
indicated  that  these  costs  are  proportionate  to  the  benefits  it  brings.  Respondents 
mention, for example, that the legal certainty resulting from the application of the VBER, 
together with the Vertical Guidelines, can lead to less legal disputes between the parties 
to  an  agreement,  which  generate  additional  costs  for  stakeholders.  Respondents 
highlighted that these benefits are particularly important for SMEs, whose market shares 
are generally low and therefore do not exceed the market share thresholds of the VBER, 
enabling them to benefit more often than other businesses from the block exemption.   

National Competition Authorities generally pointed out that, in their view, it appears to 
be difficult for businesses, especially SMEs, to self-assess whether a vertical agreement 
complies  with  the  VBER,  together  with  the  Vertical  Guidelines,  without  consulting  a 
lawyer specialised in competition law, which entails certain costs for them. Nevertheless, 
NCAs  indicated  that  the  VBER,  together  with  the  Vertical  Guidelines,  contributes  to 
reducing  the  costs  borne  by  stakeholders,  even  though  this  reduction  is  difficult  to 
measure.  

The evaluation  study confirmed these findings. On the basis of ten case studies in  the 
form  of  interviews  of  law  firms  advising  clients  on  vertical  restrictions,  industry 
associations,  a  company  operating  globally  and  a  professor  of  competition  law,  the 
evaluation study found that the costs generated by the VBER, together with the Vertical 
Guidelines, are proportionate to the benefits of the rules.  

Is there scope for further simplification and cost reduction? 

Respondents  to  the  public  consultation  indicated  that  there  is  scope  for  further  cost 
reduction.  In  particular,  respondents  mentioned  that  the  lack  of  clarity  of  certain 
provisions, as well as the fact that the rules are not fully adapted to market developments 

64 

 
detract  from  the  legal  certainty  of  the  rules.  Therefore,  applying  the  rules  requires  an 
increased need for legal  advice, which increases costs and reduces the efficiency of the 
rules. Respondents also indicated that the diverging interpretation of some provisions of 
the VBER and the Vertical Guidelines by NCAs and national courts generates additional 
costs,  as  it  requires  businesses  to  seek  specific  legal  advice  for  each  Member  State  in 
which they operate. The lack of a harmonised interpretation therefore also detracts from 
the  efficiency  of  the  rules.  Clarifying  the  rules,  adapting  them  to  the  market 
developments and reducing the scope for diverging interpretations should therefore lead 
to a cost reduction. 

The  evidence  also  suggests  that  a  further  cost  reduction  could  be  achieved  through  a 
simplification  of  the  current  rules.  Some  respondents  mentioned  in  this  regard  that  the 
rules are not straightforward to understand and apply, due to unclear wording or structure 
(e.g.  exceptions  to  exceptions  in  Article  4  of  the  VBER),  as  well  as  a  lack  of  clear 
definitions and guidance, which is  not  presented  in  a consistent manner  for some areas 
concerned.  Businesses  therefore often need to  have recourse to  external  legal  advice in 
order to apply the rules properly.  

NCAs  also  indicated  that  due  to  the  complexity  of  the  rules,  many  businesses  need  to 
seek  an  opinion  from  a  law  firm  specialised  in  competition  law  in  order  to  apply  the 
VBER. Simplifying the rules would therefore reduce costs for stakeholders. 

Would the costs increase if the VBER were not renewed? 

In any event, almost all of the respondents to the public consultation indicated that the 
costs linked to ensuring compliance of vertical agreements with Article 101 of the Treaty 
would  increase  if  the  VBER  were  not  renewed  since  legal  certainty  for  their  self-
assessment  would  decrease  or  even  disappear.  In  particular,  respondents  explained  that 
businesses from  all sectors would have to spend more time and resources (notably fees 
for  lawyers  and  economists)  on  assessing  the  compliance  of  their  vertical  agreements 
with  Article  101  of  the  Treaty  since  an  assessment  of  whether  an  agreement  is  block-
exempted usually entails less work and requires less facts to be investigated compared to 
an extended individual assessment under Article 101 of the Treaty. Moreover, litigation-
related costs would also increase, as the lack of legal certainty would likely lead to more 
disputes about the legality of certain vertical restrictions. Some law firms stated that not 
renewing the VBER would increase the time required to assess vertical restrictions and 
that the cost of legal advice would increase accordingly. Respondents, however, were not 
able to provide a quantitative estimate for this increase in costs. Several respondents also 
stressed that SMEs would be especially affected by any such cost increase, since they do 
not  have  the  human  and  financial  resources  needed  to  perform  what  is,  from  their 
perspective,  a  complex  self-assessment  under  Article  101  of  the  Treaty.  Some 
respondents  also  indicated that not  renewing the VBER  could  have a chilling effect,  as 
businesses  could  be  deterred  from  offering  innovative  business  solutions  or  developing 
new business models whose compatibility with Article 101 of the Treaty would have to 
be  assessed  in  each  individual  case  (instead  of  being  block-exempted).  Finally, 
respondents also indicated that the divergences in approach between NCAs and national 
courts  when  applying  Article  101  of  the  Treaty  to  vertical  agreements  are  likely  to 

65 

 
increase in the absence of the VBER. The above also suggests that the costs of using the 
VBER,  together  with  the  Vertical  Guidelines,  are  lower  compared  to  a  situation  where 
stakeholders must self-assess without the VBER and the Vertical Guidelines. 

NCAs also considered that the costs they incur when assessing the compliance of vertical 
agreements with Article 101 of the Treaty would increase in the absence of the VBER. 
NCAs reached the same conclusion in respect of the absence of the Vertical Guidelines. 

The  evaluation  study  also  found  that  in  the  absence  of  the  VBER,  the  legal  costs  for 
businesses would be much higher than is currently the case and there would be less legal 
certainty  for  stakeholders  regarding  the  compliance  of  their  vertical  agreements  with 
Article  101  of  the  Treaty.  The  same  would  happen  in  the  absence  of  the  Vertical 
Guidelines. Nevertheless, the case studies did not produce any specific figures that would 
help estimate the costs in question.  

Have  the  costs  increased  as  compared  to  the  1999  VBER  and  the  2000  Vertical 
Guidelines? 

As  regards  how  the  costs  generated  by  the  application  of  the  VBER,  together  with  the 
Vertical  Guidelines, compare to  the costs incurred under the 1999 VBER  and the 2000 
Vertical  Guidelines, a majority of the respondents to  the  public  consultation indicated 
that  the  costs  have  decreased,  in  particular  because  the  VBER  and  the  Vertical 
Guidelines  are  clearer  than  the  previous  rules.  In  contrast,  some  respondents  indicated 
that the costs have increased because of (i) market developments such as growing online 
sales, which have rendered the assessment more complex and to which the rules are not 
sufficiently well adapted, and (ii) diverging interpretations of the current rules by NCAs 
and national  courts. However, none of the respondents  provided a quantitative estimate 
of the perceived change in costs.  

Similarly,  the  evidence  gathered  in  the  evaluation  study  suggests  that  it  is  not  clear 
whether the costs have increased or decreased. Some case studies indicated that costs are 
lower, since the two regimes are similar and businesses have gained experience in using 
the  conditions  of  the  block  exemption  to  assess  their  agreements.  Other  case  studies, 
however, indicated that the costs are higher, since the current regime extended the market 
share  threshold  also  to  the  buyer’s  market  share,  which  requires  stakeholders  to  incur, 
among  others,  the  cost  of  collecting  additional  information.  Moreover,  due  to  rapid 
changes in market conditions, in particular the growth of online sales and of new market 
players such as marketplaces, the costs of applying the rules are constantly increasing, as 
businesses need more legal advice.  

The evidence from the evaluation study as well as from the public consultation therefore 
suggests  that  the  evolution  of  costs  since  1999  has  not  necessarily  been  linear.  At  the 
time  of  the  2010  amendment,  costs  were  likely  reduced  as  the  VBER  and  Vertical 
Guidelines addressed issues for which there had previously not been sufficient guidance. 
However, as the market continued to evolve after 2010, costs appear to have increased, as 
the rules progressively became less adapted to those market developments. The increase 
in new types of agreements and new vertical restrictions, which are by their very nature 
not explicitly covered by the rules and for which there is limited or no guidance, is likely 

66 

 
to  lead  to  increased  costs  for  stakeholders,  as  they  entail  an  increased  need  for  legal 
advice. 

5.2.3.  Relevance 

Evaluation  Question  8  –  How  well  do  the  objectives  of  the  VBER,  together  with  the 
Vertical  Guidelines  (i.e.  to  provide  legal  certainty  for  assessing  whether  vertical 
agreements comply with Article 101 of the Treaty, to properly capture under the block 
exemption those vertical agreements that can be considered with sufficient certainty as 
efficiency-enhancing  and  to  provide  a  common  framework  to  ensure  a  consistent 
application by national competition authorities and national courts of the vertical rules 
across the EU) still correspond to the needs? 

What is the issue? 

The  assessment  of  the  relevance  of  the  VBER,  together  with  the  Vertical  Guidelines, 
focuses  on  whether  its  objectives  have  proven  to  be  appropriate  and  whether  they  still 
correspond to the current needs, taking into account the market developments that have 
taken place since its adoption. The VBER, together with the Vertical Guidelines, aims at 
addressing the need for legal certainty of businesses entering into vertical agreements (in 
view  of  the  fact  that  they  have  to  self-assess  the  compliance  of  their  agreements  with 
Article 101 of the Treaty) and the need for a common framework of assessment for the 
NCAs and national courts (in view of the decentralised application of Article 101 of the 
Treaty). In addition, it is important to recall that by exempting certain vertical agreements 
from  the  application  of  Article  101  of  the  Treaty  and  providing  guidance  on  both  the 
application  of  the  VBER  and  Article  101(1)  of  the  Treaty  to  vertical  agreements,  the 
VBER,  together  with  the  Vertical  Guidelines  also  contributes  in  the  long-term  to  the 
promotion  of  effective  competition  and  economic  efficiency  in  the  European  Single 
Market  for  the  benefit  of  consumers.  When  assessing  the  relevance  of  the  VBER, 
together with the Vertical Guidelines, it must also be taken into account that its ability to 
promote  effective  competition  and  economic  efficiency  for  the  benefit  of  consumers  is 
linked  to  how  well  the  VBER,  together  with  the  Vertical  Guidelines,  is  adapted  to  the 
current market environment, which has evolved significantly since its adoption. 

In  assessing  whether  the  VBER,  together  with  the  Vertical  Guidelines,  is  still  relevant, 
the Commission focused on two main aspects.  

First,  the  Commission  assessed  how  the  evolution  of  distribution  models  over  recent 
years might  have impacted the needs  and objectives of the intervention.  Understanding 
this evolution is necessary to assess whether the needs are still the same since significant 
changes to distribution models (e.g. a pronounced shift to vertical integration and away 
from more traditional distribution systems) could have an impact on whether there is still 
a  need  to  provide  legal  certainty  and  a  common  framework  of  assessment  for  these 
distribution  models.  At  the  same  time,  the  assessment  of  the  evolution  of  distribution 
models over recent years is also important for the assessment of effectiveness, since the 
ability  of  the  VBER,  together  with  the  Vertical  Guidelines,  to  meet  its  objectives  is 
dependent on how well adapted it is to the evolution of the market since the adoption of 
the intervention. This is reflected in section 5.2.1 above, as the evaluation shows that the 

67 

 
market developments that are explained in more detail in section 5.1 above have had an 
impact on the effectiveness of the intervention.  

Second,  the  Commission  assessed  whether,  in  view  of  new  market  developments, 
stakeholders  still  see  a  need  for  maintaining  the  VBER,  together  with  the  Vertical 
Guidelines, and whether they see a need for a revision of the rules. 

What are the findings? 

The  evidence  gathered  during  the  evaluation  suggests  that  the  VBER  and  the  Vertical 
Guidelines are not  sufficiently well adapted to the current market  environment,  as they 
do  not  entirely  take  into  account  the  market  developments  that  have  taken  place  since 
their  adoption.  In  particular,  the  evaluation  has  shown  that  since  the  adoption  of  the 
intervention, the growth of online sales and online platforms has had a significant impact 
on distribution models. In this context, the evolving nature of platform business models 
has led to an increase in the number of contractual relationships and the increased use 
of vertical agreements over time. At the same time, today’s consumers expect to have a 
continuous omni-channel experience across a variety of different channels such as offline 
and  online  shops,  marketplaces  and  other  online  platforms.  This  has  led  suppliers  to 
increase  the  number  of  different  distribution  and  sales  channels  used  to  promote  their 
products  and  services.  These  developments  have  led  to  changes  as  to  the  distribution 
models  used.  For  example,  the  use  of  selective  distribution  systems  has  increased, 
whereas  exclusive  distribution  is  used  less  frequently  today.  Similarly,  new  types  of 
vertical  restrictions,  such  as  restrictions  regarding  sales  through  online  marketplaces, 
restrictions  on  online  advertising  or  retail  parity  clauses  have  become  more  prevalent 
due to the growth of e-commerce. In addition, some issues that were already analysed at 
the time of the last revision have become more prominent over time, such as stakeholder 
concerns with regard to possible free-riding between the different sales channels and the 
appropriate delineation between active and passive sales.  

These market developments support the finding that the VBER, together with the Vertical 
Guidelines,  remains  relevant,  as  there  is  a  need  to  address  the  changes  in  the  use  of 
different  distribution  models  and  sales  channels,  as  well  as  the  increase  of  vertical 
agreements and new vertical restrictions. In particular with regard to the latter, there is 
a need to provide legal certainty for their assessment, to determine whether they satisfy 
the  conditions  of  Article  101(3)  of  the  Treaty  and  to  provide  a  common  framework  of 
assessment. 

In addition to the assessment of the evolution of distribution models over recent years set 
out in section 5.1 above, the Commission also assessed whether stakeholders still see a 
need for maintaining the VBER, together with the Vertical Guidelines, and whether they 
see a need for a revision of the rules.  

A  large  majority  of  the  respondents  to  the  public  consultation  indicated  that  not 
renewing  the  VBER  and  withdrawing  the  Vertical  Guidelines  would  have  negative 
effects for them, leading in particular to a severe loss of legal certainty in the assessment 
of  vertical  agreements.  Respondents  mentioned  that  the  absence  of  the  VBER  and  the 
Vertical  Guidelines  would  result  in  uncertainty,  which  could  discourage  them  from 

68 

 
entering  into  certain  supply  and  distribution  agreements  and  reduce  their  incentives  to 
invest,  thus  slowing  down  innovation  to  the  detriment  of  consumers.  In  addition,  this 
would  lead  to  higher  compliance  and  legal  costs,  as  well  as  a  likely  decrease  in 
harmonisation  among  Member  States,  as  there  could  be  an  increase  in  differing 
interpretations of Article 101 of the Treaty by NCAs and national  courts. A number of 
respondents  also  highlighted  that  the  VBER  and  the  Vertical  Guidelines  are  closely 
linked, so that withdrawing the Vertical Guidelines while maintaining the VBER would 
undermine its effectiveness. 

A majority of the respondents to the public consultation also indicated that renewing the 
VBER  and maintaining the Vertical  Guidelines  without any  change  would  have effects 
for them, either negative or positive. Among these respondents, many indicated that the 
renewal of the current rules without any change would be preferable to letting the VBER 
lapse and withdrawing the Vertical Guidelines, as this would have the positive effect of 
ensuring at least a minimum level of legal certainty. A significant number of respondents, 
however, also indicated that the renewal of the current rules without change would have 
negative effects, since the current rules are not adapted to the market developments that 
have occurred since the adoption of the VBER and the Vertical Guidelines in 2010. 

In light of the above, from the perspective of the respondents to the public consultation, 
there is a continued need for legal certainty and for a common framework for NCAs and 
national  courts.  However,  the  respondents  consider  that  the  VBER,  together  with  the 
Vertical Guidelines, may no longer be able to meet these needs unless it is revised to take 
account of the market developments that occurred since its adoption in 2010. 

The need for a revision of the VBER to reflect major supply and distribution trends, as 
well as changes to supply and distribution practices during recent years was highlighted 
by  a  large  majority  of  the  respondents,  whereas  an  even  higher  number  of  respondents 
indicated that the Vertical Guidelines also need to be revised in light of major trends and 
changes in recent years. Respondents pointed to a number of areas that need revision, as 
well as the major trends and changes motivating the need for such a revision. Different 
stakeholder  groups  among  the  respondents  mentioned  different  areas  with  varying 
degrees of importance and not all stakeholder groups have the same view as to what they 
believe  the  revision  should  look  like  in  practice  to  meet  their  needs.  These  views  are 
addressed per area in more detail in section 5.3 below and in Annex 4.  

Despite  the  divergence  of  views,  a  high  number  of  respondents  pointed  to  a  perceived 
need  for  a  revision  of  the  guidance  concerning  online  sales  and  online  advertising 
restrictions,  due  to  the  increasing  importance  of  online  sales,  including  sales  through 
online  platforms  (including  marketplaces)  and  the  increasing  importance  of  online 
advertising. A high number of respondents also pointed to a perceived need for a revised 
approach  to  hardcore  restrictions  in  the  context  of  selective  distribution  and  to  the 
guidance  provided  in  the  Vertical  Guidelines  on  this  topic,  due  to  the  increasing 
prevalence  of  selective  distribution  in  the  EU  across  a  variety  of  sectors.  Another  area 
that many respondents perceived as needing revision relates to resale price maintenance 
(which is considered a hardcore restriction under the VBER) and the related guidance in 
the Vertical Guidelines. This is due to several reasons, such as the increasing use of price 

69 

 
monitoring  software  and  pricing  algorithms  by  market  players,  free-riding  concerns,  as 
well  as  potential  efficiencies  stemming  from  resale  price  maintenance  and  the  current 
economic  thinking  on  this  topic.  Respondents  also  mentioned  other  areas  where  they 
perceive a need for a revision.121 

Finally, a large majority of the respondents to the public consultation also indicated that 
there  are  areas  for  which  the  VBER,  together  with  the  Vertical  Guidelines,  does  not 
provide  any  guidance  and  that this  would  be  desirable  to  ensure  that  the  rules  remain 
relevant  and  able  to  meet  their  objectives.  In  particular,  they  mentioned  retail  parity 
clauses,  restrictions  on  the  use  of  online  search  advertising  and  price  comparison 
websites, vertical  exchanges of information between  competitors (e.g. in  the context  of 
dual  distribution),  territorial  supply  constraints  and  the  practice  of  retail  channelling.122 
The views of the respondents in this regard, as well as the underlying reasons mentioned, 
are addressed per area in more detail in section 5.3 below and in Annex 4.  

Participants  in  the  stakeholder  workshop  confirmed that the  VBER,  together with  the 
Vertical  Guidelines,  remain  relevant  tools  for  self-assessing  the  compliance  of  vertical 
agreements  with  Article  101  of  the  Treaty.  They  also  discussed  a  number  of  areas  for 
which,  in  their  view,  the  rules  are  currently  not  functioning  well  and  would  therefore 
warrant  a  revision  to  ensure  that  they  remain  relevant  for  the  future.  Participants 
discussed in particular agency agreements, dual distribution, the market share thresholds, 
price-related  restrictions,  issues  related  to  online  distribution,  selective  and  exclusive 
distribution,  franchising,  non-compete  obligations  and  access  to  data. 123  The  views 
expressed  by  participants  in  the  stakeholder  workshop  are  addressed  per  area  in  more 
detail in section 5.3 below and in Annex 4.  

National  Competition  Authorities  also  generally  confirmed  that  the  VBER,  together 
with the Vertical Guidelines, remains useful in view of the current needs (i.e. the need for 
legal  certainty  and  for  a  common  framework  of  assessment  for  NCAs  and  national 
courts) and should therefore be maintained. In addition, the high level of enforcement by 
NCAs  in  this  area,  as  set  out  in  section  5.1.4  above,  suggests  that  the  objective  of 
providing  a  common  framework  for  the  assessment  of  the  compliance  of  vertical 
agreements with Article 101 of the Treaty was (and remains) relevant.  

While  the  objectives  of  the  rules  remain  relevant,  NCAs  also  pointed  to  a  number  of 
market  developments  that  are  currently  not  reflected  in  the  VBER  or  the  Vertical 
Guidelines.  In particular, new forms  of distribution have emerged, due to  the increased 
importance of online sales and new players (e.g. online platforms) that are now active on 
many markets. These market developments have influenced and changed the behaviour 
of  market  participants  and  consumers.  They  therefore  justify  a  revision  of  the  VBER, 
together with the Vertical Guidelines, in particular to give guidance on the assessment of 

121  For more details, see Annex 2, section 2.2. 
122  Retail  channelling  is  a  practice  by  which  suppliers  grant  access  to  "top  tier"  products  only  to  certain 

distributors, especially in the context of a selective distribution network. 

123  For more details, see Annex 2, section 2.4. 

70 

 
                                                           
new vertical practices, so that these rules continue to meet their objectives. The views of 
the NCAs are addressed per area in more detail in section 5.3 below and in Annex 4. 

5.2.4.  Coherence 

Evaluation Question 9 – Is the VBER, together with the Vertical Guidelines, coherent 
with  other  Commission  instruments  that  provide  guidance  on  the  interpretation  of 
Article  101  of  the  Treaty  and  with  other  EU  legislation  with  relevance  for  vertical 
supply and distribution agreements?  

What is the issue? 

When assessing the coherence of the VBER, together with the Vertical Guidelines, both 
other Commission rules and guidance on the application of Article 101 of the Treaty and 
other EU legislation with relevance for vertical supply and distribution agreements have 
to be taken into account. 

As regards other Commission rules and guidance on the application of Article 101 of the 
Treaty,  there  are  a  number  of  guidelines,  notices  and  other  block  exemptions,  many  of 
which  touch  upon  concepts  and  issues  also  dealt  with  in  the  VBER  and  the  Vertical 
Guidelines. For example, the Article 81(3) Guidelines provide additional guidance on the 
application of the four conditions of Article 101(3) of the Treaty and therefore also apply 
for the purposes of carrying out individual assessments of vertical agreements covered by 
the  Vertical  Guidelines. 124 The  MVBER  is  also  closely  related  to  the  VBER,  as  the 
exemption  it  grants  is  conditional  upon  agreements  fulfilling  the  requirements  for  an 
exemption  under  the  VBER,  in  addition  to  further  sector-specific  conditions. 125 
Similarly,  the  Horizontal  Guidelines 126  and  the  Guidelines  on  Technology  Transfer 
Agreements, 127  together  with  the  respective  block  exemption  regulations,  contain 
references  to  both  the  VBER  and  the  Vertical  Guidelines,  even  though  they  apply  to 
different types of agreements. 

In  addition,  it  is  necessary  to  assess  whether  other  EU  legislation  with  relevance  for 
vertical supply and distribution agreements is coherent with the VBER, together with the 
Vertical  Guidelines.  In  this  regard,  there  are  in  particular  two  regulations  to  be 
considered, to the extent that they interact with the VBER.  

First,  the Geo-blocking  Regulation, which addresses unjustified geo-blocking and other 
forms  of  discrimination  based  on  customers'  nationality,  place  of  residence  or  place  of 

124  Communication  from  the  Commission,  Notice  -  Guidelines  on  the  application  of  Article  81(3)  of  the 

Treaty, OJ C 101, 27.4.2004, p. 97-118. 

125  For further details on the MVBER, see section 1.2 above. 
126  Communication from the Commission, Guidelines on the applicability of Article 101 of the Treaty on 
the  Functioning  of  the  European  Union  to  horizontal  co-operation  agreements  ("Horizontal 
Guidelines"), OJ C 11, 14.1.2011, p. 1-72  

127  Communication from the Commission, Guidelines on the application of Article 101 of the Treaty on the 
Functioning  of  the  European  Union  to  technology  transfer  agreements  ("Guidelines  on  Technology 
Transfer Agreements"), OJ C 89, 28.3.2014, p. 3. 

71 

 
                                                           
establishment.128 This  Regulation  complements  EU  competition  law  by  also  catching 
(unilateral) geo-blocking measures that are not covered by Article 101 of the Treaty. The 
general  non-discrimination  provision  of  the  Regulation  does  not  apply  to  certain  non-
audiovisual  electronically  supplied  services  that  offer  copyright-protected  content  (see 
Article  4(1)  of  the  Geo-blocking  Regulation),  while  audiovisual  services  are  fully 
excluded  from  its  scope.  The  Geo-blocking  Regulation  contains  a  specific  reference  to 
the VBER, with regard to the possible relationship of the prohibitions of the Regulation 
applicable  to  traders  and  possible  vertical  agreements  with  their  suppliers. 129  In 
particular,  the  impact  of  the  Geo-blocking  Regulation  on  vertical  agreements  between 
suppliers  and  traders  is  limited  to  passive  sales  restrictions  as  defined  in  the  VBER, 
together  with  the  Vertical  Guidelines  (hence  excluding  active  sales  restrictions;  see 
Article 6(1) of the Geo-blocking Regulation). Moreover, in order to prevent any possible 
circumvention of the new rules, Article 6(2) of the Geo-blocking Regulation clarifies that 
passive  sales  restrictions  (within  the  meaning  of  the  VBER)  imposing  contractual 
obligations in contrast with the specific prohibitions of the Geo-blocking Regulation are 
automatically void. This means that there is no longer a possibility to invoke efficiencies 
with regard to such practices (in contrast to what was so far allowed in the context of an 
individual  assessment  under  Article  101(3)  of  the  Treaty  for  a  very  limited  group  of 
passive sales restrictions).130  

Second,  the  Platform-to-Business  Regulation  regulates  certain  aspects  of  the  (vertical) 
relationship between online platforms and their business users, as well as between online 
search  engines  and  corporate  website  users,  in  particular  unfair  practices,  transparency 
and redress possibilities.131  

What are the findings? 

The evidence gathered in the evaluation shows that the VBER, together with the Vertical 
Guidelines,  is  overall  coherent  both  with  other  Commission  rules  and  guidance  on  the 
application  of  Article  101  of  the  Treaty,  as  well  as  with  other  EU  legislation  with 
relevance  for  vertical  supply  and  distribution  agreements.  Nevertheless,  stakeholders 
pointed to a few areas in which coherence is not as high as it could be due to a lack of 
clarity  or  perceived  inconsistencies  between  certain  rules.  In  particular,  the  perceived 
lack  of  coherence  of  the  VBER,  together  with  the  Vertical  Guidelines,  with  the  Geo-

128  Regulation  (EU)  2018/302  of  the  European  Parliament  and  of  the  Council  of  28  February  2018  on 
addressing unjustified geo-blocking and other forms of discrimination based on customers' nationality, 
place of residence or place of establishment within the internal market and amending Regulations (EC) 
No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC ("Geo-blocking Regulation"), OJ L 60I, 
2.3.2018, p. 1. 

129  For  further  details,  see  Q&A  documents  prepared  by  the  Commission  services,  in  particular  section 
2.5.,  available  at  https://ec.europa.eu/digital-single-market/en/news/geo-blocking-regulation-questions-
and-answers.  

130  See Article 6(2) and recital 34 of the Geo-blocking Regulation. 
131  Regulation  (EU)  2019/1150  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on 
promoting fairness and transparency for business users of online intermediation services ("Platform-to-
Business Regulation"), OJ L 186, 11.7.2019, p. 57. 

72 

 
                                                           
blocking Regulation comes from the fact that the latter prohibits certain practices, which 
is a legislative choice, which could be further clarified when considering any next steps 
that may follow the evaluation. 

A large majority of the respondents to the public consultation indicated that the VBER, 
together  with  the  Vertical  Guidelines,  is  coherent  with  other  Commission  rules  and 
guidance  on  the  interpretation  of  Article  101  of  the  Treaty.  The  few  respondents  who 
considered  that  there  is  a  lack  of  coherence  pointed,  for  example,  to  the  assessment  of 
information  exchanges  in the context  of dual  distribution under the Vertical  Guidelines 
and  the  Horizontal  Guidelines,  perceived  inconsistencies  between  the  various  block 
exemptions  as  regards  the  definition  of  potential  competitors,  and  difficulties  with 
identifying  the  dividing  line  between  the  different  block  exemptions.  The  few  issues 
raised  by  those  respondents  are  addressed  per  area  in  more  detail  in  section  5.3  below 
and in Annex 4. Respondents also expressed concerns regarding diverging interpretations 
of  the  VBER  and  the  Vertical  Guidelines  by  NCAs  and  national  courts.  This  issue  is 
assessed in more detail under the criterion of effectiveness in section 5.2.1 above.  

The respondents to the public consultation had more nuanced views as regards coherence 
with  other  existing  and/or  upcoming  EU  legislation,  with  the  number  of  positive  and 
negative  replies  being  essentially  the  same.  A  few  respondents  (mainly  legal 
professionals  and  business  associations)  expressed  concerns  regarding  possible 
inconsistencies  with  the  Geo-blocking  Regulation,  such  as  the  perception  that  some 
restrictions of passive sales are allowed under the VBER but not under the Geo-blocking 
Regulation.  Respondents  indicated  that  guidance  on  the  interaction  between  the  two 
pieces  of  legislation  is  currently  insufficient.  A  few  respondents  also  mentioned 
perceived  inconsistencies  with  the  Platform-to-Business  Regulation,  in  particular  as 
regards  the  treatment  of  parity  clauses.  Furthermore,  the  franchise  sector  pointed  to 
perceived  inconsistencies  with  the  Directive  on  the  protection  of  trade  secrets. 132 
Respondents also indicated that there are perceived inconsistencies between the VBER, 
together with the Vertical Guidelines, and some national legislation, such as the French 
Commercial Code or national laws relating to franchising. A few respondents mentioned 
as  well  perceived  inconsistencies  with  the  De  Minimis  Notice,  e.g.  as  regards  the 
exceptions to the rules on resale price maintenance set out in the Vertical Guidelines but 
not  in  the  De  Minimis  Notice.  Finally,  a  few  respondents  mentioned  that  the  VBER, 
together with the Vertical Guidelines, has an effect on the fundamental rights to property 
and freedom of profession. These issues are addressed per area in more detail in section 
5.3 below and in Annex 4.  

National Competition Authorities also generally consider that the VBER, together with 
the  Vertical  Guidelines,  is  coherent  with  other  Commission  rules  and  guidance  on  the 
application  of  Article  101  of  the  Treaty.  NCAs  however  mentioned  that  the  VBER, 
together  with  the  Vertical  Guidelines,  may  be  affected  by  the  Platform-to-Business 

132  Directive (EU) 2016/943 of the European Parliament and the Council of 8 June 2016 on the protection 
of  undisclosed  know-how  and  business  information  (trade  secrets)  against  their  unlawful  acquisition, 
use and disclosure ("Directive on the protection of trade secrets"), OJ L 157, 15.6.2016, p. 1. 

73 

 
                                                           
Regulation.  Consequently,  any  revision  of  the  rules  should  take  into  account  the 
Platform-to-Business  Regulation,  to  ensure  that  both  pieces  of  legislation  complement 
and do not contradict each other. 

5.2.5.  EU added value 

Evaluation Question 10 – Does the VBER, together with the Vertical Guidelines, as an 
intervention  at  EU  level,  add  value  in  the  assessment  of  the  compatibility  of  vertical 
agreements with Article 101 of the Treaty? 

What is the issue? 

When  assessing  whether  the  VBER,  together  with  the  Vertical  Guidelines,  as  an 
intervention  at  EU  level,  provides  added  value,  it  has  to  be  taken  into  account  that 
competition law is an area where the EU has exclusive competence. This means that the 
EU alone is allowed to legislate and adopt binding acts in this area, whereas the Member 
States  are  only  allowed  to  legislate  if  empowered  by  the  EU  to  implement  these  acts. 
Moreover,  the  Empowerment  Regulation  of  1965  grants  only  the  Commission,  and  not 
the Member States, the power to adopt block exemption regulations for certain categories 
of vertical agreements.  

Therefore, in the absence of the VBER and the Vertical Guidelines, which is the relevant 
point  of  comparison  for  the  assessment,  stakeholders  would  be  deprived  of  the  safe 
harbour that only an EU intervention can provide. They would therefore have to rely on 
other  instruments  for  the  purpose  of  self-assessing  the  compliance  of  their  vertical 
agreements with Article 101 of the Treaty, instead of being able to rely on a simpler set 
of rules. 

What are the findings? 

The  evidence  gathered  in  the  evaluation  suggests  that  the  VBER,  together  with  the 
Vertical Guidelines, provides EU added value. Since it provides a safe harbour from EU 
competition law, which can only be granted at EU level, the VBER offers increased legal 
certainty and guidance as compared to existing, more general and nationally fragmented 
guidance on the application of Article 101 of the Treaty.  

A  very  large  majority  of  the  respondents  to  the  public  consultation  indicated  that  the 
VBER,  together  with  the  Vertical  Guidelines,  provides  clear  added  value.  This  is  in 
particular  because  the  VBER,  together  with  the  Vertical  Guidelines,  provides  a 
harmonised  approach  for  the  assessment  of  vertical  agreements  throughout  the  EU, 
which  contributes  to  increased  legal  certainty.  Respondents  also  explained  that  
self-assessing  compliance  with  Article  101  of  the  Treaty  in  the  absence  of  the  VBER, 
together  with  the  Vertical  Guidelines,  would  be  more  costly  and  administratively 
burdensome.  Especially  for  businesses  doing  business  across  the  EU,  having  a 
harmonised  approach  can  significantly  reduce  compliance  costs  and  contribute  to 
avoiding market fragmentation, which would impede cross-border trade in the European 
Single Market.  

74 

 
Respondents to the public consultation nevertheless indicated that the value provided by 
the VBER and the Vertical Guidelines would be increased if the rules were updated and 
revised, in particular to reflect recent market developments.  

National Competition Authorities also generally consider that the VBER, together with 
the Vertical Guidelines, provides clear added value for the assessment of the compliance 
of  vertical  agreements  with  Article  101  of  the  Treaty.  Therefore,  allowing  the  VBER, 
together  with  the  Vertical  Guidelines,  to  lapse  would  seriously  undermine  the  level  of 
harmonisation achieved in the enforcement of Article 101 of the Treaty across the EU. 

5.3. Overview  of  the  areas  in  which  the  VBER,  together  with  the  Vertical 
Guidelines, is perceived as not functioning well or not functioning as well as 
it could 

This  section  sets  out  the  areas  for  which  the  evaluation  has  shown  that  the  VBER, 
together with the Vertical Guidelines, is not functioning well or not functioning as well 
as it could, including the underlying reasons. A clarification or a revision of the approach 
in  those  areas  could,  according  to  the  stakeholders  who  contributed  to  the  evaluation, 
help  increase  the  effectiveness  and  relevance  of  the  VBER,  together  with  the  Vertical 
Guidelines, as well as its efficiency and coherence in certain of those areas.133 A detailed 
analysis per area can be found in Annex 4 to the Staff Working Document. 

The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  vertical 
agreements  generally  falling  outside  the  scope  of  Article  101(1)  of  the  Treaty  (see    
section 4.1 in Annex 4). 

Vertical agreements generally falling outside the scope of 
Article 101(1) of the Treaty 

Agreements of minor importance and agreements between 
small and medium-sized enterprises 

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1 

2 

Paragraphs 8-11 VGL provide an appropriate level of legal 
certainty 

✔ 

Issues of consistency with the De Minimis Notice adopted in 
2014, the Effect on Trade Guidelines and relevant case law 
(notably the CJEU’s Expedia judgment) 

✔  ✔ 

✔ 

133  In the below tables, effectiveness is  marked for all issues that pertain to how the intervention  met its 
objectives.  Efficiency  is  marked  for  all  issues  that,  by  reducing  the  level  of  effectiveness  of  the 
intervention,  therefore  also  reduce  its  efficiency.  Relevance  is  marked  for  all  issues  that  support  the 
finding that the objectives of the  intervention are  still relevant,  notably those related to recent  market 
developments. Coherence is marked for all issues that affect the level of coherence of the intervention. 

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Vertical agreements generally falling outside the scope of 
Article 101(1) of the Treaty 

Subcontracting agreements 

Paragraph 22 VGL provides an appropriate level of legal 
certainty 

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E

✔ 

Lack of clarity regarding the interplay of the VGL with the 
Subcontracting Notice  

✔  ✔ 

✔ 

Agency agreements 

Stakeholders generally agree with the fact that all obligations 
imposed on the agent in relation to the contracts concluded 
and/or negotiated on behalf of the principal fall outside Article 
101(1) of the Treaty 

✔ 

Lack of clarity concerning the level and type of risks that are 
relevant to determine whether a vertical agreement can be 
considered a genuine agency agreement 

✔  ✔ 

Issues regarding the application of the agency exception to 
online platforms 

✔  ✔  ✔ 

Issues related to the possibility of applying the agency 
exception to tripartite relationships between suppliers, 
intermediaries and final customers 

✔  ✔  ✔ 

Issues as regards the relationship between the principal and 
the agent, in particular the duration of non-compete clauses 
that may benefit from the VBER and the possibility to impose 
requirements other than those listed in paragraph 18 VGL 

✔  ✔ 

3 

4 

5 

6 

7 

8 

9 

The table below  lists the issues  identified by the  evaluation  as regards the scope of the 
exemption set out in Articles 1 and 2 of the VBER (see section 4.2 in Annex 4). 

Scope of the exemption 

Definition of vertical agreements 

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1 

The definition of vertical agreements in Article 1(1)(a) VBER, 
as further specified in the VGL, has worked well 

✔ 

76 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Scope of the exemption 

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2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

However, lack of clarity of some aspects of the definition 

✔  ✔ 

Other aspects of the definition are not well suited to capture 
the relationship between new online intermediaries and their 
users 

✔  ✔  ✔ 

Agreements between associations and their members 

Article 2(2) VBER and the corresponding paragraphs of the 
VGL provide an appropriate level of legal certainty 

✔ 

Stakeholders questioned the appropriateness of the thresholds 
set out in Article 2(2) VBER and paragraph 29 VGL 

✔  ✔ 

Lack of clarity on whether joint purchasing agreements 
between independent retailers are generally considered as pro-
competitive 

✔  ✔ 

Issues with the limitation of the exemption to associations of 
retailers distributing goods 

✔  ✔ 

Insufficient guidance on the fact that the exemption for these 
agreements only applies if also the criteria of Articles 3 to 5 
VBER are met and if there are no horizontal concerns 

✔  ✔ 

Agreements containing provisions on IPRs 

Article 2(3) VBER and the corresponding paragraphs of the 
VGL provide an appropriate level of legal certainty 

✔ 

Lack of guidance on various types of IPR agreements that are 
not covered by the VBER, nor any other block exemption 

✔  ✔ 

Lack of guidance on field-of-use restrictions in vertical 
distribution agreements 

✔  ✔ 

Dual distribution 

The qualification of dual distribution as a vertical relationship 
and its exemption from the prohibition of Article 101(1) of the 
Treaty is adequate and should remain part of the VBER  

✔ 

However, Article 2(4) VBER and the corresponding 
paragraphs of the VGL provide either a slightly low or a very 
low level of legal certainty  

Insufficient clarity as to whether information exchanges in 
dual distribution scenarios are to be treated as vertical 

✔  ✔ 

✔  ✔ 

77 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
s
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Scope of the exemption 

restrictions and can thus be considered as covered by the 
VBER, and as regards the extent and under which conditions 
information exchanges in dual distribution scenarios are 
admissible/problematic 

15 

Issues with the fact that Article 2(4)(a) VBER limits the 
exemption for dual distribution to manufacturers distributing 
goods downstream, thus excluding wholesalers or independent 
importers who are also active in the downstream market from 
the benefit of the VBER 

✔  ✔ 

16 

Issues as regards the interplay with the Horizontal Guidelines  ✔  ✔ 

✔ 

17 

18 

19 

20 

21 

Lack of clarity as to whether agreements between a 
manufacturer and a retailer that sells private label goods 
produced by third parties are covered by the VBER 

✔  ✔ 

Issues with the fact that the increase of direct sales by 
manufacturers has an impact on the viability of the 
investments distributors are required to make  

✔  ✔  ✔ 

Issues as regards the definition of the concept of potential 
competitor set out in paragraph 27 VGL 

✔  ✔ 

✔ 

Issues with regard to the relationship between hybrid online 
platforms and the sellers present on such platforms, and 
whether they should be covered by Article 2(4) VBER 

✔  ✔  ✔ 

Insufficient clarity as regards the conditions under which the 
exemption for dual distribution applies to service providers 

✔  ✔ 

The table below lists the issues identified by the evaluation as regards the market share 
thresholds (see section 4.3 in Annex 4). 

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✔ 

Market share thresholds for the supplier and the buyer  

1 

The market share thresholds set out in Article 3 VBER, as 
further specified in the corresponding paragraphs of the VGL, 
provide an appropriate level of legal certainty and should 
therefore continue to apply 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market share thresholds for the supplier and the buyer  

Application of the market share thresholds 

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2 

3 

4 

5 

6 

7 

Lack of clarity and consistency with regard to the definition of 
the relevant market as businesses and NCAs cannot rely on a 
uniform set of rules and precedents 

✔  ✔ 

Issues regarding the suitability of the current rules to 
determine relevant markets in emerging online markets or 
when online intermediaries are involved 

✔  ✔  ✔ 

Difficulties to assess the market shares of the supplier and the 
buyer, especially for online platforms 

✔  ✔  ✔ 

Substantive issues in relation to the market share thresholds 

Issues regarding the assessment of the market share threshold 
for both the supplier and the buyer, which can be challenging 
and costly or not well adapted to capture vertical relations in 
oligopolistic markets 

✔  ✔ 

Market share thresholds can lead to false positives (e.g. too 
high when applied to online intermediaries or not an accurate 
indicator of market power in digital technology sectors) 

✔  ✔ 

Market share thresholds can lead to false negatives (e.g. too 
low as they exclude efficiency-enhancing agreeements 
between non-dominant companies from the benefit of the 
VBER) 

✔  ✔ 

The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  the  concept  of 
hardcore restrictions and excluded restrictions (see sections 4.4 and 4.5 in Annex 4). 

The concept of hardcore and excluded restrictions 

The concept of hardcore restriction 

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1 

2 

Issues with regard to the clarity of the concept of hardcore 
restriction 

Lack of guidance on the specific legal and economic 
circumstances under which hardcore restrictions could be 
considered as satisfying the conditions of Article 101(3) of the 

✔  ✔ 

✔  ✔ 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
The concept of hardcore and excluded restrictions 

Treaty 

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4 

5 

Mixed evidence as regards the scope of the list of hardcore 
restrictions set out in Article 4 VBER (i.e. false positives and 
false negatives) 

✔  ✔ 

The concept of excluded restriction 

The concept of excluded restriction is sufficiently clear 

✔ 

Lack of clarity regarding the framework of assessment for 
excluded restrictions (restrictions by object or by effect) 

✔  ✔ 

The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  Resale  Price 
Maintenance (see section 4.6.1 in Annex 4). 

Resale Price Maintenance (RPM) 

Article 4(a) VBER and the corresponding paragraphs of the 
VGL generally provide an appropriate level of legal certainty 

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Limited guidance on the circumstances under which 
recommended or maximum resale prices could amount to 
RPM, which results in a lack of legal certainty 

✔  ✔ 

Lack of clarity as regards the conditions under which RPM 
can benefit from the exemption of Article 101(3) of the Treaty 

✔  ✔ 

Lack of coherence in the treatment of RPM across the EU 
given that NCAs partly pursue divergent approaches to novel 
implementations of RPM 

Mixed evidence regarding the classification of RPM as a 
hardcore restriction according to the VBER 

✔  ✔ 

✔  ✔ 

1 

2 

3 

4 

5 

80 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  territorial  and 
customer restrictions (see section 4.6.2 in Annex 4). 

Territorial and customer restrictions 

Stakeholders consider that Article 4(b) VBER and the 
corresponding paragraphs of the VGL provide an appropriate 
level of legal certainty 

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✔ 

Lack of clarity of the structure and the wording of Article 4(b) 
VBER as well as the corresponding paragraphs of the VGL 

✔  ✔ 

Specific findings relating to customer restrictions 

Lack of consistency between the different language versions 
of the VBER 

✔  ✔ 

Lack of definition of the concept of customers and its scope   ✔  ✔ 

Lack of basis in the case law for subjecting customer 
restrictions to the same strict test as territorial restrictions 

✔  ✔ 

Specific findings relating to territorial restrictions  

Lack of clarity of the rules on territorial restrictions 

Need to enforce the prohibition on territorial restrictions more 
vigorously  

✔  ✔ 

✔  ✔ 

Lack of consistency between the VBER and the Geo-blocking 
Regulation 

✔  ✔ 

✔ 

1 

2 

3 

4 

5 

6 

7 

8 

The table below lists the issues identified by the evaluation as regards parity clauses (see 
section 4.6.3 in Annex 4). 

Parity clauses 

Increased use of retail parity clauses over the last ten years 

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✔ 

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VBER and VGL do not provide sufficient guidance on how to 
assess the compatibility of retail parity clauses with Article 
101 of the Treaty 

✔  ✔ 

1 

2 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Parity clauses 

3 

4 

Divergent treatment of retail parity clauses by NCAs 

Perceived lack of coherence with the P2B Regulation 

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✔ 

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✔ 

The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  non-compete 
obligations (see section 4.6.4 in Annex 4). 

Non-compete obligations (Article 5 of the VBER) 

Article 5 VBER provides an appropriate level of legal 
certainty 

Issues with Article 5(1)(b) VBER excluding non-compete 
clauses exceeding five years from the benefit of the VBER, 
which seems too broad and results in an unjustified burden for 
businesses 

Issues with Article 5(1)(b) VBER excluding post-term non-
compete from the benefit of the VBER, which seems too 
broad 

Issues with the cumulative conditions for the derogation 
regarding post-term non-compete clauses, which appear 
outdated and too narrowly defined  

Issues with Article 5(1)(c) VBER excluding non-compete 
obligation imposed on members of selective distribution 
system from the benefit of the VBER, which appears 
unjustified 

1 

2 

3 

4 

5 

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✔ 

✔  ✔ 

✔  ✔ 

✔  ✔ 

✔  ✔ 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  exclusive 
distribution (see section 4.6.5 in Annex 4). 

Exclusive distribution 

Paragraphs 151-167 VGL provide an appropriate level of 
legal certainty 

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The rules are not sufficiently flexible as regards the exception 
set out in Article 4(b)(i) VBER   

✔  ✔ 

Lack of guidance or limitation with regard to the size or scope 
of the exclusive territory or customer group 

✔  ✔ 

Issues with the fact that the rules allow the restriction of active 
sales by a buyer, but only where such a restriction does not 
limit sales by the customers of the buyer 

✔  ✔ 

Lack of clarity regarding the possibility to combine selective 
and exclusive distribution in the same territory at different 
levels of the supply chain or in different territories 

✔  ✔ 

1 

2 

3 

4 

5 

The  table  below  lists  the  issues  identified  by  the  evaluation  as  regards  selective 
distribution (see section 4.6.6 in Annex 4). 

Selective distribution 

Unanimous confirmation of the significant increase in the use 
of selective distribution at different levels of the vertical 
supply and distribution chain 

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✔ 

Level of legal certainty provided by the VBER and the VGL 
is overall acceptable, although clarifications are needed for 
some areas  

✔  ✔ 

Stakeholders have very diverse opinions about the effects of 
selective distribution systems on competition 

✔  ✔ 

Stakeholders questioned the appropriateness of the level of the 
market share thresholds in the context of selective distribution 
systems  

✔  ✔ 

Issue regarding the functioning of the market share threshold 
and the willingness of businesses to set up pan-European 

✔  ✔ 

83 

1 

2 

3 

4 

5 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selective distribution 

selective distribution systems  

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6 

7 

8 

9 

Article 4(b)(iii) VBER does not provide sufficient legal 
certainty 

Paragraph 63 VGL, which allows restrictions on active sales 
within a selective distribution system under certain conditions, 
does not provide sufficient legal certainty 

The case law and enforcement practice with regard to 
selective distribution has developed significantly 

NCAs have not always assessed the compatibility of selective 
distribution systems with Article 101 of the Treaty in a 
consistent manner 

✔  ✔ 

✔  ✔ 

✔  ✔ 

✔  ✔ 

10  VBER and VGL lack guidance on the resale of spare parts  

✔  ✔ 

Specific findings related to online sales 

11  Low level of legal certainty concerning paragraphs 52-54 

VGL 

12  Variety of views among stakeholders on the effects of the 

brick-and-mortar requirement 

13  Paragraph 54 VGL is not sufficiently clear as to whether 
quality standards for the use of the internet may also be 
imposed in distribution systems other than selective 
distribution 

✔  ✔  ✔ 

✔  ✔ 

✔  ✔ 

14  Concerns as regards the functioning of the equivalence 

principle enshrined in paragraph 56 VGL 

✔  ✔  ✔ 

15  Lack of legal certainty in relation to the possibility to 

withdraw the benefit of the VBER in certain cases (paragraph 
176 VGL) 

✔  ✔ 

16  Lack of effectiveness of the withdrawal procedure in the 

context of cumulative effects resulting from parallel selective 
distribution networks (paragraph 179 VGL) 

✔  ✔ 

17  Lack of guidance on the assessment of restrictions on sales 
through third-party online marketplaces and the need to 
update the rules in light of recent case law 

✔  ✔  ✔ 

18  Divergences in the assessment by NCAs of restrictions on the  ✔  ✔  ✔ 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selective distribution 

use of online marketplaces 

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19  Lack of guidance on the assessment of restrictions on the use 
of price comparison websites and the need to update the rules 
in light of recent case law 

✔  ✔  ✔ 

The table below lists the issues identified by the evaluation in the context of other online 
sales restrictions (see section 4.6.7 in Annex 4). 

Other online sales restrictions  

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2 

3 

4 

5 

6 

7 

8 

Slightly low or low legal certainty of the VBER as regards 
online sales restrictions and need to update the rules in light of 
market developments  

✔  ✔  ✔ 

General comments  

No dedicated VBER section dealing with online sales 
restrictions, which reduces legal certainty 

✔  ✔  ✔ 

Lack of precision on internet related issues of the VGL, which 
causes legal uncertainty 

✔  ✔  ✔ 

Dual pricing 

Lack of clarity of the definition of dual pricing referred to in 
the Vertical Guidelines 

✔  ✔ 

Need for clarification of the rules on dual pricing to avoid an 
inconsistent application throughout the EU 

✔  ✔ 

Lack of suitability of specific aspects of the approach to dual 
pricing with regard to the current market environment due to 
new market developments 

✔  ✔  ✔ 

Issues with the fixed fee that a supplier can offer to support 
the (offline or online) sales efforts of a distributor, which 
appears not workable in practice 

✔  ✔ 

Need for guidance in the VGL on the criteria that could be 
used to perform an individual assessment  

✔  ✔ 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other online sales restrictions  

s
s
e
n
e
v
i
t
c
e
f
f

E

y
c
n
e
i
c
i
f
f

E

e
c
n
a
v
e
l
e
R

e
c
n
e
r
e
h
o
C

9 

10 

11 

12 

Definition of active and passive sales regarding online sales 

Lack of clarity of the current distinction between active and 
passive sales regarding online sales 

✔  ✔ 

Issues with the distinction between active and passive sales, 
which appears not to work well and not up to date with regard 
to the development of e-commerce  

✔  ✔  ✔ 

Issues with the prohibition of passive sales restrictions, which 
appears too strict and can lead to false negatives by excluding 
efficiency-enhancing practices from the benefit of the VBER  

✔  ✔ 

Need to preserve coherence between the EU rules regarding 
passive sales (notably VBER and Geo-blocking Regulation) 

✔  ✔ 

✔ 

Online restriction on the use of trademarks and brand 
names 

13  Need for more guidance as regard online advertising 

✔  ✔  ✔ 

14 

15 

Need for guidance on the restriction to use trademarks and 
brands names in the context of online advertising 

✔  ✔  ✔ 

Need for more guidance on the ability of retailers to bid on the 
trademarks of certain manufacturers to achieve better listings 
on search engines (brand-bidding restrictions) 

✔  ✔  ✔ 

The table below lists the issues identified by the evaluation in the context of franchising 
(see section 4.6.8 in Annex 4). 

Franchising 

Paragraphs 189-191 VGL provide an appropriate level of 
legal certainty 

y
c
n
e
i
c
i
f
f

E

e
c
n
a
v
e
l
e
R

e
c
n
e
r
e
h
o
C

s
s
e
n
e
v
i
t
c
e
f
f

E

✔ 

Issue related to the lack of a definition of franchising in the 
VBER 

✔  ✔ 

Issues related to the definition of know-how  

✔  ✔ 

✔ 

1 

2 

3 

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
4 

5 

6 

7 

8 

Lack of clarity as regards specific restrictions and their 
application to franchising 

✔  ✔  ✔ 

Issues as regards the application of non-compete obligations 
in the context of franchising 

✔  ✔ 

Issues with regard to the market share threshold in the context 
of franchising 

✔  ✔ 

Lack of clarity as regards the treatment of joint purchasing 
through the franchisor and the treatment of (vertical) 
information exchange in franchise systems 

✔  ✔ 

Insufficient legal certainty with regard to the combination of 
franchising with exclusive distribution 

✔  ✔ 

The  table  below  lists  other  issues  identified  by  the  evaluation  (see  section  4.6.9  in 
Annex 4). 

Other issues 

Data sharing  

s
s
e
n
e
v
i
t
c
e
f
f

E

y
c
n
e
i
c
i
f
f

E

e
c
n
a
v
e
l
e
R

e
c
n
e
r
e
h
o
C

1 

2 

3 

4 

5 

Need to clarify the rules on data collection as well as 
information exchange in supply and distribution agreements 

✔  ✔  ✔  ✔ 

Aftermarkets 

For a large majority of stakeholders Article 4(e) VBER is 
working well 

✔ 

Lack of clarity with regard to certain elements of the provision 
and some difficulties linked to its application  

✔  ✔ 

Withdrawal and disapplication procedure 

Most stakeholders consider that the related provisions provide 
an appropriate level of legal certainty 

✔ 

Lack of clarity, complexity and limited effect of the current 
rules, which explain the lack of application of these 
procedures  

✔  ✔ 

87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.  CONCLUSIONS 

Based  on  the  assessment  developed  in  the  previous  sections,  this  section  presents  the 
conclusions on the evaluation of the VBER, together with the Vertical Guidelines.  

The  substantive  scope  of  the  evaluation  is  the  VBER,  together  with  the  Vertical 
Guidelines,  in  their  entirety.  As  the  Vertical  Guidelines  are  inherently  linked  to  the 
VBER,  insofar  as  they  refer  to  its  provisions  and  inform  their  application  and 
interpretation,  the  assessment  of  the  VBER  must  also  include  the  Vertical  Guidelines. 
Besides,  even  though  the  VBER  and  the  Vertical  Guidelines  adopted  in  2010  are  to  a 
large extent a continuation of the approach taken in 1999, the new market developments 
that  have  taken  place  since  their  adoption  affect  parts  of  the  VBER  and  Vertical 
Guidelines  that  go  beyond  the  specific  provisions  changed  in  2010.  Therefore,  the 
evaluation  does  not  focus  on  the  changes  made  in  2010,  but  covers  the  entirety  of  the 
VBER, together with the Vertical Guidelines.  

The  geographic  scope  of  the  evaluation  extends  to  all  EU  Member  States.  NCAs  and 
national  courts  are  bound  by  the  directly  applicable  provisions  of  the  VBER.  The 
Vertical Guidelines do not bind NCAs or national courts, but they are typically taken into 
account when assessing the compatibility of vertical agreements with Article 101 of the 
Treaty.  Against  this  background,  the  evaluation  of  the  VBER  includes  not  only  the 
decisional  practice  of  the  Commission,  but  also  that  of  the  NCAs  and  the  relevant 
jurisprudence of national courts. 

The  evaluation  is  based  on  evidence  gathered  from  various  sources.  These  include  a 
public  consultation,  a  targeted  consultation  of  NCAs,  a  stakeholder  workshop  and  an 
external  evaluation  support  study,  as  well  as  evidence  gathered  in  the  context  of  other 
Commission initiatives (i.e. its e-commerce sector inquiry, its enforcement experience as 
well as that of the NCAs, and informal guidance provided through policy documents). In 
line with the general objective of the VBER, the evidence-gathering focused primarily on 
the  views  of  other  agencies  enforcing  EU  competition  law  (i.e.  NCAs)  and  businesses 
having to self-assess the compliance of their vertical agreements with Article 101 of the 
Treaty. 

The  evidence-gathering  during  the  evaluation  was  subject  to  certain  limitations,  which 
did not, however, have any meaningful impact on the results of the evaluation.  

First, it was not possible to gather reliable quantitative evidence on VBER related costs 
and  benefits.  Despite  the  attempt  to  overcome  this  limitation  through  the  evaluation 
study,  the  assessment  of  the  efficiency  of  the  VBER,  together  with  the  Vertical 
Guidelines,  essentially  relies  on  qualitative  evidence  provided  by  stakeholders  in 
response to the public consultation and in the context of the evaluation study.  

Second, there was a certain lack of representativeness of stakeholder feedback due to the 
voluntary nature of participation in the public consultation and the stakeholder workshop. 
As  a  result,  some  stakeholder  groups  accounted  for  a  higher  share  of  responses  than 
others.  This  did  not,  however,  have  any  meaningful  impact  on  the  results  of  the 
evaluation  since  the  areas  identified  by  stakeholders  as  either  functioning  well  or  not 

88 

 
functioning  well  did  not  differ  to  an  appreciable  extent  within  a  particular  stakeholder 
group. Moreover, the evaluation study aimed at reducing any potential bias within each 
stakeholder group that could have affected small and medium enterprises. In any event, 
while indicative of a trend, the fact that a view was broadly shared by all or only some of 
the  stakeholder  groups  does  not  mean  that  the  evaluation  disregards  diverging  views. 
This  is  also  reflected  in  Annex  4  to  the  Staff  Working  Document,  which  presents  the 
different  views  and  issues  raised  by  stakeholders,  regardless  of  whether  they  were 
supported by a large or small number of stakeholders.  

Third, there was a lack of information about consumer views, likely due to the fact that 
the  VBER  is  a  technical  piece  of  legislation  and  that  consumers  are  neither  a  party  to 
vertical agreements between actors in the supply and distribution chain, nor privy to the 
conditions that they contain. For the same reasons, the limited participation of consumers 
and consumer associations did not have any meaningful impact on the evaluation.  

Overall, the evidence  gathered in  the evaluation  suggests that the VBER, together with 
the Vertical Guidelines, is useful and remains relevant for stakeholders. Nonetheless, the 
evaluation  has  identified  a  number  of  issues,  in  particular  as  regards  the  clarity  of  the 
rules and their ability to address new market developments, which limit the effectiveness, 
efficiency and coherence of the intervention. 

Effectiveness: The evidence gathered in the evaluation suggests that the VBER, together 
with the Vertical Guidelines, is overall a useful instrument that increases legal certainty. 
Nevertheless, the evaluation identified certain provisions that, according to stakeholders, 
lack clarity, are difficult to apply or no longer adapted to the market developments that 
occurred  since  the  adoption  of  the  VBER  and  the  Vertical  Guidelines  in  2010,  in 
particular  as  regards  the  online  environment.  The  evaluation  also  identified  gaps  in  the 
rules and areas of the rules that do not refer to case law issued since the adoption of the 
rules  (e.g.  the  CJEU’s  Coty  judgment).  Therefore,  the  evidence  suggests  that  the 
objective  of  facilitating  the  enforcement  work  of  the  relevant  authorities  and  the 
stakeholders’ self-assessment  of their vertical agreements  by  providing them  with  legal 
certainty has not been fully met. 

All the sources of evidence used in the evaluation suggest that the VBER, together with 
the  Vertical  Guidelines,  generally  meets  the  objective  of  avoiding  false  positives.  This 
means that it generally does not exempt agreements for which it cannot be assumed with 
sufficient  certainty  that  they  satisfy  the  conditions  of  Article  101(3)  of  the  Treaty. 
Nevertheless, some stakeholders argued that the application of the market share threshold 
to online intermediaries may lead to false positives and that retail parity clauses, online 
platform bans and some restrictions on online advertising should be qualified as hardcore 
restrictions. Other stakeholders, however, did not share these views. The evaluation also 
found that there are vertical restrictions that have become more prevalent over time, for 
which additional guidance is lacking to determine whether they fall under the current list 
of hardcore restrictions. 

The evidence gathered in the evaluation also suggests that the VBER, together with the 
Vertical  Guidelines,  generally  meets  the  objective  of  avoiding  false  negatives.  This 
means that it generally does not fail to exempt agreements that satisfy the conditions of 

89 

 
Article 101(3) of the Treaty. However, some stakeholders  argued that the market  share 
threshold  is  too  low.  Some  stakeholders  also  indicated  that  non-compete  obligations 
exceeding  5  years  should  not  be  an  excluded  restriction.  In  addition,  as  regards  in 
particular the list of hardcore restrictions, the view that the rules avoid false negatives is 
not shared by all stakeholder groups. Whereas NCAs and a number of respondents to the 
public consultation (including a majority of distributors) find this list appropriate, many 
respondents to the public consultation, especially legal professionals, and participants in 
the stakeholder workshop found the list to lead to false negatives. On the other hand, the 
enforcement practice of the Commission and the NCAs since the adoption of the VBER 
generally  confirms  the  treatment  of  certain  vertical  restrictions  as  hardcore  restrictions 
under  the  current  rules.  Overall,  while  the  evidence  therefore  suggests  that  the  lists  of 
hardcore restrictions and excluded restrictions are generally appropriate,  there may still 
be scope in some areas of the rules to further reduce the risk of false negatives. 

The  evidence  gathered  in  the  evaluation  suggests  that  the  VBER,  together  with  the 
Vertical  Guidelines,  is  overall  taken  into  account  by  NCAs  and  national  courts  as  a 
common  framework  of  assessment  for  vertical  agreements.  However,  there  remains 
significant scope for diverging interpretations. The evaluation has identified a perceived 
lack  of  clarity  in  respect  of  certain  provisions,  as  well  as  gaps  in  the  current  rules  (i.e. 
new  types  of  restrictions  not  addressed  by  the  VBER  or  the  Vertical  Guidelines)  that 
have  resulted  in  diverging  interpretations  during  the  last  ten  years.  Such  diverging 
interpretations  have  led  to  a  decreased  level  of  legal  certainty  provided  by  the  VBER, 
together  with  the  Vertical  Guidelines,  and  have  also  affected  the  efficiency  and 
coherence of the rules. 

Efficiency: The evidence gathered during the evaluation was not sufficient to allow the 
Commission to conclude on the costs that stakeholders incur for assessing the application 
of  the  VBER,  together  with  the  Vertical  Guidelines,  to  their  vertical  agreements. 
However, all sources of evidence relied on in the evaluation suggest that those costs are 
proportionate to the benefits brought by the rules, notably the safe harbour from Article 
101  of  the  Treaty  provided  by  the  VBER  and  the  resulting  increase  in  legal  certainty. 
Moreover, the evidence  gathered in  the evaluation  also  suggests that those costs would 
increase  in  the  absence  of  the  VBER  and  Vertical  Guidelines,  especially  for  SMEs.  At 
the same time, the evidence suggests that there is significant room for simplification and 
further cost reduction, notably by reducing the complexity of the wording and structure 
of  the  rules  and  by  updating  the  rules  in  order  to  bring  them  in  line  with  the  current 
needs.  The  fact  that  the  rules  are  not  sufficiently  well  adapted  to  recent  market 
developments  also  seems  to  have impacted the  evolution  of compliance  costs since the 
1999 and 2010 amendments. In this regard, the evidence gathered during the evaluation 
does not allow to conclude clearly on whether the compliance costs have decreased.  

Relevance: The evidence gathered during the evaluation suggests that the VBER and the 
Vertical Guidelines are not sufficiently well adapted to the current market environment, 
as  they  do  not  take  into  account  the  market  developments  that  have  taken  place  since 
their  adoption.  In  particular,  the  evaluation  has  shown  that  since  the  adoption  of  the 
VBER,  together  with  the  Vertical  Guidelines,  the  growth  of  online  sales  and  online 
platforms,  including  online  marketplaces,  has  had  a  significant  impact  on  distribution 

90 

 
models.  In  this  context,  the  evolving  nature  of  platform  business  models  has  led  to  an 
increase  in  the  number  of  contractual  relationships  and  the  increased  use  of  vertical 
agreements  over  time.  At  the  same  time,  consumers  nowadays  expect  to  have  a 
continuous omni-channel experience across a variety of different channels such as offline 
and  online  shops,  marketplaces  and  other  online  platforms.  This  has  led  suppliers  to 
increase  the  number  of  different  distribution  or  sales  channels  used  to  promote  their 
products  and  services.  These  developments  have  led  to  changes  as  to  the  distribution 
models  used.  For  example,  the  use  of  selective  distribution  systems,  has  increased, 
whereas  exclusive  distribution  is  used  less  frequently  today.  Similarly,  new  types  of 
restrictions, such as restrictions regarding sales through online marketplaces, restriction 
on  online  advertising  or  retail  parity  clauses  have  become  more  prevalent  due  to  the 
growth of e-commerce. In addition, some issues that were already analysed at the time of 
the  last  revision  have  become  more  prominent  over  time,  such  as  stakeholder  concerns 
with  regard  to  possible  free-riding  between  the  different  sales  channels  and  the 
appropriate  delineation  between  active  and  passive  sales.  These  market  developments 
support  the  finding  that  the  VBER,  together  with  the  Vertical  Guidelines,  remains 
relevant,  as  there  is  a  need  to  address  the  changes  in  the  use  of  different  distribution 
models  and  sales  channels,  as  well  as  the  resulting  increase  of  vertical  agreements  and 
new vertical restrictions. In particular with regard to the latter, there is a need to provide 
legal  certainty  for their  assessment, to  determine whether they satisfy the conditions  of 
Article 101(3) of the Treaty and to provide a common framework of assessment. 

Coherence: The evidence gathered in the evaluation shows that the VBER, together with 
the  Vertical  Guidelines,  is  overall  coherent  both  with  other  Commission  rules  and 
guidance  on  the  application  of  Article  101  of  the  Treaty,  as  well  as  with  other  EU 
legislation with relevance for vertical supply and distribution agreements. Nevertheless, 
stakeholders pointed to a few areas in which coherence is not as high as it could be due to 
a  lack  of  clarity  or  perceived  inconsistencies  between  certain  rules.  In  particular,  the 
perceived lack of coherence of the VBER, together with the Vertical Guidelines, with the 
Geo-blocking  Regulation  comes  from  the  fact  that  the  latter  prohibits  certain  practices, 
which is a legislative choice, which could be further clarified when considering any next 
steps that may follow the evaluation. 

EU  added  value:  The  evidence  gathered  in  the  evaluation  suggests  that  the  VBER, 
together with the Vertical Guidelines, provides EU added value. Since it provides a safe 
harbour  from  Article  101  of  the  Treaty,  which  can  only  be  granted  at  EU  level,  the 
VBER  offers  increased  legal  certainty  and  guidance  as  compared  to  existing,  more 
general  and  nationally  fragmented  guidance  on  the  application  of  Article  101  of  the 
Treaty. 

It  follows from the above that there is  a  continued need  for a vertical  block exemption 
and  guidance  on  how  to  apply  Article  101  of  the  Treaty  to  vertical  agreements. 
Stakeholders  unanimously  confirmed  that  the  VBER  and  the  Vertical  Guidelines  are 
useful tools that greatly facilitate the self-assessment of vertical agreements required by 
the  wider  legal  framework.  Notably  in  view  of  the  market  developments  that  occurred 
since the adoption of the rules, there is a clear need for rules that provide legal certainty 
for  the  assessment  of  new  vertical  restrictions,  that  determine  whether  they  satisfy  the 

91 

 
conditions  of  Article  101(3)  of  the  Treaty  and  that  provide  a  common  framework  of 
assessment for NCAs and national courts. 

The evaluation has also shown that the VBER, together with the Vertical Guidelines, has 
overall  achieved  its  general  objective  of  facilitating  the  enforcement  work  of  the 
Commission, NCAs and national courts, as well as helping businesses conduct the self-
assessment of their vertical agreements, and that its specific objectives are still relevant. 

Nonetheless, the evaluation has also shown that the specific objectives of providing legal 
certainty  to  stakeholders  and  providing  a  common  framework  of  assessment  for  NCAs 
and  national  courts  have  not  been  fully  met.  There  is  scope  for  improving  the  level  of 
legal certainty provided by the rules, and consequently for reducing the cost of applying 
the  VBER,  together  with  the  Vertical  Guidelines,  for  all  stakeholders.  Addressing  the 
areas  of  the  rules  where  the  evaluation  has  identified  a  lack  of  clarity  or  gaps,  and  the 
areas where the rules are no longer adapted to market developments that occurred since 
their adoption in 2010 would also improve the ability of the rules to provide a common 
framework  of  assessment  for  national  competition  authorities  and  national  courts. 
Moreover, while the evidence suggests that the lists of hardcore restrictions and excluded 
restrictions are generally appropriate, there may still be scope in some areas of the rules 
to further reduce the risk of false negatives. 

The  evaluation  has  identified  a  number  of  areas  of  the  rules  which  are  not  functioning 
well, or as well as they could, for various reasons. While some issues were reported only 
by a small number of stakeholders, others were more widely discussed, also by different 
stakeholder groups. The main concern that arises from the evaluation is the fact that the 
VBER and the Vertical Guidelines are not  well adapted  to  the  market  developments 
that  took  place  since  the  adoption  of  the  rules,  notably  the  growth  of  online  sales 
and of new market players such as online platforms. Both developments raise issues 
for the functioning of the VBER, together with the Vertical Guidelines, in a number of 
areas  of  the  rules.  These  include  the  assessment  of  online  sales  and  advertising 
restrictions and dual pricing, as well as the distinction between active and passive sales, 
which is relevant to determine the boundaries of some of the hardcore restrictions set out 
in  the  VBER.  Many  issues  were  also  raised  in  relation  to  the  impact  of  these  market 
developments on the assessment of selective distribution agreements. The assessment of 
the principle of equivalence, as well as of restrictions on the use of online marketplaces 
and  price  comparison  websites  were  other  areas  mentioned  in  this  context  as  not 
functioning  well.  The  same  also  applies  to  areas  such  as  the  assessment  of  agency 
agreements  and  retail  parity  clauses,  as  well  as  the  rules  on  dual  distribution.  These 
issues, which are explained in more detail in Annex 4 to the Staff Working Document, 
should be taken into account in any next steps following the evaluation. 

A  number  of  other  areas  of  the  rules  were  mentioned  by  many  stakeholders  as  not 
functioning  well  for  reasons  not  necessarily  linked  to  market  developments. These 
include  issues  regarding  some  of  the  hardcore  restrictions  (e.g.  RPM)  and  excluded 
restrictions  (e.g.  non-compete  clauses),  as  well  as  certain  distribution  models  (e.g. 
franchising) or the combination of different distribution models (e.g. the use of exclusive 
and  selective  distribution  by  the  same  supplier).  The  reasons  why  these  areas  are  not 

92 

 
functioning  well  are  varied,  but  include  a  lack  of  clarity,  the  complexity  of  the  rules, 
difficulties  with  applying  certain  areas  of  the  rules  in  practice,  a  lack  of  sufficiently 
detailed  examples  for  certain  areas  and  the  fact  that,  for  some  areas,  the  rules  and 
guidance do not refer to case law issued since the adoption of the VBER (e.g. the CJEU’s 
Coty  judgment).  Stakeholder  comments  also  touched  upon  the  application  of  the 
withdrawal  procedure  and  the  disapplication  procedure,  as  well  as  the  appreciation  of 
cumulative  effects  of  restrictions  in  the  vertical  agreements  of  several  suppliers  in  the 
same market. It is expected that these issues will not resolve over time and may instead 
become  more  prominent  if  they  are  not  addressed.  Any  next  steps  following  this 
evaluation  should  therefore  pay  attention  to  these  issues,  which  are  explained  in  more 
detail in Annex 4 to the Staff Working Document. 

Finally,  the  evaluation  has  also  pointed  to  some  more  general  issues  as  regards  the 
VBER, together with the Vertical Guidelines, which need to be taken into account when 
considering any next steps following the evaluation.  

First,  the  evaluation  has  shown  that  market  developments  that  take  place  after  the 
adoption  of  the  rules  can  have  an  impact  not  just  on  the  relevance  but  also  on  the 
effectiveness and efficiency of the rules. Future market developments are of course hard 
to  predict  and  it  is  therefore  challenging  to  design  a  set  of  rules  that  allows  such 
developments to be taken into account. Nevertheless, this suggests that there is a need for 
rules which are, to the extent possible, future-proof. This means that they should not only 
address  known  issues  but  also  contain  bright-line  principles  that  can  cater  for  possible 
new types of vertical agreements and restrictions. 

Second, the evaluation has shown that the complexity of the rules is one important factor 
affecting their effectiveness and efficiency. Stakeholders pointed among other things to 
unclear wording or structure (e.g. exceptions to exceptions in Article 4 of the VBER), as 
well  as  a  lack  of  clear  definitions  and  guidance,  which  is  not  presented  in  a  consistent 
manner for some areas concerned. All of these issues lead to a certain complexity of the 
rules, which reduces legal certainty and makes the rules challenging to use, especially for 
SMEs  which  may  lack  the  necessary  resources  and  expertise.  Given  that  the  VBER 
necessarily has to rely on conditions that require some interpretation in their application 
to specific cases in order to remain future-proof, it may not be possible to fully solve this 
issue,  but  it should  nevertheless  be  taken  into  consideration  in  any  next  steps  that  may 
follow the evaluation. 

Third,  the  evaluation  has  shown  that  the  benefit  of  providing  a  common  framework  of 
assessment  has  been  impacted  by  the  fact  that  NCAs  and  national  courts  have  taken 
divergent  approaches  in  some  areas.  While  there  are  already  mechanisms  that  aim  to 
overcome these divergences, it may be necessary to consider further options to limit the 
impact  of  this  issue  on  the  effectiveness  of  the  VBER,  together  with  the  Vertical 
Guidelines. 

93 

 
 
Annex 1: Procedural information 

1.1. LEAD DG, DeCIDE PLANNING/CWP REFERENCES 

the  European  Commission  ("DG 
The  Directorate-General  for  Competition  of 
Competition")  is  the  lead  DG  for  the  review  of  Commission  Regulation  (EU)  No 
330/2010  of  20  April  2010  on  the  application  of  Article  101(3)  of  the  Treaty  on  the 
Functioning  of  the  European  Union  to  categories  of  vertical  agreements  and  concerted 
practice  ("VBER"),  together  with  the  Guidelines  on  Vertical  Restraints  ("Vertical 
Guidelines").   

The 
review  was 
"PLAN/2018/4003".134  

registered 

in 

the  Decide  Planning  with 

the 

reference 

1.2. ORGANISATION AND TIMING 

The evaluation of the VBER, together with the Vertical  Guidelines, was launched on 3 
October  2018  in  order  to  ensure  sufficient  time  for  carrying  out  the  procedural  steps 
required  by  the  Commission’s  Better  Regulation  Guidelines. 135  The  evaluation 
roadmap,  which  set  out  the  background  of  the  evaluation  as  well  as  its  purpose  and 
scope, was published on 8 November 2018. The evaluation roadmap also presented the 
consultation activities that would be conducted by the Commission during the evaluation 
(notably  a  public  consultation,  an  external  evaluation  support  study,  a  dedicated 
stakeholder workshop and a consultation of the NCAs) and explained the data collection 
methodology that would be followed to gather relevant information for the purpose of the 
evaluation.  

The  evaluation  of  the  VBER,  together  with  the  Vertical  Guidelines,  was  carried  out  in 
close cooperation with other interested Commission services. The inter-service steering 
group  ("ISSG")  set  up  for  that  purpose  comprises  representatives  of  the  Directorates-
General CNECT, CLIMA, ECFIN, GROW, AGRI, ENV, MOVE and FISMA, as well as 
the  Secretariat-General  and  the  Legal  Service,  which  are  associated  by  default  to  any 
such  initiative.  The  ISSG  was  consulted  on  the  evaluation  roadmap,  the  consultation 
strategy  and  the  online  evaluation  questionnaire  aimed  at  collecting  the  views  of  the 
stakeholders  in  the  context  of  the  public  consultation.  The  ISSG  also  reviewed  the 
summary  of  the  results  of  the  public  consultation  and  the  stakeholder  workshop.  The 
ISSG  was  likewise  consulted  on  the  tender  specifications  and  the  milestones  for  the 
evaluation study and the survey on consumer purchasing behaviour.  

134  See  Better Regulation Portal at  https://intragate.ec.europa.eu/decide/sep/entrance?view-dossier-details-

id=DORSALE-DOSSIER-2018-24941. 

135  Commission  staff  working  document,  Better  Regulation  Guidelines,  Brussels,  7  July  2017,  SWD 

(2017) 350. 

94 

 
 
                                                           
The  evaluation  of  the  VBER,  together  with  the  Vertical  Guidelines,  was  carried  out  in 
close  cooperation  with  the  NCAs,  which  were  consulted  on  the  milestones  for  the 
evaluation study and the study on consumer purchasing behaviour. 

The different milestones of the evaluation phase are reflected in the table below:  

Timing 

Step 

3 October 2018 

26 October 2018 

8 November 2018 

9 January 2019 

4 February 2019 

16 July 2019 

Launch of the evaluation in the Commission’s Decide Planning 
1st ISSG Meeting with the following agenda items:  
- presentation of the tentative planning of the initiative, 
- consultation on the draft evaluation roadmap, and 
- consultation on the draft consultation strategy 

Publication of the evaluation roadmap (4-weeks comments period) 
2nd ISSG Meeting with the following agenda items:  
- presentation of the comments on the evaluation roadmap, and 
- consultation on the draft online evaluation questionnaire  

Publication  of  the  online  evaluation  questionnaire  (16-weeks 
consultation period) 
3rd ISSG Meeting with the following agenda items:  
- presentation of the results of the public consultation (the draft summary report 
was consulted on in writing as a follow-up),  
- update on the evaluation study, and  
- update on the organisation of the stakeholder workshop 

- 
- 
- 

- 
- 

- 

- 
- 

16 July 2019 

30 July 2019 

8 August 2019 

Upstream RSB meeting 

Publication of the summary report of the public consultation 

Signature of the contract for the evaluation study  

14-15 November 2019  Stakeholder workshop  

13 December 2019 

Publication of the summary report of the NCA contributions 

18 December 2019 

8 January 2020 

5 February 2020 

3 April 2020 

27 April 2020 

25 May 2020 

18 May 2020 

Signature of the contract for the consumer purchasing study 
4th ISSG Meeting with the following agenda items:  
- presentation of the summary of the NCA consultation, and 
- consultation on the draft summary report of the stakeholder workshop 

Publication of the summary report of the stakeholder workshop 

Submission of the final report of the evaluation study 

Submission of the final report of the consumer purchasing study  

Publication  of  the  evaluation  study  and  the  consumer  purchasing 
study 
5th  ISSG  Meeting  (video-conference)  with  the  following  agenda 
item:  
- consultation on the draft Staff Working Document 

- 
- 

- 

24 June 2020 

Consultation of the Regulatory Scrutiny Board  

95 

 
 
1.3. EXTERNAL EVALUATION SUPPORT STUDY 

As  explained  in  section  4.1.4  above,  the  evaluation  was  supported  by  an  external 
evaluation  study.  The  purpose  of  the  study  was  to  gather  qualitative  and  quantitative 
information about market trends with regard to distribution models and strategies, as well 
as  the  use  of  certain  vertical  restrictions  and  their  effects.  The  study  also  included  an 
analysis  of  the  enforcement  action  of  the  NCAs  with  regard  to  vertical  restrictions,  as 
well as case studies on the costs and benefits  of  applying the VBER, together with  the 
Vertical Guidelines. The evaluation study was complemented by a consumer purchasing 
study,  which  aimed  to  collect  information  on  the  purchasing  behaviour  of  European 
consumers, notably with regard to the interaction between online and offline channels.  

The evaluation study was tendered on the basis of DG Competition’s framework contract 
for evaluations and impact assessments in the field of antitrust. The framework contract 
is based on the cascade procedure, according to which a request for an offer for a specific 
contract is made to the first placed tenderer, who can then decide to submit an offer or to 
reject  the  request.  In  the  latter  case,  the  request  is  passed  on  to  the  second  placed 
tenderer.  

The  framework  contract  was  signed  at  the  end  of  June  2019  with  two  of  the  three 
tenderers  who  had  participated  in  the  tender  procedure.  The  first  placed  tenderer  is  a 
consortium led by VVA Brussels (an Italian-based business consultancy), which includes 
Grimaldi  Studio  Legale,  LE  Europe,  Österreichisches  Institut  für  Wirtschaftsforschung 
and  WIK-Consult.  The  second  placed  tenderer  is  a  consortium  led  by  BKP  Economic 
Advisors,  which  includes  Analysys  Mason,  Deutsches  Institut  für  Wirtschaftsforschung 
and Learlab.   

The  first  placed  tenderer  was  invited  to  submit  an  offer  for  the  evaluation  study  at  the 
beginning of July 2019.  On the basis of this offer, the Commission  signed the contract 
for the evaluation study with the consortium led by VVA on 8 August 2019 for a period 
of  34  weeks.  Due  to  special  circumstances,  the  contractor  was  granted  an  extension  of 
two working days to deliver the final report of the study in March 2020. The contractor 
submitted the interim report of the evaluation study to the Commission on 18 December 
2019, the draft final  report  on 4 March 2020 and the final  report on 3 April 2020. The 
ISSG was consulted on all interim documents related to the evaluation study.  

The  first  placed  tenderer  was  invited  to  submit  an  offer  for  the  consumer  purchasing 
study  at  the  beginning  of  November  2019.  On  the  basis  of  this  offer,  the  Commission 
signed the contract for the consumer purchasing study with the consortium led by VVA 
on  18  December  2019  for  a  period  of  15  weeks.  Due  to  special  circumstances,  the 
contractor  was  granted  an  extension  of  17  working  days.  The  contractor  submitted  the 
interim  report  of  the  consumer  purchasing  study  on  11  February  2020,  the  draft  final 
report on 16 April 2020 and the final report on 23 April 2020. The ISSG was consulted 
on all interim documents related to the consumer purchasing study. 

96 

 
1.4. CONSULTATION OF THE RSB  

The meeting of the Regulatory Scrutiny Board (RSB) took place on 24 June 2020. The 
outcome was  a positive  opinion, issued on 26 June 2020.  The following  table provides 
information  on  how  the  comments  made  by  the  RSB  were  addressed  in  this  Staff 
Working Document: 

RSB comments  

Action taken 

(1)  The  report  should  analyse  more  how 
market  developments  have  affected  the 
need  for  the  measures  contained  in  the 
VBER.  It  should  look  into  the  issues  that 
led  to  the  adoption  of  the  VBER,  the 
amendments  in  2010,  and  how  these  have 
evolved  in  the  meantime.  The  analysis 
should  explore  how  the  development  of 
online  sales  affects  the  relevance  of  the 
various  measures  and  whether  they  serve 
consumer interests (e.g. check if free-riding 
is  still  an  issue  that  the  VBER  needs  to 
address; look  into the impact  of VBER  on 
consumer  prices).  To  this  end,  the  main 
text  could  integrate  certain  elements  of 
identified  issues  in  annex  4  that  support 
such analysis. 

(2)  The  report  should  look  into  room  for 
simplification in the current Regulation and 
its implementation. 

the 
(3)  The 
regulation’s  risk  of  "false  positives"  and 

should  analyse 

report 

to 

A  new  section  5.1  was  added  to  the  Staff 
Working  Document  (SWD)  before  the 
answers 
evaluation 
the  different 
questions,  which  draws  on  information 
previously  presented  in  other  sections  of 
the  SWD  and  notably  in  the  section  on 
this  new 
relevance.  More  specifically, 
section  describes  and  analyses  in  more 
detail the main market developments since 
the adoption of the VBER. It also includes 
the  results  of  the  consumer  purchasing 
study  concerning  the  potential  magnitude 
of free-riding between and within different 
distribution  channels  for 
the  different 
product  categories  analysed  in  the  context 
of the study. The new section also gives an 
overview  of  the  enforcement  practice  with 
regard  to  vertical  restrictions  both  at  EU 
and national level since the adoption of the 
VBER. More information and graphs from 
the  evaluation  study  have  been  added  to 
this new section in order to provide a more 
comprehensive  overview  of  the  market 
developments  since  the  adoption  of  the 
VBER, as well as to illustrate the impact of 
and 
these  developments  on 
distribution  agreements  and  consumer 
behaviour.  

supply 

The  changes  made  in  the  2010  VBER  are 
described  in  detail  in  the  introduction  of 
the SWD and analysed in the context of the 
specific area concerned in Annex 4.  

A new evaluation question has been added 
under 
the  efficiency  criterion,  which 
assesses  the  scope  for  simplification  and 
cost  reductions  based  on  the  evidence 
gathered in the evaluation.  

The  assessment  of  evaluation  question  2 
was  split  to  present  the  evidence  gathered 

97 

 
"false  negatives"  separately,  both  in  the 
analysis  and  in  the  conclusions.  It  should 
clarify  that  they  correspond  to  different 
objectives  with  different  levels  of  priority: 
the  avoidance  of  "false  positives" 
is 
to  respect  Treaty  provisions 
necessary 
while  the  avoidance  of  "false  negatives" 
pursues  an  objective  of  consumer  benefits 
through transaction cost reductions. If case 
studies  suggest  the  existence  of  "false 
positives", 
this  should  be  flagged  for 
further investigation. 

and 

in the evaluation separately as regards false 
negatives.  The 
false 
positives 
introduction  to  this  section  also  clarifies 
that, while being part of the same objective 
of  creating  a  safe  harbour  with  an 
appropriate scope, false positives and false 
negatives  deserve  a  different  level  of 
priority in the evaluation of the functioning 
of  the  rules.  Moreover,  more  information 
was  added  on  the  areas  of  the  rules  for 
which  stakeholders  pointed  to  a  risk  of 
false positives or false negatives in order to 
the  detailed  assessment 
reflect 
better 
presented in Annex 4. 

the  weak 

(4)  The  conclusions  should  be  more 
nuanced.  They  should  better  consider  the 
uncertainties  surrounding  the  analysis  that 
is  predominantly  based  on 
incomplete 
stakeholder  views  and  less  on  quantitative 
data.  The  report  should  better  take  into 
account 
representation  of 
consumer  interests  in  the  consultation  and 
reflect  this  in  the  conclusions.  Moreover, 
the  conclusions  should  fully  correspond  to 
what  the  evidence  suggests  and  avoid 
general  unsubstantiated  statements 
that 
is 
or 
"functioned  well" 
VBER 
"appropriate".  The  report  should  include 
more  details  on  lessons  learnt,  drawing  on 
the  issues  identified  in  annex  4,  and 
develop  more  operational  conclusions  that 
are useful for future action. 

in 

the 

The  general  conclusions  on  the  overall 
functioning of the VBER, together with the 
Vertical Guidelines, were adapted to better 
reflect the detailed assessment presented in 
the  methodology 
Annex  4.  Moreover, 
section  was  updated  to  clarify  why  the 
evidence-gathering 
evaluation 
mainly  focused  on  the  views  of  agencies 
enforcing the VBER and businesses having 
to  self-assess  compliance  of  their  vertical 
agreements with Article 101 of the Treaty, 
in  line  with  the  general  objective  of  the 
VBER.  It  was  also  clarified  that  the 
evaluation 
all 
stakeholder  views,  regardless  of  whether 
they  are  supported  by  a  large  or  small 
number  of  stakeholders.  This 
is  also 
reflected  in  Annex  4,  which  presents  the 
different  views  and 
issues  raised  by 
stakeholders per area of the rules, including 
diverging  views  both  within  the  same  and 
across different stakeholder groups/sectors. 
An  effort  was  also  made  to  refer  in  more 
detail  throughout  the  assessment  to  the 
main  issues  raised  by  stakeholders  as  set 
out in Annex 4.  

account 

takes 

into 

In addition to the comments set out above, the RSB provided some technical comments, 
which were taken into account when finalising the Staff Working Document.  

98 

 
Annex 2: Stakeholder consultation 

This annex presents the results of the consultation activities performed in the context of 
the evaluation of the VBER, together with the Vertical Guidelines.  

As  set  out  in  the  consultation  strategy  for  the  evaluation, 136  the  objective  of  the 
consultation  process  was  to  collect  in-depth  and  high  quality  evidence  on  the  key 
competition issues arising in vertical relationships from the perspective of the businesses, 
consumers and EU competition law enforcers.  

Based  on  a  mapping  exercise  relying  on  the  Commission’s  experience  of  enforcing 
Article  101  of  the  Treaty,  the  information  gathered  through  the  Commission’s  e-
commerce  sector  inquiry  and  the  feedback  received  on  the  evaluation  roadmap,  the 
Commission identified the following stakeholder groups as being similarly interested in 
(and also  similarly  affected by) the evaluation  of the VBER,  together with the Vertical 
Guidelines: (i) companies with business operations in the EU, including but not limited 
to  suppliers  of  goods  and  services,  distributors/retailers  of  goods  and  services  and 
platforms/intermediaries active in e-commerce, together with (ii) law firms advising them 
on competition related issues, (iii) industry associations, (iv) consumer organisations and 
(v) academics with  a focus  on EU competition law and notably on vertical  restrictions. 
As  regards  the  enforcement  perspective,  the  experience  gained  by  the  national 
competition authorities of the EU Member States in applying the VBER and considering 
the Vertical Guidelines was considered of particular interest for the evaluation. 

The various consultation activities consisted of:  

  a consultation on the evaluation roadmap;  
  an open public consultation based on an online questionnaire; 
  a targeted consultation of national competition authorities;  
  a stakeholder workshop. 

The different consultation activities mentioned in this annex aimed to gather input from 
stakeholders  on  how  the  VBER,  together  with  the  Vertical  Guidelines,  has  functioned 
since  its  adoption.  To  that  end,  the  Commission  focused  in  particular  on  trying  to 
understand which areas of the rules have not functioned well or have not functioned as 
well  as  they  could  have,  and  the  underlying  reasons.  Many  stakeholders  nonetheless 
provided input on the changes they consider necessary to improve the functioning of the 
rules  and  what  these  changes  should  look  like.  Despite  being  outside  the  scope  of  the 
evaluation, this input has nevertheless been analysed and taken into account to the extent 
that it provided useful insights into why the rules are considered not to have functioned 

136  The consultation strategy is available on the dedicated VBER review webpage on DG Competition's 
website at https://ec.europa.eu/competition/consultations/2018_vber/consultation_strategy.pdf.  

99 

 
 
                                                           
as well as they could have. Any reference to such proposed changes by stakeholders in 
the  following  summaries  of  the  various  consultation  activities  should  therefore  be 
understood in this context. 

2.1. CONSULTATION ON THE EVALUATION ROADMAP 

2.1.1.  Overview of respondents 

The Commission received 25 responses as feedback to the evaluation roadmap. The large 
majority  of  the  entities  that  provided  feedback  were  business  associations,  either 
operating at EU level or with national reach (21 responses out of 25). Feedback was also 
received from one company, one law firm, one lawyer/consultant and one member of the 
European  Parliament.  As  to  the  breakdown  by  country  of  origin,  8  respondents  were 
domiciled  in  Belgium,  5  in  Germany,  5  in  France,  2  in  the  Netherlands  and  1  each  in 
Italy, Spain, Finland, Denmark and Sweden. 

2.1.2.  Overview of submissions 

The feedback provided showed overall support for the Commission's initiative to perform 
the  evaluation.  Stakeholders  generally  indicated  that  the  VBER  is  useful  and  remains 
necessary. They therefore consider that it should be maintained, but reviewed to address 
issues  that  have  arisen  in  its  interpretation,  as  well  as  new  market  developments. 
Stakeholders also expressed an interest that the review includes the Vertical Guidelines, 
as these have become de facto rules over time. A number of stakeholders also raised the 
issue of the non-uniform application of the rules by NCAs and national courts. 

In addition, stakeholders raised a number of issues as regards the functioning of the rules. 
These include the fact that the rules are not well adapted to the increase in digitalisation, 
increased direct sales by manufacturers to customers, the emergence of online platforms 
and  the  growth  of  e-commerce.  Some  stakeholders  also  raised  issues  as  regards  the 
market share thresholds, the prohibition of resale price maintenance and the application 
of the rules to agency agreements. 

On  the  consultation  process,  stakeholders  suggested  increasing  the  deadline  for 
responding to the public consultation.137 A couple of stakeholders suggested considering 
additional  evaluation  criteria.  A  number  of  stakeholders  expressed  an  interest  in 
participating  in  other  consultation  activities,  as  well  as  an  interest  in  having  other 
channels  of  communication  with  the  Commission  (in  particular  allowing  for  the 
transmission  of  confidential  information).  Finally,  some  stakeholders  emphasised  the 
need for the evaluation to take account of the views of stakeholders representing various 
forms of trade to ensure a balanced outcome. 

137  In view of these comments, the consultation period was extended from 12 to 16 weeks. 

100 

 
                                                           
2.2. SUMMARY OF THE OPEN PUBLIC CONSULTATION  

A summary report of the open public consultation was published in July 2019.138 

Introduction 

The  European  Commission  ("Commission")  ran  an  open  public  consultation  on  the 
evaluation  of  the  Vertical  Block  Exemption  Regulation  (EU)  No  330/2010  ("VBER") 
from 4 February to 27 May 2019. 

The public consultation targeted both citizens and stakeholders in order to gather views 
on  the  functioning  of  the  current  VBER  and  the  accompanying  Guidelines  on  Vertical 
Restraints  ("VGL").  The  questionnaire  was  published  in  English,  French  and  German. 
Participants could reply in any of the 24 official languages of the EU.  

The  public  consultation  was  also  promoted  through  Twitter  and  the  DG  Competition 
website. 

The Commission received 164 contributions to the public consultation submitted through 
the online questionnaire. It also received 13 position papers submitted in the context of 
the public consultation, which largely echoed the issues raised in the contributions to the 
public consultation. 

The  statistics  computed  in  this  summary  are  based  only  on  contributions  to  the  public 
consultation  submitted  through  the  online  questionnaire.  The  input  has  been  analysed 
using a data analysis tool,139 complemented by manual analysis. 

Upon  request  of  some  respondents,  the  Commission  amended  their  respective 
contributions  according  to  the  instructions  received.  Due  to  a  technical  failure  of  the 
uploading  option  provided  in  the  online  questionnaire,  the  Commission  also  had  to 
upload manually the attachments that participants had declared to be missing from their 
reply. This was the main reason for the delay with which the contributions to the public 
consultation were published on the Better Regulation Portal. 

Profile of respondents to the online questionnaire 

Among the 164  respondents, there  are 93 business  associations, 42 companies/business 
organisations  (including  8 companies  engaged in legal  or accounting activities), 3 non-
governmental  organisations  (including  one  consumer  association),  4  EU  citizens,  3 
academic and research institutions, 1 trade union and 18 others (more than half of which 

138  The summary report is available at 

https://ec.europa.eu/competition/consultations/2018_vber/factual_summary.pdf. 

139  The tool used is Doris Public Consultation Dashboard, an internal Commission tool for analysing and 
visualising  replies  to  public  consultations.  It  relies  on  open-source  libraries  using  machine-learning 
techniques  and  allows  for  the  automatic  creation  of  charts  for  closed  questions,  the  extraction  of 
keywords  and  named  entities  from  free-text  answers  as  well  as  the  filtering  of  replies,  sentiment 
analysis and clustering. 

101 

 
                                                           
are individual lawyers or law firms).140 The majority of the contributions were submitted 
in English, German and French. 

The majority of the contributions comes from organisations with an international (93) or 
national  scope  (59).  The  distribution  of  replies  across  organisation  size  is  relatively 
homogenous  with  55  large  (250  or  more  employees),  40  micro  (1  to  9  employees),  38 
small  (10  to  49  employees)  and  27  medium  organisations  (50  to  249  employees).  4 
respondents did not specify their size. 

As  far  as  business  associations  are  concerned,  44  out  of  93  reported  having  an 
international  scope.  43  business  associations  indicated  a  national  scope,  4  a  regional 
scope  and  2  a  local  scope.  Table  1  shows  the  EU  countries  in  which  the  business 
associations with national, regional or local scope operate. 

Country  Count 

Austria 

Belgium 

Finland 

France 

Germany 

Italy 

Netherlands 

Poland 

Spain 

Switzerland 

United Kingdom 

5 

6 

1 

10 

10 

5 

5 

2 

3 

1 

1 

Total 

49 

TABLE 1 - DISTRIBUTION OF NON-INTERNATIONAL BUSINESS ASSOCIATIONS ACROSS EU 

COUNTRIES 

Furthermore,  64  business  associations  stated  that  their  members  are  both  suppliers  and 
buyers of products and/or services, while 7 business associations have members who are 
only buyers and another 7 business associations have members who are only suppliers.141 

As  far  as  companies/business  organisations  are  concerned,  the  majority  of  the 
respondents  are  large  in  size  and  have  an  international  scope.  In  fact,  out  of  42 
companies/business organisations, 33 are large (250 or more employees), 6 medium (50 
to  249  employees),  2  small  (10  to  49  employees)  and  1  micro  (1  to  9  employees). 
Moreover, 35 have an international scope and 6 a national scope.  

The  companies/business  organisations  who  responded  to  the  public  consultation  cover 
several  sectors  of  the  European  economy.  Table  2  provides  an  overview  of  the 

140  It should be noted that some respondents mistakenly classified themselves incorrectly. The Commission 
corrected these mistakes for the purposes of this summary and established the statistics on the basis of 
the corrected dataset. 

141  It should be noted that 15 business associations did either not declare anything in reply to this question 

or responded that the question was not applicable to them. 

102 

 
                                                           
distribution  of  the  companies/business  organisations  across  the  2-digit  NACE  Rev.2 
code.142  

NACE 

Count 

10 Manufacture of food products 

11 Manufacture of beverages 

14 Manufacture of wearing apparel  

15 Manufacture of leather and related products  

20 Manufacture of chemicals and chemical products 

22 Manufacture of rubber and plastic products  

26 Manufacture of computer, electronic and optical products 

32 Other manufacturing 
SubTotal Manufacturers143 
46 Wholesale trade, except of motor vehicles and motorcycles  

47 Retail trade, except of motor vehicles and motorcycles 

SubTotal Retailers 

51 Air transport  

61 Telecommunications 

69 Legal and accounting activities  

70 Activities of head offices; management consultancy activities  

73 Advertising and market research  

77 Rental and leasing activities  

SubTotal Others 
TOTAL 

1 

4 

1 

2 

6 

1 

1 

2 

18 

3 

8 

11 

1 

1 

8 

1 

1 

1 

13 
42 

TABLE 2 - DISTRIBUTION OF COMPANIES/BUSINESS ORGANISATIONS ACROSS THE 2-DIGIT NACE 
REV.2 CODE. 

Among the companies/business organisations who responded to the public consultation, 
there  are  companies  with  significant  direct  off-line  sales  as  well  as  companies  with 
significant  direct  on-line  sales,  including  some  that  rely  on  third-party  online 
marketplaces/platforms.  

Contributions to the online questionnaire 

The  public  consultation  aimed  at  collecting  views  and  evidence  from  the  public  and 
stakeholders  on  the  following  five  evaluation  criteria:  effectiveness,  efficiency, 
relevance,  coherence  and  EU  added  value.  The  below  summary  of  the  contributions  to 
the online questionnaire is therefore structured around these five evaluation criteria. 

Effectiveness (Have the objectives been met?) 

In  order  to  evaluate  whether  the  VBER,  together  with  the  VGL,  have  met  their 
objectives, stakeholders were asked to answer three sets of questions.  

142  See 

https://ec.europa.eu/eurostat/documents/3859598/5902521/KS-RA-07-015-EN.PDF/dd5443f5-
b886-40e4-920d-9df03590ff91?version=1.0.  For  the  purposes  of  this  statistical  overview,  the 
Commission made some manual adjustments to the NACE code identified by respondents (e.g. in cases 
where  the  respondents’  business  description  did  not  match  the  NACE  code  identified  in  the  reply, 
respondents did not reply or did not reply properly). 

143  It  should  be  noted  that  some  of  the  manufacturers  included  in  this  figure  are  also  involved  in  the 

distribution of their own products. 

103 

 
                                                           
The  first  question  inquired  whether  stakeholders  perceive  the  VBER  and  the  VGL  to 
have contributed to the promotion of good market performance in the EU.  

Do  you  perceive  that  the  VBER  and  the  VGL  have  contributed  to  promote  good  market 
performance in the EU? 

143  respondents  (approximately  87%,  with  no  major  difference  between  stakeholder 
groups)  respond  positively,  even  if  some  of  them  perceive  the  contribution  to  be  only 
partial.  Many  of  these  respondents  reasoned  their  view  by  pointing  out  that  the  VBER 
and  VGL  contributed  to  an  increased  level  of  legal  certainty.  The  respondents  that 
consider  the  positive  effect  to  be  limited  mention  as  reasons  for  this,  for  example,  the 
complexity  of  the  rules  and  the  difficulty  for  SMEs  to  apply  the  rules.  As  regards 
particular  sectors  in  which  the  effects  were  perceived  to  be  less  positive,  stakeholders 
mentioned,  for  example,  the  e-commerce  sector,  travel  agencies,  franchising  and  the 
motor vehicle sector. This was due to the increased importance of online sales and online 
intermediaries, sector specificities and, as regards the motor vehicle sector, the fact that 
the VBER has only applied to the sector since 2013. 

Out of the 21 respondents (approximately 13%) that do not reply positively, 7 (primarily 
business  associations)  state  that  the  VBER  and  the  VGL  negatively  affected  market 
performance, whereas 13 respondents (across different stakeholder groups) do not know 
and 1 (a law firm) considers the effect of the VBER and the VGL to be neutral. Some of 
these respondents mention that certain elements  of the existing rules are too restrictive, 
thus  preventing  businesses  from  optimising  their  distribution  policies,  or  that  the  rules 
have had an adverse effect on the development of online markets in Europe. 

The second set of questions aimed at assessing the level of legal certainty provided by the 
current legal framework. 

104 

 
 
Do you consider that the VBER and the related guidance in the VGL provide a sufficient level of 
legal certainty for the purpose of assessing whether vertical agreements and/or specific clauses 
are  exempted  from  the  application  of  Article  101  of  the  Treaty  and  thus  compliant  with  this 
provision (i.e. are the rules clear and comprehensible, and do they allow you to understand and 
predict the legal consequences)? 

To  the  question  whether  stakeholders  consider  that  the  VBER  and  the  VGL  provide  a 
sufficient level of legal certainty, most of the respondents (both replying positively and 
negatively) explain that the VBER and the VGL are useful as guidance, but need to be 
revised and/or clarified in relation to certain aspects in order to increase legal certainty, in 
particular  in  view  of  new  market  developments 144  during  the  last  years.  Some 
respondents (primarily companies and business associations representing the supply side 
of  the  vertical  chain,  but  also  some  legal  experts)  also  mention  that  the  non-binding 
nature  of  the  VGL  has  resulted  in  an  inconsistent  application  of  the  rules  by  national 
competition authorities and national courts, which has overall reduced the level of legal 
certainty  provided  by  the  VBER.  Respondents  mention,  as  concrete  examples,  an 
inconsistent application of the rules regarding restrictions on online selling (e.g. the use 
of online platforms) as well as of the rules regarding resale price maintenance. 

Stakeholders were also  asked to  estimate the  level  of  legal  certainty  provided  by  the 
VBER  and  the  VGL  for  specific  areas  of  the  rules  by  providing  a  qualitative 
estimate for each area, ranging between 1 and 3 (where 1 corresponded to a very low, 2 
to  a  slightly  low  and  3  to  an  appropriate  level  of  legal  certainty).  The  number  of 
responses for each specific area varied considerably. 

A large number of respondents do not reply or state that the question is not applicable to 
them or that they do not know. Considering only the replies providing a figure between 1 
and 3, there is also a significant variation between the replies for each area of the VBER 
and/or  the  VGL.  However,  for  almost  all  areas  tested,  only  a  minority  of  respondents 

144  The respondents provided more detailed information about these market developments in reply to the 
question  asking  them  to  list  candidate  areas  for  a  possible  revision,  together  with  the  major  trends 
motivating the need for such a revision (see below). 

105 

 
 
                                                           
indicate a very low level of legal certainty (marked 1), with less than 20 respondents per 
area  choosing  this  option.  Moreover,  there  were  no  areas  for  which  this  was  the  most 
chosen option. 

For  the  majority  of  the  areas  tested,  the  number  of  respondents  (across  all  stakeholder 
groups)  that  consider  that  there  is  an  appropriate  level  of  legal  certainty  (marked  3)  is 
considerably higher than the number of respondents that estimate a slightly or very low 
level  of  legal  certainty  (marked  1  or  2).  This  includes  areas  such  as  the  definition  of 
vertical agreements, agreements of minor importance or subcontracting agreements; the 
market  share  threshold  for  both  supplier  and  buyer;  the  hardcore  restrictions  regarding 
cross-supplies and the sourcing of spare parts; most of the excluded restrictions; as well 
as  the  guidance  in  the  VGL  regarding  exclusive  distribution,  exclusive  customer 
allocation, exclusive supply, upfront access payments, category management agreements 
and tying. 

For  other  areas,  a  majority  of  respondents  (across  all  stakeholder  groups)  consider  that 
there is a slightly low or very low level of legal  certainty (marked 1 or 2). These areas 
include  the  conditions  for  non-reciprocal  vertical  agreements  between  competitors  to 
benefit  from  the  VBER;  the  hardcore  restrictions  regarding  resale  price  maintenance, 
territorial/customer restrictions, online sales restrictions and restrictions of active/passive 
sales  in  selective  distribution;  as  well  as  the  guidance  in  the  VGL  regarding  selective 
distribution and resale price restrictions. 

Finally,  for  a  small  number  of  areas,  the  replies  indicating  a  slightly  low  or  very  low 
level of legal certainty (marked 1 or 2) are comparable in terms of number to the replies 
indicating  an  appropriate  level  of  legal  certainty  (marked  3).  These  areas  include  the 
conditions  for  the  withdrawal  of  the  VBER,  as  well  as  the  guidance  in  the  VGL  on 
agency agreements, individual cases of hardcore restrictions falling outside the scope of 
Article 101(1) of the Treaty or fulfilling the conditions  of Article 101(3) of the Treaty, 
single branding and franchising. 

Stakeholders were also asked to explain the reasons for low ratings and in particular to 
specify whether the lack of legal certainty stems from (i) the definition of the particular 
area in the VBER or the related description in the VGL, (ii) their application in practice 
or (iii) the overall structure of the VBER and/or the VGL. Respondents mainly explain in 
more detail which provisions in particular they consider unclear or in need of revision. In 
addition, respondents point to several instances of unclear wording and the complexity of 
parts  of  the  VBER  and  the  VGL.  Some  respondents  also  argue  for  the  clarification  of 
certain legal concepts and principles, as well as for more detailed examples and clearer, 
updated guidance, notably to reflect new market developments and relevant case law of 
the  last  years.  Some  respondents  also  point  to  the  difficulty  in  applying  the  rules  in 
practice, notably the market share thresholds.  

Regarding  the  question  whether  stakeholders  consider  that  there  are  other  areas  for 
which the VBER and/or the VGL provide insufficient legal certainty, particular areas 
specified  by  respondents  (other  than  those  already  mentioned)  include  new  ways  of 
distribution  over  the  internet,  the  treatment  of  "most  favoured  nation"  or  "price  parity" 

106 

 
clauses, restrictions on the purchasing of keywords for the purposes of online advertising 
and vertical restrictions imposed by intermediaries. 

Are there other areas for which you consider that the VBER and/or the VGL provide insufficient 
legal certainty? 

The second set of questions aimed at verifying whether the conditions currently defined 
in  the  VBER  and  the  VGL  (e.g.  market  share  thresholds,  hardcore  restrictions  and 
excluded restrictions) meet the objective of capturing the agreements for which it can be 
assumed  with  sufficient  certainty  that  they  generate  efficiencies  in  line  with  Article 
101(3) of the Treaty, or whether these conditions lead to false positives (e.g. exempting 
an  agreement  that  should  not  be  exempted)  and  false  negatives  (e.g.  not  exempting  an 
agreement that should be exempted).  

Leaving aside the appropriateness of the scope of the current list of hardcore restrictions (Article 
4  VBER)  and  excluded  restrictions  (Article  5  VBER),  do  you  consider  that  the  additional 
conditions  defined  in  the  VBER  (i.e.  Article  2  and  3  VBER) lead  to  the exemption  of types  of 
vertical agreements that do not generate efficiencies in line with Article 101(3) of the Treaty? 

Regarding  the  conditions  set  out  in  Articles  2  and  3  of  the  VBER,  which  vertical 
agreements have to meet to benefit from the block exemption, among the 15 respondents 
(primarily business associations and legal experts) that consider these conditions to lead 

107 

 
 
 
to  the  exemption  of  agreements  that  should  not  benefit  from  the  block  exemption,  10 
respondents link the false positives to the market share threshold of the supplier and 5 to 
the  market  share  threshold  of  the  buyer.  For  7  out  of  these  15  respondents,  also  the 
condition  regarding  non-reciprocal  vertical  agreements  between  competitors  leads  to 
undue  exemptions.  1  respondent  also  links  false  positives  to  the  condition  regarding 
vertical agreements entered into between an association of undertakings and its members.  

Are there other types of vertical agreements for which it can be assumed with sufficient certainty 
that they generate efficiencies in line with Article 101(3) of the Treaty but which are not covered 
by the current scope of the exemption? 

Concerning the current scope of the exemption, the 33 respondents145 that indicate that 
some agreements that are currently not covered by the exemption should benefit from it, 
mention,  for  example,  agreements  entered  into  by  companies  with  a  market  share 
between  30%  and  40%  and  agreements  containing  clauses  imposing  resale  price 
maintenance due to the efficiencies they can generate according to some stakeholders.  

145  Primarily  business  associations  and  legal  experts,  but  also  some  companies  and  other  types  of 

stakeholders. 

108 

 
 
                                                           
Are there any types of vertical restrictions that the VBER considers as hardcore (Article 4 VBER), 
but for which it can be assumed with sufficient certainty that they generate efficiencies in line with 
Article 101(3) of the Treaty? 

As  regards  the  list  of  hardcore  restrictions  in  Article  4  of  the  VBER,  out  of  the  66 
respondents146 that  consider  that  it  leads  to  false  negatives  because  it  contains  one  or 
more type(s) of vertical restrictions for which it can be assumed with sufficient certainty 
that  they  generate  efficiencies,  43  refer  to  online  sales  restrictions,  41  to  resale  price 
maintenance,  36  to  territorial  or  customer  restrictions,  31  to  restrictions  of  active  or 
passive  sales,  20  to  restrictions  of  cross-supplies  and  10  to  agreements  preventing  or 
restricting the sourcing of spare parts.  

Does the list of excluded vertical restrictions (Article 5 VBER) exclude types of vertical restrictions 
for  which  it  can  be  assumed  with  sufficient  certainty  that  they  generate  efficiencies  in  line  with 
Article 101(3) of the Treaty? 

146  Legal experts replied mostly positively to this question, whereas there was no discernible trend in the 

responses of other stakeholder groups. 

109 

 
 
 
                                                           
As  regards  the  list  of  excluded  vertical  restrictions  in  Article  5  of  the  VBER,  43 
respondents  (with  no  major  difference  between  stakeholder  groups)  consider  that  the 
current list can lead to false negatives because it excludes certain types of restrictions that 
can  generate  efficiencies  such  as  non-compete  obligations  with  indefinite  duration  or 
exceeding 5 years (for 36 of the 43 respondents), post term non-compete obligations (for 
25 of the 43 respondents) and restrictions to sell brands of particular competing suppliers 
in a selective distribution system (for 13 of the 43 respondents).  

Are  there  other  types  of  vertical  restrictions  for  which  it  cannot  be  assumed  with  sufficient 
certainty that they generate efficiencies in line with Article 101(3) of the Treaty but which are not 
captured  by  the  current  list  of  hardcore  restrictions  (Article  4  VBER)  or  excluded  restrictions 
(Article 5 VBER)? 

According to some of the 26 respondents (primarily business associations) that consider 
that there are other  types  of  vertical  restrictions for which it cannot be assumed with 
sufficient  certainty  that  they generate  efficiencies  in  line  with  Article  101(3)  of  the 
Treaty, online market place bans, "most favoured nation" clauses and retail channelling 
(as an indirect form of resale price maintenance) should, for example, be considered as 
hardcore restrictions.  

Efficiency (Were the costs involved proportionate to the benefits?) 

In order to evaluate whether the VBER and the VGL have generated costs proportionate 
to the benefits they bring, stakeholders were asked a number of questions. 

As regards the  costs  generated  by  the  assessment  of  the  applicability  of  the  VBER 
and  the  VGL  to  vertical  agreements, 66 respondents  (primarily companies and some 
business  associations)  indicate  that  the  assessment  of  the  application  of  the  VBER  and 
VGL generates costs.  

110 

 
 
Does  the  assessment  of  whether  the  VBER,  together  with  the  VGL,  is  applicable  to  certain 
vertical  agreements  generate  costs  for  you  (or,  in  the  case  of  a  business  association,  for 
the members you are representing)? 

Some  of  the  41  respondents  (35  being  business  associations)  that  do  not  know  if  the 
assessment of the application of the VBER and VGL generates costs indicate that they do 
not have information on the costs incurred by their members. 

Stakeholders  were  also  asked  to  provide  the  Commission  with  a  qualitative  and  a 
quantitative estimate of the costs linked to the assessment of the applicability of the 
VBER  and  the  VGL.  Concerning  the  qualitative  estimate,  some  respondents  describe 
the nature of the costs they incur. Most replies refer to the fees for external consultants 
(lawyers and economists), as well as to costs for internal legal advice and the time spent 
by their commercial teams to negotiate and review contractual documents.  

The  majority  of  respondents  indicate  that  they  are  not  able  to  provide  a  quantitative 
estimate of the costs. In this respect, some companies explain that it is not possible for 
them to identify these costs among all the compliance and legal costs they incur. Some 
business associations indicate that they do not have an insight into the costs incurred by 
their  members  in  this  respect.  However,  a  few  respondents  provide  quantitative  cost 
estimates.  Two  large  companies  indicate  that  the  assessment  costs  can  amount  to 
respectively 0,5% and 20% of their turnover. In terms of value, one small company states 
that the assessment costs range between 50 and 100 euros per company per year, while 
one large company replies that the costs amount to several thousand euros.  

To the question dealing with  the  proportionality  of  the  costs  and  benefits  generated 
by the VBER and the VGL, 52 respondents147 indicate that the costs generated by the 
assessment of the  applicability of the  VBER are proportionate to  the benefits  it brings. 

147  Primarily  business  associations  and  companies,  since  legal  experts  and  other  stakeholders  mostly 

indicated that they did not know or that the question was not applicable to them. 

111 

 
 
                                                           
They consider that the benefits of the safe harbour resulting from the application of the 
VBER outweigh the costs incurred due to the assessment it requires. However, they all 
acknowledge that it is not possible to give a quantitative estimate of the related costs. 

Does  the  assessment  of  whether  the  VBER,  together  with  the  VGL,  is  applicable  to  certain 
vertical  agreements  generate  costs  proportionate  to  the  benefits  they  bring  for  you  (or,  in  the 
case of a business association, for the members you are representing)? 

Some of the 14 respondents (with no major difference between stakeholder groups) who 
indicate that the costs incurred are not outweighed by the benefits consider that the costs 
to obtain advice on the applicability of the VBER (mainly legal fees) are high and that 
they are not always compensated in terms of legal certainty.  

Would the costs of ensuring compliance of your vertical agreements (or, in the case of a business 
association, the vertical agreements of the members you are representing) with Article 101 of the 
Treaty increase if the VBER were not prolonged? 

If  the  VBER  were  not  prolonged,  99  respondents  (with  no  major  difference  between 
stakeholder  groups)  consider  that  the  costs  linked  to  ensuring  compliance  of  vertical 

112 

 
 
 
agreements  with  Article  101  of  the  Treaty  would  increase  and  that  the  legal  certainty 
provided  by  the  VBER  would  decrease  or  even  disappear.  Some  respondents  also 
indicate  that  the  divergences  between  national  authorities  and  courts  when  applying 
Article 101 of the Treaty to vertical agreements are likely to increase. They also note that 
litigation related costs would increase.  

Besides,  respondents  mention  that  business  organisations  in  all  sectors  would  have  to 
spend  more  time  and  resources  (notably  fees  for  lawyers  and  economists)  to 
systematically self-assess the compliance of their vertical agreements with Article 101 of 
the  Treaty.  In  this  regard,  some  law  firms  state  that  a  withdrawal  of  the  VBER  would 
increase  the  time  spent  to  assess  vertical  restrictions  and  that  legal  fees  would  raise 
accordingly. Several respondents also stress that SMEs would be especially affected by 
any such cost increase since they do not have the human and financial resources needed 
to perform such a complex self-assessment.  

Some respondents (with no major difference between stakeholder groups) also point out 
that the withdrawal of the VBER could have a "chilling effect", as companies could be 
deterred  from  applying  innovative  solutions  or  develop  new  business  models  whose 
compatibility  with  Article  101  of  the  Treaty  would  have  to  be  fully  assessed  in  each 
individual case (instead of being block exempted).  

One  respondent  estimates  that  the  increase  in  costs  due  to  the  non-prolongation  of  the 
VBER would at least amount to a factor of 10.  

Have the costs generated by the application of the VBER and the VGL increased as compared to 
the previous legislative framework (Reg. 2790/1999 and related Guidelines)? 

Regarding  the  costs  generated  by  the  application  of  the  VBER  and  the  VGL 
compared to those incurred under Regulation 2790/1999 and the related guidelines, 
some respondents indicate that the costs have decreased because the VBER and the VGL 
are  clearer  than  the  previous  Regulation.  In  contrast,  21  respondents  (primarily 
companies  and  business  associations  representing  the  supply  side  of  the  vertical  chain, 

113 

 
 
but  also  some  legal  experts)  indicate  that  the  costs  have  increased  compared  to  those 
incurred  under  the  previous  Regulation.  According  to  them,  the  increase  would  result 
from  market  developments  such  as  growing  e-commerce  and  online  sales,  and  the 
diverging  interpretation  of  the  current  rules  by  national  authorities  and  courts.  None  of 
the respondents provides a quantitative estimate of the increase or decrease of the costs 
generated  by  the  application  of  the  VBER  and  the  VGL  as  compared  to  the  previous 
Regulation.  

Relevance (Is EU action still necessary?) 

In order to evaluate whether the VBER and the VGL are still up to date in light of new 
market developments or other changes, stakeholders were asked several questions. 

142 out of 164 respondents (approximately 87%) expect effects of some type in case the 
VBER  were  to  be  prolonged  and  the  VGL  maintained  without  any  change.  6 
respondents (approximately 4%) do not expect any effects, arguing that both the current 
level  of  legal  certainty  as  well  as  the  current  uncertainties  would  remain  unchanged  in 
such  a  scenario.  16  respondents  (approximately  10%)  do  not  know.  There  is  no  major 
difference between stakeholder groups in these replies. 

Out of the 142 respondents that expect some effects, 80 (approximately 49%) expect only 
positive effects, 62 respondents (approximately 38%) expect only negative effects and 8 
respondents  (approximately  5%)  expect  positive  as  well  as  negative  effects.  29  of  the 
respondents who believe that they would experience negative effects if the VBER were 
to be prolonged and the VGL maintained without any changes point out that the current 
framework  is  not  fit  for  new  developments  and  that  clarifications  and  adaption  of  the 
rules  are  vital  in  face  of  the  increasing  digitisation  of  the  economy,  in  particular 
regarding online platforms and online sales. The respondents that expect positive effects 
mainly  explain  that  the  prolongation  of  the  legal  framework  would  be  positive,  in  that 
this  option  is  preferable  to  no  prolongation  at  all  (i.e.  a  scenario  in  which  the  VBER 
would expire and the VGL would be withdrawn). 40 of them consider the prolonging of 
the  VBER  necessary  to  provide  legal  certainty.  In  this  regard,  15  respondents  are 
concerned  about  losing  the  benefit  of  commercial  agency  agreements  being  expressly 
excluded  from  Article  101(1)  of  the  Treaty.  41  respondents  also  advise  to  update  the 
VBER by taking into account recent market developments.  

To the question regarding possible effects in case the VBER were not to be prolonged 
and the VGL were to be withdrawn, out of 164 respondents, 135 (approximately 82%) 
expect  only  negative  effects,  5  respondents  (approximately  3%)  expect  only  positive 
effects,  1  respondent  (approximately  1%)  expects  positive  and  negative  effects,  1 
respondent  (approximately  1%)  expects  no  effect  and  22  (approximately  13%)  do  not 
know.  86  respondents  argue  that  not  prolonging  the  VBER  and  withdrawing  the  VGL 
would lead to a severe loss of legal certainty in the assessment of vertical agreements. 35 
respondents also point out that this would lead to higher compliance costs and legal fees, 
with  21  seeing  SMEs  being  particularly  put  at  a  disadvantage,  as  they  do  not  have  the 
financial  resources  to  obtain  extensive  economic  and  legal  advice.  12  respondents  also 
mention concerns regarding a possible decrease in harmonisation among Member States, 

114 

 
as  there  could  be  an  increase  in  differing  interpretations  by  the  national  competition 
authorities  and  national  courts.  Finally,  16  see  the  risk  that  not  prolonging  the  current 
framework would discourage them from entering into distribution agreements and reduce 
the incentives for businesses to invest, thus slowing down innovation.  

Do you see the need for a revision of the VBER in light of major trends and/or changes during the 
past  5  years  (e.g.  the  increased  importance  of  online  sales  and  the  emergence  of  new  market 
players)? 

To the question whether there is a need for a revision of the VBER in light of major 
market  trends  and/or  changes,  among  the  30  respondents  (including  business 
associations, companies  and legal  experts) who answer negatively, 18 consider that the 
VBER  is  sufficient  and  flexible  enough,  but  see  the  need  to  update  the  VGL.  On  the 
other hand, 10 of the respondents who answer negatively see also no reason to update the 
VGL and consider the current legal framework to be sufficient. 

115 

 
 
Do  you  see  the  need  for  a  revision  of  the  VGL  (including  Section  VI)  in  light  of  major  trends 
and/or  changes  during  the  past  5  years  (e.g.  the  increased  importance  of  online  sales  and  the 
emergence of new market players)? 

As  to  the  need  for  a  revision  of  the  VGL  in  light  of  major  market  trends  and/or 
changes,  only  11  respondents  (primarily  business  associations)  answer  negatively, 
stating  that  the  current  rules  are  sufficient.  Among  the  respondents  who  answer 
positively,  the  underlying  reasons  provided  (also  as  regards  the  VBER)  are  overall 
consistent with what they answered to the following question, which asked them to list 
candidate  areas  for  a  possible  revision,  together  with  the  major  trends  motivating  the 
need for such a revision. 

93  out  of  164  respondents  (approximately  57%)  replied  to  the  question  asking  them  to 
list  candidate  areas  for  a  possible  revision,  together  with  the  major  trends 
motivating  the  need  for  such  a  revision.  The  respondents  (across  all  stakeholder 
groups) identify a large variety of areas of both  the VBER  and the VGL as requiring a 
revision.  Different  stakeholder  groups  mention  different  areas  with  varying  degrees  of 
importance  and  not  all  stakeholder  groups  have  the  same  view  as  to  what  the  revision 
should look like in practice. 

Many  respondents  point  to  the  need  for  a  revision  of  the  guidance  concerning  online 
sales restrictions (especially in the context of the distinction between passive and active 
sales). The major trends/changes motivating the need for a revision in this regard are the 
increasing  importance  of  online  sales,  including  sales  through  online  marketplaces  and 
online platforms, as well as the increasing importance of online advertising.  

Many respondents also mention the hardcore restrictions relating to selective distribution 
as  well  as  the  guidance  of  the  VGL  on  this  topic  as  areas  that  need  to  be  revised.  The 
major trends/changes motivating the need for a revision in this regard are the increasing 
prevalence of selective distribution in the EU across a variety of sectors. 

Another  area  identified  by  the  respondents  is  resale  price  maintenance,  which  is 
considered a hardcore restriction under the current rules, and the related guidance in the 

116 

 
 
VGL.  In  this  regard,  respondents  referred  to  the  increasing  use  of  price  monitoring 
software  and  price  algorithms,  free-riding  issues,  as  well  as  potential  efficiencies 
stemming from resale price maintenance and the latest economic theories on this topic. 

Other areas in need of a revision mentioned by respondents include the list of hardcore 
restrictions, the excluded restrictions (especially as regards non-compete obligations), the 
guidance related to agency agreements, the rules applying to vertical agreements entered 
into  between  competing  undertakings,  the  market  share  thresholds  (in  particular  their 
application to the relevant markets) and the guidance on franchising (notably as regards 
the transfer of know-how). The major trends/changes motivating the need for a revision 
in  this regard are the increased market  concentration,  the dual  role of manufacturers as 
distributor  and  competing  seller,  the  increased  vertical  integration  of  suppliers  and  the 
incoherent  application  of  the  current  rules  across  Member  States  (e.g.  regarding  "most 
favoured nation" or "price parity" clauses). 

Many  respondents  also  referred  to  the  need  to  reflect  the  recent  case  law  (e.g.  the 
judgment of the Court of Justice in Coty) as well as the conclusions of the Commission’s 
e-commerce sector inquiry. 

Is  there  any  area  for  which  the  VBER  and/or  the  VGL  currently  do  not  provide  any  guidance 
while it would be desirable? 

To  the  question  whether  there  are  areas  for  which  the  VBER  and/or  the  VGL 
currently  do  not  provide  any  guidance  while this  would  be  desirable,  of  the  85 
respondents  (primarily  legal  experts  and  companies)  who  reply  affirmatively,  some 
indicate  that  it  would  be  desirable  for  the  VBER  and/or  the  VGL  to  provide  more 
guidance on several aspects related to online sales. Additional areas mentioned include p 
clauses,  online  search  advertising  restrictions,  the  use  of  price  comparison  websites, 
vertical exchanges of information between competitors, territorial supply constraints and 
the practice of retail channelling. 

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Coherence (Does the policy complement other actions or are there contradictions?) 

Based  on  your  experience,  are  the  VBER  and  the  VGL  coherent  with  other  instruments  that 
provide  guidance  on  the  interpretation  of  Article  101  of  the  Treaty  (e.g.  other  Block  Exemption 
Regulations, the Horizontal Guidelines and the Article 101(3) Guidelines)? 

To the question whether the VBER and the VGL are coherent with other instruments 
that  provide  guidance  on  the  interpretation  of  Article  101  of  the  Treaty,  the 
respondents that answer negatively mainly point to inconsistencies with the Technology 
Transfer Block Exemption Regulation, the Horizontal Guidelines and the Motor Vehicle 
Block Exemption Regulation. 

Based on your experience, do the VBER and the VGL contradict other existing and/or upcoming 
legislation and/or policies at EU or national level? 

To  the  question  whether  the  VBER  and  the  VGL  contradict  other  existing  and/or 
upcoming legislation and/or policies at EU or national level, the 58 respondents that 
reply  positively  express  concerns mostly  related  to  divergence in the  application of the 

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EU  competition  rules  by  national  competition  authorities  and  courts.  Respondents  are 
concerned about the different interpretation and standards of enforcement when it comes 
to  parity  clauses,  dual  pricing,  resale  price  maintenance  and  the  criteria  to  assess  the 
compatibility of online platform bans (as set out in the judgment of the Court of Justice 
in  Coty).  Nine  respondents  highlight  possible  inconsistencies  with  Regulation  (EU) 
2018/302 on geo-blocking and seven respondents report contradictions at national level, 
with six respondents referring to several provisions of the French Commercial Code (e.g. 
Article L 330-1 Code de Commerce, which limits exclusive purchasing agreements to a 
maximum  of  10  years).  Three  respondents  also  express  the  view  that  the  current 
provisions  of  the  VBER  and  the  VGL  would  be  curtailing  their  fundamental  rights  to 
property  and  freedom  of  profession.  Furthermore,  the  franchise  sector  considers  the 
definition of know-how in Article 1 of the VBER to be inconsistent with the definition of 
know-how under Directive (EU) 2016/943.  

EU Added Value (Did EU action provide clear added value?) 

Do  the  VBER  and  the  VGL add  value  in  the  assessment  of  the  compatibility  of  vertical 
agreements  with  Article  101  of  the  Treaty  compared  to,  in  their  absence,  a  self-assessment  by 
undertakings  based  on  other  instruments  that  provide  guidance  on  the  interpretation  of  Article 
101  of  the  Treaty  (e.g.  the  Article  101  (3)  Guidelines,  the  enforcement  practice  of  the 
Commission and national competition authorities, as well as relevant case law at EU and national 
level)? 

To  the  question  whether  the  VBER  and  the  VGL  add  value,  among  the  144 
respondents that reply positively, 79 consider that the VBER and the VGL contribute to 
legal certainty, in that they provide a harmonised approach to assess vertical agreements 
throughout the EU. 30 also point out that self-assessing compliance with Article 101 of 
the  Treaty  in  the  absence  of  the  VBER  and  the  VGL  would  be  more  costly  and 
administratively burdensome. 20 respondents who consider the VBER and the VGL to be 

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important  tools  state  that  they  facilitate  the  consistent  application  of  Article  101  of  the 
Treaty across Member States.  

2.3. SUMMARY OF THE TARGETED CONSULTATION OF NATIONAL COMPETITION 

AUTHORITIES  

A summary report of the consultation of national competition authorities was published 
in December 2019.148 

In  the  context  of  the  evaluation  of  the  VBER  and  the  related  Guidelines  on  Vertical 
Restraints  ("VGL"),  the  Commission  asked  the  National  Competition  Authorities 
("NCAs")  to  share  their  experience  in  applying  the  VBER.  NCAs  are  bound  by  the 
VBER when assessing vertical agreements. In contrast, the VGL are non-binding for the 
NCAs, but nevertheless taken into account by all of them.  

The Commission received 20 contributions.149 

Overall,  the  NCAs  consider  that  the  Commission  should  maintain  both  instruments, 
while taking the opportunity of the review to clarify and adjust the current rules, notably 
in light of market developments over the last decade. 

The purpose of this summary is to outline the main points raised by the NCAs without 
regard to the number of contributions addressing a particular point or whether a particular 
point of view is shared by all the NCAs. Therefore, in the following, reference is made 
generically to "NCAs". However, for issues on which NCAs expressed diverging views, 
both sides of the argument are presented.150  

This summary provides the NCAs’ general views on the evaluation of the VBER and the 
VGL  following  the  five  evaluation  criteria  established  by  the  Better  Regulation 
Requirements,151 i.e. effectiveness, efficiency, relevance, coherence and EU added value 
(see  section  I).  It  also  summarizes  the  comments  made  by  the  NCAs  as  regards  the 
functioning of some specific aspects of the VBER and the VGL (see section II). 

I.  GENERAL VIEWS OF THE NCAS 

Regarding the effectiveness of the VBER and the VGL, NCAs generally share the view 
that  both  texts  have  met  their  objectives  and  contributed  to  promote  good  market 
performance in the EU. In particular, they have provided helpful guidance to NCAs and 
legal certainty to stakeholders for the assessment of vertical agreements and restrictions. 

148  The summary report is available at 

https://ec.europa.eu/competition/consultations/2018_vber/vber_ncas_summary.pdf. 

149  One contribution was submitted by one of the Contracting Parties to the EEA Agreement.  
150  The  contributions  received  from  the  NCAs  cannot  be  regarded  as  the  official  position  of  the 

Commission and its services and thus do not bind the Commission. 

151  The  better  regulation  requirements  are  about  designing  and  evaluating  EU  policies  and  laws 
transparently on the basis of evidence and the views of stakeholders and citizens. They are applicable to 
all policy areas and aim for targeted and proportionate regulation that does not go further than required 
to achieve a given objective, while bringing benefits at minimum cost. 

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However,  their  effectiveness  could  be  increased  by  providing  clarifications  and  further 
guidance on some issues (see section II). Moreover, the VBER and the VGL should be 
updated  to  take  account  of  recent  market  developments,  new  business  models  and  new 
technologies.  NCAs  also  suggest  integrating  the  recent  case  law  in  relation  to  vertical 
restrictions into the VBER and/or in the VGL.  

Regarding the efficiency of the VBER  and the VGL, NCAs  generally  consider that the 
costs incurred by NCAs for the assessment of the compliance of vertical agreements with 
Article 101 of the Treaty would increase in the absence of the VBER and VGL. NCAs 
also consider that both instruments contribute to reducing the costs borne by stakeholders 
of ensuring the  compliance of vertical  agreements  with  Article 101 of the Treaty, even 
though  this  reduction  is  difficult  to  measure.  However,  as  NCAs  pointed  out,  it  is 
difficult  for  businesses,  especially  SMEs,  to  self-assess  the  lawfulness  of  a  vertical 
agreement  based  on  the  VBER  and  VGL  without  seeking  an  opinion  from  a  law  firm 
specialised in competition law, which entails certain costs.  

Regarding the relevance of the VBER and the VGL, NCAs generally consider that both 
texts  are  useful  and  should  therefore  be  maintained.  However,  NCAs  indicate  that  the 
VBER and VGL should be revised in order to reflect recent market developments. New 
forms of distribution have emerged due to the increased importance of online sales and 
new  players  are  now  active  on  many  markets  (e.g.  online  platforms).  These  market 
developments  have  influenced  and  changed  the  behaviour  of  market  participants  and 
consumers, thus justifying an update of the VBER and the VGL, as well as the provision 
of guidance on the assessment of new vertical practices.  

NCAs  generally  consider  that  the  VBER  and  the  VGL  are  coherent  with  other 
instruments that provide guidance on the interpretation of Article 101 of the Treaty. That 
being  said,  NCAs  note  that  the  VBER  and  the  VGL  may  be  affected  by  the  EU 
Regulation  on  promoting  fairness  and  transparency  for  business  users  of  online 
intermediation  ("Platform-to-Business  (P2B)  Regulation"),  which  regulates  certain 
aspects of the relationship between platforms and their business partners. Consequently, 
this  Regulation  should  be  taken  into  account  during  the  review  process  to  ensure  that 
both instruments complement and do not contradict each other. 

NCAs  generally  consider  that  the  VBER  and  VGL  provide  clear  added  value  in  the 
assessment  of  the  compatibility  of  vertical  agreements  with  Article  101  of  the  Treaty. 
Therefore,  any  lapse  of  the  VBER  and  the  VGL  would  seriously  undermine 
harmonisation in the enforcement of Article 101 of the Treaty across the EU. 

II. 

SPECIFIC ISSUES RAISED BY NCAS 

When evaluating the functioning of the VBER and VGL, NCAs have identified a number 
of specific issues. In the following, these issues are grouped in six main categories: (i) the 
scope of application of the VBER, (ii) hardcore restrictions, (iii) vertical issues related to 
e-commerce,  (iv)  retail  most  favourite  nation  or  price  parity  clauses  ("retail  MFNs"), 
(v) frequently used distribution systems, and (vi) withdrawal/disapplication of the VBER. 

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i.  THE SCOPE OF APPLICATION OF THE VBER 

1.  Regarding the definition of vertical agreements (Article 1(1)(a) of the 

VBER and paragraphs 24-26 VGL) 

NCAs  indicate  that  the  current  definition  of  vertical  agreements  does  not  take  into 
account the emergence of new market players, notably online platforms and the nature - 
vertical or horizontal - of their commercial relationship with the businesses that use them 
to sell their products and services.  

2.  Regarding vertical agreements that generally fall outside the scope of  
Article 101(1) of the Treaty ("agency agreements"; paragraphs 12-21 
VGL) 

NCAs indicate that certain paragraphs of the VGL dealing with the treatment of agency 
agreements  do  not  capture  well  the  distinction  between  independent  traders  and  agents 
acting on behalf of a supplier, especially with regard to the difference in the legal and/or 
commercial risks incurred.  

More  specifically  with  regard  to  online  platforms,  there  seem  to  be  diverging  views 
among  NCAs  as  to  whether  they  can  qualify  as  genuine  agents.  Some  NCAs  consider 
that certain characteristics of online platforms indicate that they cannot form an integral 
part of the principal's distribution system and should therefore not be treated as genuine 
agents (e.g. platforms usually bear the entire risk of investing in their infrastructure, deal 
with  many  different  -  often  smaller  -  principals  and  can  have  a  strong  bargaining 
position).  Other  NCAs  take  the  view  that,  depending  on  the  circumstances,  online 
platforms could qualify as an agent, with the result that Article 101(1) of the Treaty does 
not apply to intra-brand restrictions agreed between the platform and the principal.  

In light of the above, NCAs advocate for more guidance on relevant factors to be taken 
into  account  in  the  assessment  whether  online  platforms  can  qualify  as  agents,  which 
should be carried out on a case-by-case basis. Such guidance could take into account the 
following aspects: (i) in  some circumstances online platforms appear to bear more than 
insignificant  risks;  (ii)  the  nature  of  the  relationship  between  suppliers  and  online 
platforms is very different from a traditional agency model where large suppliers act as 
principals using various smaller (independent) sales agents to sell their goods or services, 
as  the  online  platform  that  acts  as  an  agent  is  often  the  undertaking  with  the  strongest 
market position; and (iii) online platforms invest heavily in data-gathering and processing 
capabilities and keep data of third-party customers exclusively for themselves.  

3.  Regarding the conditions for the application of the block exemption 

(Article 2 of the VBER) 

Vertical agreements entered into between an association of undertakings 
and its members (Articles 2(2) and 8 of the VBER and paragraphs 29-30 
VGL) 

NCAs  indicate  that  the  VGL  do  not  provide  sufficient  guidance  on  the  fact  that  the 
restrictions in vertical agreements (e.g. recommended resale prices and maximum resale 

122 

 
prices) between an association and its members or between an association and upstream 
suppliers, which satisfy Article 2(2) of the VBER, can only benefit from the safe harbour 
that  the  VBER  provides  if  the  conditions  set  out  in  Articles  3  to  5  of  the  VBER  are 
fulfilled and these agreements are also acceptable under the horizontal rules.  

NCAs also point out that more examples should be added in paragraphs 29 and 30 of the 
VGL  to  illustrate  how  to  apply  Article  2(2)  of  the  VBER  in  practice.  This  includes 
agreements  entered  into  in  the  context  of  voluntary  chains  consisting  of  a  number  of 
independent retailers  as  opposed to the so-called "capital chains" where all the retailers 
are owned by one company. 

Finally, NCAs indicate that the 50 million euros turnover threshold in Article 2(2) of the 
VBER could lead to the exemption of agreements that do not generate efficiencies. At the 
same time, NCAs appear to call into question whether this threshold is relevant at all in 
the current market conditions.  

Non-reciprocal vertical agreements between competitors (Article 2(4) of 
the VBER and paragraphs 27-28 of the VGL) 

NCAs indicate that the wording of Article 2(4) of the VBER does not provide sufficient 
clarity in relation to several aspects.  

First,  the  meaning  of  Article  2(4)  of  the  VBER  lacks  clarity  with  regard  to  the 
relationship between hybrid platforms and retailers. In particular, NCAs consider that it 
is  not  clear  if  hybrid  platforms,  acting  both  as  suppliers  of  intermediation  services  and 
retailers, should benefit from Article 2(4) of the VBER, since the hybrid model might not 
correspond to the ratio legis of this exception.  

Second,  Article  2(4)  of  the  VBER  arguably  lacks  clarity  on  the  interplay  with  the 
Horizontal Guidelines ("HGL"). For instance, paragraph 27 of the VGL does not clearly 
stipulate if the horizontal aspects of a mixed horizontal/vertical agreement must always 
be assessed under the HGL first. NCAs note that it is only if this first assessment leads to 
the  conclusion  that  the  cooperation  between  competitors  would,  in  principle,  be 
acceptable under the HGL that a second assessment under the VBER should be carried 
out. 

Third,  the  conditions  of  application  of  dual  distribution  to  service  providers  should  be 
clarified. Notably, the VGL should specify whether, in order to qualify as "a provider of 
services" for the purpose of Article 2(4)(b), the supplier must himself be at the origin of 
the  service  concerned  or  if  the  mere  reselling  of  the  service  supplied  by  another 
(upstream) undertaking is sufficient.  

4.  Regarding the market share threshold (Articles 3 and 7 of the VBER 

and paragraphs 86-95 VGL) 

NCAs indicate that, based on their experience and subject to the points set out below, the 
30% market share threshold is generally appropriate. 

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NCAs point out that it may not be clear as to whether, for the purpose of assessing the 
market shares of the supplier and the buyer, it is necessary to define one or, conversely, 
different (separate) geographic markets (i.e. the relevant geographic market on which the 
supplier sells the contract goods or services and the relevant geographic market on which 
the buyer purchases the contract goods or services).  

NCAs  highlight  difficulties  regarding  the  application  of  the  market  share  threshold  in 
relation  to  online  platforms.  First,  NCAs  point  to  the  case  of  a  "distributor  platform152 
where the calculation of the market  share could  be based on each market on which the 
platform  "purchases"  the  products  sold  via  the  platform.  In  contrast,  when  determining 
the market share of a "supplier platform"153 it has to be established whether the relevant 
market is confined to the supply of platform services or if other suppliers of comparable 
services (e.g. in the offline world) have to be taken into account, and if so to what extent. 
Second,  NCAs  point  out  that  platforms  often  operate  on  multi-sided  markets.  In  these 
cases,  it  is  not  clear  whether  the  parties  to  a  vertical  agreement  have  to  determine 
whether  the  30%  market  share  threshold  is  met  on  each  side  of  the  market  or  whether 
only one side of the market should be considered.  

NCAs  also  indicate  that  (the  level  of)  the  market  share  thresholds  could  be  inadequate 
when  it  comes  to  online  platforms.  First,  turnover-based  market  shares  may  be  less 
relevant  as  indicators  for  market  power  of  platforms  than  other  metrics  such  as,  for 
example,  resources,  access  to  data  and  network  effects.  Second,  a  30%  market  share 
threshold could be too high since platforms may have a certain degree of market power 
even  below  this  threshold  (due  to  access  to  data  and  network  effects)  and  when 
considering the difficulties with withdrawing the application of the VBER. Third, as the 
degree  of  market  power  of  multi-sided  platforms  might  be  different  depending  on  the 
characteristic  of  the  market  concerned  and  relevant  consumer  behaviour  (e.g.  multi-
homing or single homing), the market share threshold for multi-sided platform may have 
to be differentiated in order to better reflect different market circumstances.  

In addition, NCAs stress that the 30% market share threshold does not seem to function 
properly when applied to oligopolistic markets. In markets with two to four large players, 
the individual market shares might fluctuate around 30%, so that even if all members of 
the oligopoly apply identical practices, some may benefit from  the VBER, while others 
may  fall  outside  its  scope.  This  could  create  arbitrary  results  and  possible  market 
distortions.  This  calls  for  a  deeper  assessment  of  cumulative  effects  of  similar  vertical 
restrictions  and  the  possible  introduction  of  an  additional  oligopoly  threshold  in 
combination with a lower market share threshold (e.g. individual market share of at least 
15% for each undertaking plus a combined oligopoly market share of 50%). 

152  Distributor  platforms  can  be  understood  those  directly  involved  in  the  conclusion  of  individual 
transactions via the platform and could therefore qualify as a buyer of the product or service vis-à-vis 
the manufacturers and as a supplier vis-à-vis end customers. 

153  Supplier  platforms  provide  only  the  infrastructure  for  seller  and  buyers  to  interact  and  conclude  a 

particular transaction. 

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ii.  HARDCORE RESTRICTIONS  

NCAs generally recognise the importance of the list of hardcore restrictions in Article 4 
of the VBER. However, based on their experience with applying the VBER, NCAs point 
out that some notions referred to in Article 4 are not sufficiently clear.  

1.  Regarding the concept of hardcore restrictions and restrictions "by 

object" 

NCAs  note  that  the  VBER  does  not  establish  a  clear  distinction  between  hardcore 
restrictions and restrictions "by object" and that the VGL do not provide more clarity in 
this regard.  

2.  Regarding the distinction between active and passive sales 

NCAs  point  out  that  the  VBER  does  not  contain  any  definition  of  active  sales  and 
passive sales. In fact, Article 4(b)(i) of the VBER only states that active sales restrictions 
do not qualify as hardcore restrictions in the context of exclusive distribution agreements. 
The VGL only contain a few paragraphs setting out examples of active and passive sales 
restrictions,  which  do  arguably  not  provide  sufficient  legal  certainty  in  this  regard.  For 
example, paragraph 53 of the VGL does not clearly state whether exclusive distribution 
agreements are the only context in which restrictions of active sales are exempted from 
the hardcore restriction defined in Article 4(b) of the VBER. In addition, paragraph 56 of 
the VGL does not specify whether the criterion of overall equivalence”between the sales 
restrictions  imposed  on  brick-and-mortar  shops  and  those  imposed  on  internet  dealers 
applies to all types of distribution systems or only to selective distribution. 

NCAs also consider that only relying on examples contained in the VGL may not provide 
sufficient guidance on how to deal with internet sales (as active or passive sales) notably 
with regard to the increasing ability to target advertisement online.  

There  is  also  a  need  for  more  guidance  regarding  sales  that  take  place  outside  the 
conventional selling process. Notably, it is not clear if bids submitted in reply to a public 
call for tender should be considered active or passive sales. This distinction is however 
important since a qualification as active sales would limit the participation of bidder from 
outside  the  territory.  Such  limitation  could  lead  to  market  segmentation  along  national 
lines, which is contrary to EU procurement rules and the EU’s single market objective. 

3.  Regarding various hardcore restrictions  

Resale price maintenance (Article 4(a) of the VBER and paragraphs 48-
49 VGL) 

NCAs  expressed  different  views  regarding  the  legal  treatment  of  resale  price 
maintenance  ("RPM")  in  the  VBER.  Some  NCAs  raise  the  question  whether  the 
presumption of illegality set out in the VBER - albeit rebuttable - is consistent with RPM 
arguably being on balance welfare enhancing under certain circumstances. Others point 
to  the enforcement practice in  recent  years, which has shown (i) the widespread use of 
such  restrictions,  (ii)  their  severe  effects  on  competition  and  the  lack  of (substantiated) 

125 

 
efficiency  claims,  as  well  as  (iii)  the  existence  of  less  restrictive  means  to  achieve  the 
same results (i.e. RPM is not indispensable). They therefore consider that RPM rightfully 
figures in the list of hardcore restrictions in the VBER. 

There is agreement among NCAs that the VBER and the VGL do not provide sufficient 
legal certainty on "grey areas" of RPM. Notably, more guidance is needed to address the 
lack of clarity as regards the circumstances in which recommended resale prices amount 
to  RPM.  NCAs  also  point  to  difficulties  with  applying  the  VBER  to  atypical  price 
restrictions  that  can  constitute  RPM.  In  particular,  Article  4(a)  of  the  VBER  and 
paragraph 48 of the VGL do not specify whether certain practices restricting the ability 
of  buyers  to  determine  their  selling  price  should  be  considered  RPM  (e.g.  practices 
prohibiting  discounts  applied  by  retailers,  or  practices  compelling  retailers  to  apply  a 
price within a specific range defined by the supplier). In addition, the distinction between 
clear-cut RPM and hub & spoke scenarios is currently not reflected in the VBER and the 
VGL.  

NCAs  consider  that  the  increasing  price  transparency  -  resulting  from  boosted  e-
commerce  and  online  advertising  -  and  the  development  of  advanced  price  monitoring 
software  may  exacerbate  the  negative  effects  of  RPM  strategies.  These  elements  are 
currently  not  taken  into  account  in  the  RPM-related  parts  of  the  VGL,  notably  when  it 
comes  to  the  notion  of  "supportive"  measures  to  identify  price-cutting  distributors  (see 
paragraph 48 of the VGL). Similarly, the VGL section on "resale price restrictions" does 
not provide examples of the types of practices that may amount to a form of pressure or 
incentive to  apply a fixed or a recommended resale price, thus resulting  in RPM in the 
sense of Article 4(a) of the VBER.  

NCAs  further  indicate  that  the  VBER  and  the  VGL  arguably  do  not  provide  sufficient 
legal certainty with regard to the assessment of resale price restrictions in the context of 
selective  distribution  networks.  In  this  particular  context,  suppliers  may  argue  that  the 
protection of their brand image or the characteristics of their products or services would 
justify  practices  that  restrict  the  ability  of  buyers  to  determine  the  resale  price.  NCAs 
would therefore like the VGL to specify whether (and, if so, to what extent) suppliers can 
indeed use these justifications to interfere in the pricing policy of their retailers.  

Territorial/customer  restrictions  and  exceptions  to  these  restrictions 
(Article 4(b) of the VBER and paragraphs 50-55 of the VGL) 

NCAs  question  the  effectiveness  of  the  VBER  regarding  the  prevention  of  territorial 
restrictions,  which  are  contrary  to  the  EU's  single  market  objective.  In  fact,  many 
stakeholders  –  mostly  SMEs  –  that  are  facing  problems  in  relation  to  territorial  supply 
restrictions, applied by their suppliers, may not be able to judge whether these restrictions 
infringe Article 101 of the Treaty.  

NCAs  point  to  difficulties  with  applying  Article  101(3)  of  the  Treaty  to  territorial 
restrictions  that  raise  obstacles  to  market  integration  but  also  create  efficiencies.  It  is 
notably  unclear  how  to  balance  efficiencies  for  consumers  (e.g.  more  efficient 
distribution)  against  harm  to  market  integration  in  such  situations,  given  that  the  two 
effects are difficult to quantify by the same measure.   

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NCAs also note that Article 4(b) of the VBER and paragraph 55 of the VGL are not clear 
about possible limitations on combining selective and exclusive distribution.  

iii.  VERTICAL ISSUES RELATED TO E-COMMERCE 

1.  Regarding online sales restrictions (paragraphs 52-54 of the VGL)  

NCAs indicate that clarifications and adjustments in light of recent market developments 
and new case law are particularly needed with regard to online sales restrictions. In fact, 
the massive growth of e-commerce during the last decade has had a profound impact on 
distribution strategies. As a result, NCAs have been facing challenges when applying the 
VBER  to  new  types  of  vertical  restrictions.  NCAs  consider  that  further  guidance  is 
needed for the assessment of such restrictions, notably due to their often complex nature. 
NCAs  highlight  that  the  VBER  and  the  VGL  are  not  up-to-date  as  regards  the  type  of 
online restrictions that are allowed in the context of selective distribution, notably in light 
of recent national and Union case law.  

NCAs also point to the need for more complete, coherent and up-to-date guidance on the 
assessment of online sales restrictions, especially with regard to restrictions on the use of 
third-party online platforms and price comparison websites, as well as on brand bidding 
in online advertising. In particular, NCAs indicate that it is not clear, if and under which 
circumstances these restrictions are considered hardcore restrictions and whether there is 
a  difference  in  approach  with  regard  to  restrictions  relating  to  "where"  or  "to  whom" 
distributors  sell  a  product  or  service  as  compared  to  restrictions  relating  to  "how" 
distributors  sell  a  product  or  service.  NCAs  note  that  it  is  also  not  clear  whether  the 
assessment of online sales restrictions differs depending on the distribution system used 
(e.g. selective distribution, franchising or exclusive distribution). Further clarity seems to 
be needed on whether these three types of restrictions are considered restrictions of active 
or  passive  sales  in  the  meaning  of  the  VBER  and  how  they  should  be  assessed  if  the 
market  share  thresholds  in  Article  3  VBER  are  exceeded  and  the  exemption  therefore 
does not apply. 

The NCAs’ views on specific online sales restrictions are explained in more detail below. 

Restrictions on the use of third-party online platforms 

NCAs  indicate  that  there  is  a  lack  of  clarity,  both  in  the  VBER  and  in  the  VGL,  as 
regards  the  rules  applicable  to  bans  on  sales  via  third-party  online  platforms  ("online 
platform bans"). NCAs expressed different views regarding this type of restriction.  

Some  NCAs  consider  that  the  protection  of  a  supplier's  brand  image,  which  is  often 
raised as a justification for platform bans, may actually be used as a pretext to reduce the 
number  of  online  sellers  for  a  particular  product  or  service  and  to  avoid  price 
transparency  and  price  competition,  which  can  significantly  impair  the  business 
opportunities  of  distributors  and  consumer  choice.  Therefore,  online  platform  bans 
should be considered a hardcore restriction. Other NCAs favour a case-by-case analysis 
in  order  to  evaluate  whether  such  a  restriction  could  be  objectively  justified  in  a 
particular  case.  In  any  event,  the  NCAs  consider  that  more  guidance  is  needed  on  the 
compatibility of online platform bans with Article 101 of the Treaty.  

127 

 
Some  NCAs  argue  that  there  is  no  evidence  that  marketplaces  as  such  would  have  an 
impact  on the quality of distribution. Therefore,  not  quality-based  "per se" bans should 
not benefit from the VBER safe harbour but rather be subject to an individual assessment 
under  Article  101(3)  of  the  Treaty.  Moreover,  in  order  to  determine  whether  an  online 
platform ban amounts to a restriction on sales to specific customer groups (i.e. a hardcore 
restriction) or rather a restriction on the use of one available (online) distribution channel 
(i.e. not a hardcore restriction), it is not clear whether it is possible to take into account 
the  market  structure,  since  the  role  of  online  platforms  and  other  intermediaries  may 
differ between Member States.  

With reference to the Coty judgment delivered by the CJEU on 6 December 2017, NCAs 
point  out  that  it  is  not  clear  whether  the  judgement  applies  only  to  luxury  products  or 
more  generally  also  to  other  types  of  products.  NCAs  also  find  it  unclear  whether 
platform  bans  applied  outside  the  context  of  a  selective  distribution  system  should  be 
considered as "by object" or "by effect" restriction, or whether this restriction should be 
considered at all an infringement of Article 101 of the Treaty.  

Restrictions on the use of price comparison websites  

NCAs  would  welcome  guidance  on  how  to  qualify  prohibitions  on  the  use  of  price 
comparison  websites  and  to  what  extend  the  assessment  of  such  provisions  should  be 
different  from  the  approach  applied  to  online  platform  bans.  While  a  restriction  on  the 
use  of  third-party  platforms  seems  to  benefit  from  the  safe  harbour  provided  by  the 
VBER, an absolute restriction on the use of price comparison websites that is not linked 
to quality criteria may constitute a hardcore restriction under Articles 4(b) and 4(c) of the 
VBER.  In  fact,  price  comparison  websites  normally  redirect  consumers  to  the  website 
chosen to complete the transaction. As a result, in the context of a selective distribution 
system, a restriction of the use of price comparison websites by distributors appears less 
justified  than  an  online  platform  ban.  This  is  because  final  customers  carry  out  the 
transaction on the website of the authorised distributors, which should, in principle, meet 
the quality criteria required by suppliers. 

Restrictions on online search advertising 

NCAs indicate that there is a lack of clarity and guidance as regards online advertising 
restrictions.  

Online  advertising  restrictions,  such  as  those  that  limit  the  use  of  the  manufacturer's 
brand for advertising purposes ("brand bidding restrictions"), may de facto amount to a 
ban on online sales for smaller distributors with low traffic on their own websites which 
can only reach online consumers by means of advertisements on search engines or social 
networks.  At  the  same  time,  the  impact  of  such  brand-bidding  restrictions  in  a  vertical 
relationship may depend on the specific form of these restrictions and on their economic 
context.  

128 

 
Other requirements with regard to the use of the internet to resell goods 

NCAs  indicate  that  paragraph  54  of  the  VGL  is  not  sufficiently  clear  as  to  whether 
quality standards for the use of the internet may also be imposed in distribution systems 
other than selective distribution.  

NCAs also point out that there is a lack of clarity regarding the limits of the  possibility 
for  suppliers  to  require  their  distributors  to  operate  a  brick-and-mortar  shop.  This 
concerns notably the question (i) whether there is any ceiling to be applied on the number 
of required brick-and-mortar shops (e.g. absolute number per geographic area or relevant 
market vs. more subjective proportionality requirement), (ii) whether this requirement is 
only  a  concern for selective distribution or also  for other types of distribution systems, 
and (iii) whether such a requirement is, in principle, acceptable regardless of the market 
share of the supplier (i.e. also above 30%). 

2.  Regarding dual pricing (paragraph 52 of the VGL) 

NCAs  have  diverging  views  on  the  effects  that  the  growth  of  online  sales  has  had  on 
brick-and-mortar stores.  On the one hand, NCAs recognise that brick-and-mortar stores 
have difficulties competing with online stores given the significant investments required 
for  offline  sales.  Suppliers  cannot  however  compensate  hybrid  distributors  for  such 
investments  by  applying dual  pricing  since this  constitutes a hardcore restriction.  Since 
allowing suppliers to differentiate net wholesale prices between offline and online sales 
in such situations could be justified from an economic point of view and correspond to 
the public interest,  dual  pricing may have to  be  dropped from  the hardcore list.  On the 
other hand, NCAs indicate that dual pricing may have a similar effect as total online sales 
bans, since they can incentivise hybrid retailers to reduce their online sales, which would 
justify maintaining the current approach regarding dual pricing.  

NCAs also note that the VGL lacks guidance on the criteria for the individual assessment 
of  dual  pricing  under  Article  101(3)  of  the  Treaty  and  on  possible  alternatives  for 
remunerating  specific  services  rendered  by  physical  stores  that  would  not  raise 
competition concerns. 

NCAs further indicate that paragraph 52(d) of the VGL may not provide sufficient clarity 
on whether it only applies to  situations where a  manufacturer charges the same retailer 
different  prices  depending  on  the  sales  channels  used  (i.e.  online  or  offline),  or  also  to 
situations  where  a  manufacturer  applies  different  prices  for  offline,  hybrid  and  online 
retailers. NCAs also consider that there is a lack of guidance regarding the treatment of 
restrictions having an equivalent effect and the question whether paragraph 52(d) of the 
VGL applies to all types of distribution systems or only to selective distribution. NCAs 
highlight  that  the  latter  approach  would  likely  create  a  loophole  allowing  suppliers  to 
impose more restrictions on their distributors when no selective distribution is in place. 

Finally, NCAs point out that the VBER and the VGL do not provide guidance on online 
price discrimination, suggesting that this may be an area to address for the future. 

129 

 
3.  Regarding online platforms 

NCAs indicate that the VBER and the VGL do not provide sufficient guidance on how to 
treat  online  platforms,  which  do  not  fit  squarely  into  the  traditional  supplier/buyer 
relationship  reflected  in  the  conceptual  framework  of  the  VBER.  NCAs  suggest 
providing  the  necessary  guidance  in  the  context  of  a  dedicated  platform  section  in  the 
VBER, or at least in the VGL. Any such guidance should address the following aspects: 

First,  NCAs  point  out  that  the  definition  of  a  vertical  agreement  in  Article  1(a)  of  the 
VBER  and  paragraph  25  of  the  VGL  does  not  work  well  in  the  online  context,  since 
online platforms often do not distribute products in the traditional sense, but operate at a 
level  of  trade  which  is  neither  purely  vertical  nor  horizontal  with  respect  to  suppliers. 
NCAs therefore indicate that they lack criteria to determine whether agreements between 
suppliers  and  online  platforms  are  to  be  treated  as  vertical  or  rather  horizontal 
agreements.  

Second,  NCAs  suggest  that  restrictions  imposed  by  platforms  on  sellers  are  often 
different  in  nature  from  those  commonly  used  in  traditional  vertical  relationships  and 
may  not  -  at  least  not  directly  -  "relate  to  the  conditions  under  which  the  parties  may 
purchase, sell or resell certain goods or services", thus falling outside the definition of 
vertical agreements in the sense of the VBER.  

Third, NCAs observe that vertical restrictions are more likely to be used by downstream 
platforms,  which  tend  to  have  significant  market  power,  in  order  to  restrict  their  own 
upstream suppliers. This means that the balance of power between suppliers and retailers 
has shifted in favour of online platforms and that the specificities of online platforms are 
currently not properly taken into account by the VBER and the VGL. 

NCAs  also  point  to  uncertainty  regarding  the  treatment  of  intra-brand  restrictions 
imposed by powerful online platforms, taking into account that (i) network effects often 
ensure  that  successful  online  platforms  grow  to  a  significant  size  and  gain  bargaining 
power  over  their  customers,  (ii)  online  platforms  are  capable  of  influencing  the 
parameters of the transactions they facilitate for the benefit of their own business interest, 
and (iii) hybrid platforms function as gatekeepers to certain (online) distribution channels 
and  as  retailers  competing  on  the  downstream  market  with  the  companies  using  their 
platform's services.  

NCAs  highlight  that,  based  on  their  experience,  there  is  a  need  to  distinguish  between 
"supplier  platforms",  which  provide  only  the  infrastructure  for  sellers  and  buyers  to 
interact (see footnote 2 above), and "distributor platforms", which are directly involved 
in the conclusion of individual transactions via the platform and can therefore qualify as 
buyers of products vis-à-vis the manufacturers and as suppliers vis-à-vis end customers 
(see  footnote  3  above).  The  difference  between  both  concepts  lies  in  the  degree  of 
participation  of  the  platform  in  the  transaction  it  facilitates  and  its  responsibility  for  it. 
The VBER and the VGL currently do not clarify the consequences of classifying a third-
party  online  platform  as  either  a  "supplier  platform"  or  a  "distributor  platform"  with 
respect  to  the  application  of  the  rules  on  dual  distribution,  the  hardcore  restrictions, 
excluded restrictions, and the calculation of market shares. 

130 

 
Finally,  the  experience  of  NCAs  show  that  online  platforms  with  a  degree  of  market 
power  often  require  their  business  partners  to  supply  commercially  sensitive  and/or 
valuable  data  about  the  transactions  concluded  on  the  platform.  NCAs  flag  that 
unjustified  requests  for  supplier  data  can  have  potential  anti-competitive  effects 
downstream  (as  a  means  for  the  online  platform  to  strengthen  its  market  position  by 
gathering  and  using  data  that  allow  it  to  compete  more  effectively  at  the  downstream 
level). 

iv.  RETAIL MOST-FAVOURED NATION ("RETAIL MFNS") OR PRICE PARITY 

CLAUSES  

NCAs  indicate  that  the  VBER  and  the  VGL  do  not  provide  sufficient  guidance  on  the 
legal qualification and assessment of retail MFNs. This might result in divergence in the 
treatment  of  retail  MFNs  between  Member  States,  thereby  limiting  legal  certainty  for 
stakeholders, notably platforms and their business partners. However, NCAs agree that a 
distinction should be drawn between wide and narrow retail MFNs.  

NCAs specify in this regard that the VBER and the VGL do not capture the fact that wide 
retail  MFN  clauses  (which  require  suppliers  to  offer  the  platform  the  same  or  better 
prices and conditions as those offered on any other sales channel) are more problematic 
than narrow retail MFNs (which generally only bind the supplier's direct online channel). 
They  also  do  not  reflect  that  it  is  less  likely  that  efficiencies  resulting  from  the  use  of 
wide  retail  MFNs  (e.g.  avoiding  free-riding  and  recovering  investments  made  by 
platforms)  could  outweigh  the  restrictive  effects  on  competition  (e.g.  weakening 
competition  between  platforms  and  impeding  the  entry  of  platforms  willing  to  charge 
lower commissions, thus ultimately increasing the price for consumers). 

NCAs point out that the VBER and the VGL do not take into account that narrow retail 
MFNs are generally more likely to be justified than wide retail MFNs. When assessing 
narrow  retail  MFNs,  particular  attention  should  be  paid  to  the  market  power  of  the 
platforms  concerned,  and  the  cumulative  effects  that  may  occur  if  those  platforms  are 
used  by  a  large  proportion  of  the  suppliers  and/or  distributors  active  on  the  markets 
concerned.  In  a  recent  case,  it  was  considered  that  a  narrow  retail  MFN  clause  had 
similar  effect  as  wide  MFNs  as  the  supplier’s  direct  online  channel  constituted  an 
important distribution channel. 

v.  FREQUENTLY USED DISTRIBUTION SYSTEMS  

1.  Selective distribution (paragraphs 174-188 of the VGL) 

NCAs point out that over recent years there has been a tendency among manufacturers to 
apply  qualitative  selection  criteria  that  are  completely  unrelated  to  the  actual 
requirements  of  the  product  concerned.  In  this  context,  NCAs  highlight  that  selective 
distribution  systems  may  serve  as  a  means  to  reduce  intra-brand  competition  and 
discipline deviant market behaviour. In fact, the ultimate goal of certain selection criteria, 
in combination with appropriate retaliation mechanisms, seems to be the stabilisation of 
retail prices.  

131 

 
NCAs indicate that the VBER does not capture the fact that the potential negative effects 
of  selective  distribution  systems  may  increasingly  outweigh  any  potential  positive 
effects.  In light  of this, the unconditional  exemption  of selective distribution  below the 
market  share  threshold  of  30%  may  have  to  be  reassessed.  This  appears  all  the  more 
justified  since  the  only  available  instrument  to  address  selective  distribution  systems 
benefiting  from  the  VBER  while  having  effects  on  competition  that  are  incompatible 
with Article 101(3) of the Treaty is the individual withdrawal of the exemption pursuant 
to  Article 29 of Regulation 1/2003,  which has however in  practice not  proven to  be an 
effective tool.  

NCAs  also  point  to  a  need  for  more  clarification  regarding  the  assessment  of  vertical 
restrictions  in  the  framework  of  selective  distribution  systems.  Notably,  the  interplay 
between the Metro criteria and the exemption  requirements of the VBER is  considered 
unclear.  Account  should  be  taken  of  the  recent  jurisprudence  in  this  area  and  the 
questions  that  have  remained  unsolved  after  the  CJEU’s  Coty  judgment  should  be 
addressed.  

Finally,  NCAs  indicate  that  the  case  law  seems  to  give  suppliers  with  selective 
distribution  systems  greater  control  over  the  conditions  under  which  their  distributors 
resell  their  products  and  services.  This  may  encourage  businesses  to  establish  selective 
distribution  systems  to  impose  more  restrictions  on  their  distributors  than  otherwise 
allowed even though the objective of brand protection may not be justified with regard to 
the  products  or  services  concerned.  Guidance  is  needed  to  avoid  the  conflicting 
application of competition law in different jurisdictions on this matter. 

2.  Franchising (paragraphs 189-191 of the VGL) 

NCAs indicate that the treatment of franchise agreements in the VBER and VGL do not 
provide  sufficient  legal  certainty  with  regard  to  the  combination  of  franchising  with 
exclusive  distribution  (aimed  at  providing  an  exclusive  territory  to  a  particular 
franchisee),  which  is  very  common  in  practice.  The  VBER  does  not  provide  any 
guidance  on  the  assessment  and  thus  the  legality  of  distribution  systems  that  combine 
elements of exclusive distribution and franchising. In fact, pursuant to Article 4(b)(i) of 
the VBER, a restriction of active sales to another buyer's exclusive territory is permitted 
in  the context  of an exclusive distribution system, while pursuant  to  Article 4(c) of the 
VBER, the restriction of active sales to end users by retailers of a selective  distribution 
system  (with  franchising  being  a  subcategory  of  selective  distribution)  is  considered  a 
hardcore  restriction.  Also  paragraphs  56-57,  152,  176  and  185  of  the  VGL  are  unclear 
regarding  the  circumstances  under  which  selective  and  exclusive  distribution  can  be 
combined.  

132 

 
vi.  WITHDRAWAL AND DISAPPLICATION OF THE BLOCK EXEMPTION 

1.  Regarding the disapplication and withdrawal of the block exemption 

(Article 29 of Regulation 1/2003, Article 6 of the VBER and paragraphs 
74-85 of the VGL) 

NCAs  question  the  effectiveness  of  the  disapplication  procedure,  since  Article  6  of  the 
VBER,  which  allows  the  Commission  to  disapply  the  VBER  in  respect  of  specific 
restrictions where parallel networks of similar vertical restrictions cover more than 50% 
of the relevant market, has not been used so far.  

NCAs  also  question  the  effectiveness  of  the  withdrawal  procedure,  since  Article  29  of 
Regulation 1/2003, which allows the Commission and the NCAs to withdraw the benefit 
of the VBER in individual cases, seems difficult to apply in practice. This is notably due 
to  the  underlying  requirement  that  the  territory  of  the  Member  State  or  a  part  thereof 
concerned must constitute a distinct geographic market. NCAs also point out the lack of 
guidance  with  regard  to  the  withdrawal  procedure,  particularly  the  standard  of  proof 
regarding the withdrawal requirements. 

2.  Regarding the enforcement policy in individual cases (Section VI of the 

VGL) 

NCAs  point  out  that  the  VGL  treat  the  assessment  of  individual  cases  of  hardcore 
restrictions falling outside Article 101(1) of the Treaty and those fulfilling the conditions 
of  Article  101(3)  of  the  Treaty  in  the  same  section.  New  guidance  should  distinguish 
between these two scenarios.  

2.4. SUMMARY OF THE STAKEHOLDER WORKSHOP  

A summary report of the stakeholder workshop was published in February 2020.154 

In the context of the evaluation of the VBER, together with the Vertical Guidelines, the 
European Commission ("Commission") organised a stakeholder workshop ("workshop") 
to gather additional information about the functioning of the current rules. The workshop 
took  place  on  14  (afternoon)  and  15  November  (full  day)  2019,  at  Autoworld, 
Cinquantenaire, in Brussels. 

Building on the outcome of the public consultation in which stakeholders had generally 
reported that the VBER and the Vertical Guidelines were useful and cost-reducing tools 

154  The 

is 

report 

summary 

at 
https://ec.europa.eu/competition/consultations/2018_vber/workshop_summary.pdf.  The  Commission 
notes that the published report differs from the summary included in this annex. This is due to the fact 
that,  during  the  stakeholder  workshop,  stakeholders  expressed  views  not  only  the  functioning  of  the 
rules  since  their  adoption,  but  also  on  changes  they  believe  should  be  made  to  the  rules,  to  improve 
their functioning, as well as how such changes would benefit consumers. All these views were included 
in the published summary, for transparency reasons. However, to the extent that these views focus on 
possible policy options and their impacts, and are therefore not relevant for the evaluation of the VBER, 
together with the Vertical Guidelines, they have not been included in this annex. 

available 

133 

 
                                                           
for self-assessing compliance of vertical agreements with Article 101 of the Treaty, the 
workshop focused mainly on the evaluation criteria of effectiveness and relevance. The 
objective  of  the  workshop  was  therefore  to  deepen  the  discussion  on  the  issues  that 
stakeholders  consider  to  be  not  functioning  well  in  the  current  framework  and  that,  in 
their  view,  would  deserve  re-thinking  to  ensure  that  the  rules  remain  relevant  for  the 
coming years. Considering that the enforcement of EU competition law is driven by the 
consumer welfare objective, which includes all relevant parameters of competition (e.g. 
price,  output,  choice  and  innovation),  the  workshop  was  intended  to  focus  on  how 
consumers are impacted by the identified shortcomings. 

In  view  of  the  aforementioned  objective,  participation  in  the  workshop  was  limited  to 
stakeholders  who  had  contributed  to  the  public  consultation,  as  well  as  consumer 
associations. Approximately 150 participants from companies and business associations 
representing  a  variety  of  sectors  attended  the  workshop.  Among  the  participants,  there 
was a high number representing the supply side (e.g. brands and manufacturers). There 
were also several participants representing the distribution side (e.g. retailers) as well as 
several legal professionals and one consumer organisation. 

The discussions among stakeholders took place in small groups of changing composition. 
The discussion topics were selected by the participants themselves within the boundaries 
of  the  workshop  objective.  The  participants  were  free  to  choose  in  which  discussions 
they wanted to take part. The role of the Commission was to facilitate the discussion.  

The  workshop  included  two  main  activities  in  which  participants  could  discuss  and 
exchange their views. Sections I and II each summarize one activity and its outcome.  

I.  GENERAL IDEAS FOR POSSIBLE CHANGES 

The  first  activity  aimed  at  gathering  general  ideas  about  areas  of  the  VBER  and  the 
Vertical Guidelines that are not functioning well, from a consumer welfare perspective. 

Stakeholders  pointed  to  103  perceived  shortcomings  in  the  current  framework  that,  in 
their view, would need re-thinking. Annex II provides the full list of ideas submitted by 
stakeholders,  which  can  be  broadly  grouped  into  the  following  areas  (listed  in 
alphabetical order): 

  Agency concept 
  Application of the VBER to services 
  Dual-distribution and information exchange 
  Franchising 
 
 

Intellectual Property and the use of territorial restrictions 
Interplay between the VBER and other sector-specific regulations in the area of 
competition 

  Efficiencies and long-run consumer benefit (other than lower prices) 
  Most Favoured Nation clauses 
  Non-compete clauses 
  Online sales restrictions and dual pricing 

134 

 
  Resale Price Maintenance 
  Selective distribution (including the treatment of online platform bans) 

II. 

SPECIFIC TOPICS DISCUSSED 

The  second  activity  aimed  at  an  in-depth  discussion  of  a  number  of  specific  topics 
selected by participants within the boundaries of the workshop objective.   

In  total,  25  roundtable  discussions  took  place  during  two  consecutive  rounds  of 
discussion, which covered the following main topics155 (listed, to the extent possible, in 
accordance with the structure of the VBER): 

i.  GENERAL APPROACH OF THE VBER AND THE VERTICAL GUIDELINES  

One  roundtable  discussion  focused  on  the  issue  of  whether  the  current  rules  strike  the 
right  balance  between  inter-brand  and  intra-brand  competition  when  assessing  the 
existence  of  a  restriction  of  competition  pursuant  to  Article  101(1)  of  the  Treaty.  The 
roundtable  participants  were  of  the  opinion  that  the  Vertical  Guidelines  do  not  provide 
sufficient  clarity  on  this  issue.  In  particular,  the  roundtable  participants  explained  that 
inter-brand competition should be the starting point of the analysis under Article 101(1) 
of the Treaty, in which market shares should only serve as an indication of the intensity 
of competition. According to them, product and market specificities should be assessed 
in more detail in cases where restrictions on intra-brand competition are considered to be 
harmful to consumers. In their view, this approach would benefit consumers, as it would 
strengthen legal certainty, leading to more efficiency and innovation in the supply chain 
to the ultimate benefit of consumers.  

In  another  roundtable  discussion,  the  participants  argued  that  the  current  framework  is 
not business-model neutral because it seems to favour intra-brand competition over inter-
brand  competition.  According  to  the  roundtable  participants,  the  current  framework 
favours  platforms  and  retailers  pursuing  a  high-volume/low-price  strategy  over  other 
business  models  that  offer  innovative,  qualitative  choices  to  consumers  (i.e.  there  is 
currently  a  stronger  focus  on  price  than  on  other  aspects  of  consumer  welfare,  such  as 
innovation  or  quality).  The  goal  should,  however,  not  be  to  make  a  particular  brand 
cheaper,  but  to  foster  the  creation  and  growth  of  a  variety  of  brands.  The  roundtable 
participants were of the view that facilitating new business models, rewarding innovation 
and  promoting  inter-brand  competition  and  business-model  neutrality  would  benefit 
consumers  without  having  to  predetermine  winning  business  models  and  consumer 
preferences. It was therefore argued that, unlike what is currently the case, the existence 
of hardcore restrictions should not prevent vertical agreements from benefiting from the 
VBER if there is sufficient inter-brand competition.  

155  Several roundtables touched upon more than one of the main topics mentioned in this summary. 

135 

 
 
                                                           
ii. 

AGENCY CONCEPT 

Participants  in  one  roundtable  discussed  the  agency  concept  as  set  out  in  the  Vertical 
Guidelines.  The  roundtable  participants  indicated  that  the  agency  exception  is  positive 
and should be kept, but that there is currently a lack of clarity as regards the underlying 
requirements  and  their  application  to  fulfilment  agents  and  online  platforms.  The 
roundtable  participants  pointed  in  particular  to  a  lack  of  clarity  regarding  the  notion  of 
"market  specific"  investments, the number of principals  that an agent  can have and the 
impact of the transfer of the title or possession of the goods concerned from the principal 
to  the  agent.  They  also  pointed  to  a  need  to  address  specific  situations  in  the  Vertical 
Guidelines on the basis of worked examples. The roundtable participants argued that the 
resulting increased clarity and legal certainty would help businesses to provide the most 
efficient distribution service for consumers.   

iii. 

DUAL DISTRIBUTION 

Three roundtable discussions related to dual distribution (i.e. Article 2(4) of the VBER).   

The participants in one roundtable argued that the scope of Article 2(4) of the VBER is 
too  narrow,  as  it  does  not  encompass  wholesaler-retailer  relationships.  They  argued  as 
well that there is a lack of clarity in the Vertical Guidelines regarding the extent to which 
dual distribution is covered by the VBER. 

They also called for a more lenient approach to information exchanges in the context of 
dual distribution as compared to purely horizontal information exchanges. According to 
the roundtable participants, there is a distinction between three different situations which 
is not currently captured in the Vertical Guidelines: (i) information exchanges that cannot 
be considered a restriction of competition pursuant to Article 101(1) of the Treaty (e.g. 
exchanges of information on past and forecasted volumes of contracted good purchased 
by the buyer); (ii) information exchanges that should be covered by the VBER (e.g. the 
exchange  of  sales  information  like  actual  prices  and  margins,  as  well  as  the  timing  of 
promotions);  and  (iii)  information  exchanges  that  cannot  be  exempted  and  are  thus 
subject  to  an  effects  analysis  (e.g.  information  about  the  buyer’s  sales  of  competing 
products).  

The  participants  in  another  roundtable  argued  that  the  exchange  of  information  in  the 
supply chain should not be considered a vertical restriction and is covered by the VBER 
in  the  case  of  dual  distribution.  They  pointed  out  that  the  information  exchanged  in  a 
vertical  scenario  allows  for  the  provision  of  personalised  and  innovative  products  and 
services. 

In  another  roundtable,  participants  identified  as  an  issue  the  fact  that  under  the  current 
framework  agreements  between  independent  importers  and  their  distributors  are  not 
block exempted in the context of dual distribution (in particular as regards the automotive 
sector). They argued that exempting these agreements would increase legal certainty and 
thus lead to more investments. 

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iv.  MARKET SHARE THRESHOLD 

One roundtable discussion focused on whether the current market share threshold for the 
application of the  VBER is  adequate. The roundtable participants  perceived the current 
30%-threshold as too low. They were of the view that agreements between parties with 
market  shares  of  35%  or  40%  can  also  be  efficiency-enhancing  and  could  therefore  be 
exempted.  

The roundtable participants further discussed how making the European rules on market 
definition  binding  on  NCAs  could  address  the  issue  of  markets  being  defined  too 
narrowly and of divergent market definitions by different authorities. They also discussed 
the  benefits  of  including  a  provision  in  the  Vertical  Guidelines  stipulating  that  the 
threshold can be modified in light of the competitive landscape of the market in question. 

v. 

PRICE RELATED RESTRICTIONS 

Six roundtables covered price related restrictions with a particular focus on the treatment 
of resale price maintenance ("RPM") in the existing legal framework.  

In  several  roundtable  discussions,  the  participants  stated  that  the  RPM  prohibition  is 
adequate  and  should  be  maintained,  since  it  allows  effective  price  competition  among 
retailers who have a better understanding than suppliers of the competitive dynamics and 
the price levels at retail level. They also pointed out that, in most cases, RPM prevents 
dealers  from  sharing  efficiencies  with  consumers  and  that  there  are  less  restrictive 
alternatives  to  ensure  the  provision  of  specific  services  by  distributors  such  as  targeted 
financial  incentives.  At  the  same  time,  the  roundtable  participants  acknowledged  that 
RPM can be beneficial for consumers in exceptional cases, e.g. by facilitating the launch 
of  new  products  or  making  it  easier  to  agree  on  promotions.  These  limited  exceptions, 
which  are  already  reflected  in  the  Vertical  Guidelines,  were  however  considered 
insufficiently  clear,  which  makes  them  not  workable  in  practice  and  could  lead  to 
potential  misuse  (e.g.  with  regard  to  what  can  be  considered  a  "new"  product).  The 
participants  in  one  roundtable  discussion  also  indicated  that  there  is  a  perception  that 
authorities are not sufficiently open to discuss such exceptional situations with individual 
stakeholders  and  possibly  issue  guidance  letters.  The  participants  in  another  roundtable 
further  indicated  that  the  current  framework  does  not  sufficiently  support  joint  (online) 
pricing actions by groups of small and medium distributors, which could allow them to 
compete effectively against big online platforms. 

In  other  roundtable  discussions,  the  participants  discussed  the  perceived  rigidity  of  the 
current  approach  to  RPM.  The  participants  in  one  roundtable  argued  that  vertical 
agreements with RPM clauses entered into by parties with a negligible market share do 
not  have  any  negative  effect  on  competition  and  could  therefore  benefit  from  a  de 
minimis  exemption.  The  participants  in  another  roundtable  expressed  concerns  about 
aggressive price  competition  by low-cost  online distributors who are perceived as free-
riding on the investments made by quality and service-oriented brand manufacturers. The 
roundtable participants argued that this is leading to a long-term decrease of products and 
in-store service quality. They therefore saw a need for extending the circumstances under 
which RPM is permitted (i) to products requiring a high level of investments in services, 

137 

 
quality  and  safety,  and  (ii)  to  markets  with  strong  inter-brand  competition.  The 
roundtable participants were of the view that a fixed fee, as foreseen by the current rules, 
does  not  allow  to  take  into  account  the  efficiency  of  each  store  and  is  impossible  to 
operate in practice for suppliers relying on a large number of stores for the distribution of 
their products. They explained that marketing promotions can only target sales of specific 
products  and  therefore  do  not  allow  addressing  long-term  fixed  investments.  They  also 
pointed out that rebates in exchange for investments in good consumer experience do not 
help  to  protect  against  opportunistic  price  drops  caused  by  free-riders.  They  further 
highlighted that the possibility to  resort to  RPM  to  support the launch of new products 
does not allow to address long-term investments and free-riding issues in the long run. 

Concerns  regarding  aggressive  price  competition  were  also  the  subject  of  discussion  in 
another  roundtable  in  which  participants  pointed  out  that  low  prices  do  not  ensure  that 
consumers  receive  a  fitting  product  or  appropriate  service,  and  that  customer  care 
experience, product availability and staff (at fair working conditions) are cost and labour 
intensive. The roundtable participants argued that the Commission’s current approach to 
vertical agreements does therefore not ensure a sustainable and adaptable supply chain in 
the long term.  

One roundtable discussion focused on the lack of clarity of retail price recommendations. 
The  roundtable  participants  argued  that  the  VBER  and  the  Vertical  Guidelines  do  not 
provide  sufficient  clarity  on  when  such  price  recommendations  can  be  considered 
compliant  with  Article  101  of  the  Treaty.  They  pointed  in  particular  to  (i)  insufficient 
guidance  on  when  price 
to  unilateral  non-binding 
recommendations  amount 
recommended  retail  prices,  (ii)  a  lack  of  clarity  on  the  assessment  of  the  interaction 
between  the  supplier  and  the  buyer  in  this  regard  (see,  e.g.  the  guidance  issued  by  the 
German and Austrian competition authorities), and (iii) a lack of focus on the level from 
which the enforcement of recommended retail prices emanates (e.g. whether it is based 
on  pressure  from  downstream  distributors).  The  roundtable  participants  argued  that 
recommended resale prices may result in efficiencies that can be passed on to consumers 
(e.g. product launches and promotions).  

Another  roundtable  discussion  centred  around  maximum  prices.  The  roundtable 
participants  argued  that  genuine  maximum  prices  benefit  consumers  since  they  reduce 
the overall price level and allow for lower prices in the distribution chain. They indicated 
that  the  current  rules  lack  guidance  on  (i)  circumstances  in  which  maximum  prices  are 
considered  to  constitute  fixed  prices  and  (ii)  situations  in  which  the  distributor  merely 
executes an agreement between the supplier and the customer. 

vi.  ONLINE RELATED ISSUES 

Four roundtable discussions covered different issues in relation to the treatment of online 
sales  in  the  current  rules  such  as  (i)  restrictions  on  the  use  of  third-party  online 

138 

 
platforms,156 price  comparison  tools and search engines;  (ii) dual  pricing and (iii) more 
generally, how to protect investments against free-riding by online distributors.  

The participants in two roundtable discussions expressed concerns about the fact that the 
current  rules  do  not  provide  sufficient  guidance  on  the  assessment  of  online  sales 
restrictions. The participants of one roundtable indicated that there is a lack of clarity on 
whether  restrictions  on  the  use  of  search  engines  and  price  comparison  tools  are 
considered  hardcore  restrictions  pursuant  to  the  VBER  and  a  lack  of  clear  criteria  for 
determining  when  such  restrictions  can  be  justified.  The  participants  in  another 
roundtable argued that the VBER lacks a dedicated chapter on online sales issues, which 
would  have  to  take  into  account  the  present  "omni-channel  world".  The  roundtable 
participants also pointed to the current lack of guidance on the Coty ruling, notably with 
regard to its scope and the product categories covered.  

The  participants  in  two  roundtables  discussed  the  current  approach  to  dual  pricing, 
arguing  that  the  existing  prohibition  of  dual  pricing  with  regard  to  hybrid  distributors 
does not reflect current business needs. The participants in one roundtable argued that the 
current  approach  in  paragraph  52  d)  of  the  Vertical  Guidelines  does  not  adequately 
support value-added services in a fair manner, which reflects investments. In their view, 
an amendment to this approach is needed to ensure fairness, flexibility and differentiation 
across all sales channels.  

The participants in one roundtable argued that there is currently insufficient clarity about 
how  to  protect  investments  against  free-riding  by  online  distributors.  They  pointed  in 
particular  to  a  lack  of  clarity  with  regard  to  the  notion  of  investments  (i.e.  long-term 
investments/sunk  investments  vs  operational  costs)  and  argued  that  clarifying  this 
concept could help to ensure the protection of non-price competition (e.g. quality, service 
and innovation), which would benefit consumers by providing them with more choice. 

vii. 

SELECTIVE DISTRIBUTION / EXCLUSIVE DISTRIBUTION 

Eight roundtable discussions covered a variety of topics regarding selective and exclusive 
distribution.  

The participants in one roundtable focused on the issue that the current rules do not limit 
selective  distribution  to  luxury  and  high-tech  products.  The  roundtable  participants 
discussed  (i)  the  absence  of  the  Metro  criteria  in  the  VBER,  (ii)  the  lack  of  access  by 
distributors to qualitative selection criteria and (iii) whether selective distribution should 
allow for the protection of a supplier’s brand image or particular products depending on 
their nature and characteristics. The roundtable participants noted strong divergence with 
regard to the appropriate approach to these issues. 

The  participants  in  another  roundtable  discussed  whether  the  current  approach  to  the 
principle  of  equivalence  within  selective  distribution  systems  leads  to  a  level  playing 
field.  They  expressed  the  view  that  qualitative  and  quantitative  selection  criteria  in  the 

156  Third-party platform bans were also discussed in the context of selective distribution (see section VII).  

139 

 
                                                           
context of selective distribution systems should be applicable to all distribution channels, 
including  marketplaces,  in  line  with  the  principle  of  equivalence.  General  marketplace 
bans within selective distribution systems would therefore be prohibited.  

The participants  in  a third roundtable discussion argued that there was a lack of clarity 
about  the  degree  of  flexibility  within  selective  distribution  systems,  in  particular  as 
regards the possibility for differentiated partnerships and the exchange of data to provide 
better  services  to  consumers.  The  roundtable  participants  argued  that  differentiation 
within selective distribution systems should not be considered as contradicting the non-
discrimination principle and that information exchange in scenarios of dual distribution is 
already  covered  by  the  VBER.157 They  explained  that  this  clarification  would  provide 
market players with the opportunity to experiment towards a better consumer experience 
and  contribute  to  product  development  by  allowing  for  an  enhanced  customisation  of 
products and services. 

Two roundtable discussions focused on the need to ensure the enforceability of selective 
distribution against sales by unauthorised resellers within the EU. The participants in one 
roundtable  argued  that  there  is  a  lack  of  clarity  in  the  Vertical  Guidelines  on  whether 
free-riding on the efforts and investments of authorised retailers in selective distribution 
networks constitutes unfair competition. They considered that such a clarification would 
benefit  consumers  because,  in  their  view,  this  would  contribute  to  ensuring  product 
quality  and  safety,  as  well  as  a  high  level  of  pre-  and  aftersales  services,  and  by 
supporting  long-term  investments  in  innovation.  They  argued  that  direct  action  against 
non-authorised resellers in all EU Member States could equally benefit consumers.  

The participants  in  another roundtable discussion argued that there is  a lack of specific 
tools  to  enforce  selective  distribution  rules  against  unauthorised  resellers  or  any  other 
players  offering  directly  or  indirectly  for  sale  products  that  are  subject  to  selective 
distribution. They argued that creating consistency with the level of protection granted in 
this regard at  national  level  (e.g. Article 442.2 of the French Commercial  Code) would 
benefit  consumers  in  terms  of  product  safety,  integrity,  authenticity,  liability  and 
aftersales services. They also argued that the resale outside a selective distribution system 
could be a legitimate reason to consider the absence of exhaustion of intellectual property 
rights. 

Two  roundtable  discussions  covered  the  interplay  between  exclusive  and  selective 
distribution  in  the  current  framework.  One  roundtable  discussion  identified  as  an  issue 
the  prohibition  of  combining  exclusive  distribution  at  wholesale  level  with  selective 
distribution  at  retail  level  within  the  same  territory.  The  roundtable  participants  argued 
that  allowing  this  combination  would  prevent  free-riding  (as  already  specified  in 
paragraph  63  of  the  Vertical  Guidelines)  and  encourage  investments  resulting  in  better 
service quality at retail level. They indicated that there is a need to clarify paragraphs 57 
and  63  of  the  Vertical  Guidelines.  The  participants  in  another  roundtable  discussion 
pointed  to  the  need  for  a  clarification  in  the  Vertical  Guidelines  with  regard  to  Article 

157  The roundtable participants’ arguments with regard to dual distribution are reflected in section III. 

140 

 
                                                           
4(b)(iii) of the VBER and notably the concept of "territory" to allow big distributors to 
set  up  selective  distribution  systems  in  some  countries,  while  resorting  to  exclusive 
distribution  in  others,  or  to  allow  small  distributors  to  focus  on  some  countries  only. 
They  argued  that  this  would  allow  for  the  provision  of  personalised  services  in 
accordance  with  national  habits  or  expectations,  ensure  quality,  safety  and  innovation, 
and maintain brand culture, while preventing counterfeiting. 

The  participants  in  another  roundtable  discussion 158  pointed  to  the  current  lack  of 
flexibility of the rules that do not allow extending the benefit of the VBER to situations 
of  shared  exclusivity  with  two  exclusive  distributors.  They  argued  that  this  would  be 
useful  for  the  agricultural  sector  (e.g.  with  regard  to  agro  equipment)  and  benefit 
consumers through more investments spurred by increased legal certainty.  

viii. 

FRANCHISING 

The  participants  of  one  roundtable  focused  on  franchising  related  issues,  including  the 
transfer  of  know-how.  They  argued  that  in  view  of  the  absence  of  a  definition  of 
franchising  and  know-how  in  the  VBER,  it  is  not  clear  that  both  concepts  are  directly 
associated, with know-how being a crucial characteristic of this distribution model, and 
that franchising can be confused with other business models. They also called for clearer 
examples  in  the  Vertical  Guidelines  of  how  vertical  restrictions  may  affect  both 
franchisors and franchisees. The roundtable participants argued this would be beneficial 
for  consumers  since  franchising  supports  the  creation  of  small  and  medium  enterprises 
(e.g.  by  creating  value,  employment,  entrepreneurship  and  a  close  seller-consumer 
relationship)  and  contributes  to  town  centre  dynamics  and  modernising  commerce  & 
services by professionalising the whole commercial chain, including the digital economy 
without losing the local link with consumers. 

ix. 

NON-COMPETE OBLIGATIONS 

The  participants  of  one  roundtable  discussed  why  the  5-year  limit  for  non-compete 
obligations pursuant to Article 5 of the VBER is the "magic number". They agreed that 
the current temporal scope of the safe harbour is working well. However, they considered 
that paragraph 133 of the Vertical Guidelines lacks clarity as regards the fact that there is 
no  presumption  of  illegality  of  non-compete  obligations  exceeding  5  years  and  that 
paragraph  146  of  the  Vertical  Guidelines  is  too  narrow.  The  roundtable  participants 
nevertheless  argued  that  a  10-year  time  limit  in  Article  5  could  also  be  considered 
efficiency-enhancing.  The  roundtable  participants  argued  that  non-compete  obligations 
with a longer duration would benefit consumers by incentivising  long-term investments 
and  allowing  for  lower  sales  prices  thanks  to  the  ability  of  suppliers  to  spread  their 
investments over a longer time period.  

158  The roundtable participants’ arguments with regard to dual distribution are reflected in section III. 

141 

 
                                                           
x. 

ACCESS TO DATA 

The  participants  of  one  roundtable  discussed  whether  the  current  rules  enable  fair  and 
non-discriminatory  third-party  access  to  machine  generated/IoT  data,  which  they 
perceive as necessary to ensure innovative and independent aftermarkets (e.g. repair and 
maintenance services). The roundtable participants indicated that the current rules lack a 
generic access provision for such data to enable end-users to maintain their own products 
or choose their preferred service provider. They argued that this would allow consumers 
to retain genuine alternative choice (thus preventing lock-in) and control over their data, 
enhance innovation-based competition (including by small and medium enterprises) and 
enable market entry. The roundtable participants further discussed possible overlaps with 
Article  102  of  the  Treaty,  pointing  to  practical  limitations  to  enforcing  the  provision 
effectively under the current legal framework, and possible data access legislation. 

2.5. OTHER CONSULTATION ACTIVITIES 

In  addition  to  the  above-mentioned  consultations  and  the  stakeholder  workshop,  the 
Commission  received  a  number  of  spontaneous  submissions  from  stakeholders 
throughout  the  evaluation.  Some  of  these  contributions  were  submitted  by  stakeholders 
that had participated in the public consultation and were therefore intended to supplement 
their  views  with  additional  evidence.  Other  submissions  were  received  from  EU 
government  bodies  and  business  associations  that  had  not  participated  in  the  public 
consultation. These submissions largely echoed the issues already raised in the different 
consultation  activities.  All  such  submissions  were  published  on  the  dedicated  VBER 
review  webpage  on  DG  Competition's  website,159 except  for  a  few  submissions  which 
stakeholders  had  asked  the  Commission  not  to  publish  for  confidentiality  reasons.  The 
Commission  used  the  latter  to  enhance  its  understanding  of  a  particular  stakeholder 
position but did not rely on the information contained therein for any of the conclusions 
in the Staff Working Document.  

Throughout  the  evaluation,  the  Commission  also  met  bilaterally  with  stakeholders  that 
requested this, primarily in the context of the public consultation. These meetings aimed 
primarily at discussing the submissions made by stakeholders, either in the context of the 
public consultation or outside of it, or the process of the evaluation. 

159  See section 2 titled "Contributions outside the public consultation" at 

https://ec.europa.eu/competition/consultations/2018_vber/index_en.html.  

142 

 
 
                                                           
Annex 3: Methods and analytical models 

143 

IndicatorSources1. Indicated changes of distribution models in stakeholder responses.2. Consumers’ omni-channel purchase behaviour.3. Extent of free-riding between off-line and on-line distribution.4. Need for off-line distribution.1. Questionnaire, section on relevance.2. Stakeholders' workshop.3. Spontaneous stakeholder submissions.4. External study: survey and case studies for Task 2, 3, 4, 5 and 9, and task 8 and consumer survey.5. Targeted consultation of NCAs.6. E-commerce sector inquiry.7. Enforcement practice of the Commission and NCAs.1. Identification of relevant legislation and assessment of level of coherence of VBER and Guidelines with it.1. Questionnaire, section on coherence.2. Targeted consultation of NCAs.3. Spontaneous stakeholder submissions.1. Benefits for stakeholders of the presence of VBER and Guidelines compared to absence of them.1. Questionnaire, section on EU added value.2. Targeted consultation of NCAs.3. Spontaneous stakeholder submissions.Evaluation criteria and questions6. Would the costs of ensuring compliance of vertical agreements with Article 101 of the Treaty increase if the VBER were not renewed?1. Difference in legal assessment of decisions by NCAs and judgments by competent national courts pertaining to the same categories of vertical restraints.2. Stakeholder responses assessing familiarity and confidence in the application of VBER and Guidelines.3. Impact on consumer welfare, efficiency gains, impact on intensity of competition.4. Impact on competition and consumer welfare (estimated using econometric methods and variables for sales price and sales volume).5. Effects of cumulative application of vertical restriction in oligopolistic markets.6. Potential drawbacks of application of the threshold in oligopolistic markets.1. Questionnaire, section on effectiveness.2. Spontaneous stakeholder submissions.3. Stakeholders' workshop.4. External study: survey and econometric tecniques for Task 1, 2, 3, 4, 5, 6 and 7, and task 8 and consumer survey.5. Targeted consultation of NCAs.6. E-commerce sector inquiry.7. Enforcement practice of the Commission and NCAs.1. Questionnaire, section on efficiency.2. External study: survey and case studies for Task 2, 3, 4, 5 and 9.3. Targeted consultation of NCAs.1. What is the level of legal certainty that the VBER, together with the Vertical Guidelines, provides for assessing whether vertical agreements and/or specific clauses/restrictions are exempted from the application of Article 101 of the Treaty and thus compliant with this provision?2. To what extent do the conditions currently defined in the VBER, as interpreted in the Vertical Guidelines, meet the objective of exempting only those agreements for which it can be assumed with sufficient certainty that they generate efficiencies in line with Article 101(3) of the Treaty?4. Are the costs for assessing whether the VBER, together with the Vertical Guidelines, is applicable to certain vertical agreements proportionate to the benefits that the VBER, together with the Vertical Guidelines, brings for stakeholders?EfficiencyEffectiveness1. Costs of self-assessment of vertical agreement; benefits of the VBER and Vertical Guidelines.2. Difference of costs of compliance under VBER versus projected costs of compliance under Art 101 only.3. Difference of costs of compliance under VBER versus costs of compliance under Commission Regulation (EC) No 2790/1999.3. To what extent does the VBER, together with the Vertical Guidelines, provide a common framework for the assessment of the compliance of vertical agreements with Article 101 of the Treaty in order to ensure a consistent application of Article 101 of the Treaty by national competition authorities and national courts to vertical agreements?5. Is there scope for further simplification and cost reduction?9. Is the VBER, together with the Vertical Guidelines, coherent with other Commission instruments that provide guidance on the interpretation of Article 101 of the Treaty and with other EU legislation with relevance for vertical supply and distribution agreements? 10. Does the VBER, together with the Vertical Guidelines, as an intervention at EU level, add value in the assessment of the compatibility of vertical agreements with Article 101 of the Treaty?8. How well do the objectives of the VBER, together with the Vertical Guidelines (i.e. to provide legal certainty for assessing whether vertical agreements comply with Article 101 of the Treaty, to properly capture under the block exemption those vertical agreements that can be considered with sufficient certainty as efficiency-enhancing and to provide a common framework to ensure a consistent application by national competition authorities and national courts of the vertical rules across the EU) still correspond to the needs? 7. Have the costs generated by the application of the VBER, together with the Vertical Guidelines, increased as compared to the 1999 VBER and the 2000 Vertical Guidelines?EU added valueCoherenceRelevance 
Annex 4: 
Overview of issues identified during the evaluation process 

4.1. VERTICAL AGREEMENTS GENERALLY FALLING OUTSIDE THE SCOPE OF 

ARTICLE 101(1) OF THE TREATY  

The exemption of vertical agreements from the prohibition contained in Article 101(1) of 
the Treaty, as enshrined in the VBER, only applies to vertical agreements that fall within 
the  scope  of  application  of  Article  101(1)  of  the  Treaty.  Section  II  of  the  Vertical 
Guidelines  (paragraphs  8-22)  provides  further  explanations  on  three  categories  of 
agreements  that  generally  fall  outside  the  scope  of  application  of  Article  101(1)  of  the 
Treaty and to which, therefore, the VBER does not apply. This includes (i) agreements of 
minor 
importance  and  agreements  between  SMEs  (see  section  4.1.1  below), 
(ii) subcontracting agreements (see section 4.1.2 below), and (iii) agency agreements (see 
section 4.1.3 below). 

The  evidence  gathered  during  the  evaluation  indicates  that  stakeholders  consider  these 
provisions to have generally worked well. However, some stakeholders pointed to parts 
of the Vertical  Guidelines that they perceive as  not  sufficiently  clear  or  not  up to  date. 
Some  stakeholders  also  indicated  that  some  provisions,  especially  those  on  agency 
agreements, are not well adapted to the specificities of certain areas or sectors. 

4.1.1.  Agreements of minor importance and agreements between SMEs 

Paragraphs 8-11 of the Vertical Guidelines clarify that Article 101(1) of the Treaty does 
not  cover  agreements  that  are  not  capable  of  appreciably  restricting  competition.  This 
includes  vertical  agreements  that  do  not  contain  any  hardcore  restrictions  and  meet  the 
conditions of the De Minimis Notice (so-called "agreements of minor importance"). Also 
vertical agreements between small and medium-sized companies as defined in the Annex 
to Commission Recommendation 2003/361/EC160 are considered as being rarely capable 
of  appreciably  affecting  trade  between  Member  States  or  appreciably  restricting 
competition and therefore generally fall outside the scope of Article 101(1) of the Treaty. 

The  evidence  gathered  during  the  evaluation  indicates  that  stakeholders  consider  these 
provisions  to  have  generally  worked  well.  A  large  majority  of  the  respondents  to  the 

160  OJ L 124, 20.5.2003, page 36. 

144 

 
 
 
 
 
 
                                                           
public  consultation161 (across  all  sectors  and  types  of  stakeholders162)  indicated  that  the 
relevant paragraphs in the Vertical Guidelines provide an appropriate level of legal 
certainty. In addition, very few respondents indicated that these paragraphs would need 
revision in  light  of new  market  developments.  Similarly, most NCAs found the current 
rules to work well and had no specific comments in this regard. 

More  specifically,  respondents  to  the  public  consultation,  notably  from  the  drinks 
distribution sector, indicated that the exceptions for agreements of minor importance and 
agreements between SMEs are useful since they give better protection to small breweries 
and distributors.  

Nevertheless,  the  evaluation  identified  the  following  main  issues  with  regard  to  the 
functioning of the current rules in this area: 

First,  some  respondents  to  the  public  consultation  (in  particular  legal  professionals  and 
the  franchising  sector)  indicated  that  the  definitions  in  the  Vertical  Guidelines  are  not 
aligned with those in the De Minimis Notice adopted in 2014. They further indicated that 
the  findings  of  the  Commission  Staff  Working  Document  "Guidance  on  restrictions  of 
competition  'by  object'  for  the  purpose  of  defining  which  agreements  may  benefit  from 
the De Minimis Notice" should be included in the Vertical Guidelines. The same applies 
to  the  "appreciability  exception"  of  the  Effect  on  Trade  Guidelines 163  to  which  a 
reference should be included in the Vertical Guidelines.164 

161  Throughout this annex, references to the views of the respondents to the public consultation should be 
understood  as  including  only  those  respondents  who  expressed  a  view  on  the  issue  concerned,  thus 
excluding those who did not reply or who indicated that the issue was not applicable to them. 

162  Throughout  this  annex,  where  no  qualification  is  made  regarding  the  views  of  the  respondents  to  the 
public consultation, this should be understood as meaning that the reported view is broadly shared by 
all  stakeholder  groups  that  participated  in  the  public  consultation  and  generally  across  all  sectors. 
Where a particular view was shared primarily by one or more different stakeholder groups among those 
that  participated  in  the  public  consultation  (e.g.  distributors,  suppliers  or  stakeholders  belonging  to  a 
particular sector) this is reported. While indicative of a trend, the fact that a view was broadly shared by 
all  or  only  some  of  the  stakeholder  groups  does  not  however  mean  that  the  Commission  disregards 
diverging  views,  both  within  the  same  stakeholder  group/sector  or  across  different  stakeholder 
groups/sectors. This annex reports extensively on the main issues raised in the evaluation, regardless of 
whether these views were shared by a majority or minority of stakeholders. 

163  Commission Notice - Guidelines on the effect on trade concept contained in Articles 81 and 82 of the 

Treaty, OJ C 101, 27.4.2004, p. 81 ("Effect on Trade Guidelines").  

164  The Effect on Trade Guidelines set out the principles developed by the Union Courts in relation to the 
interpretation of the effect on trade concept and indicate when agreements are unlikely to be capable of 
appreciably  affecting  trade  between  Member  States.  Paragraph  50  of  the  Effect  on  Trade  Guidelines 
contains a negative rebuttable presumption that applies to all agreements within the meaning of Article 
101(1)  of  the  Treaty  irrespective  of  the  nature  of  the  restrictions  contained  in  the  agreement,  thus 

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Second, respondents to the public consultation indicated that paragraph 10 of the Vertical 
Guidelines should be updated to reflect the judgment of the CJEU in the Expedia case.165 
In this context, respondents noted that it is not clear from the Vertical Guidelines whether 
all hardcore restrictions have to be considered as restrictions by object and are therefore 
excluded from the benefit of the De Minimis Notice.166 This issue is developed further in 
section  4.4  below.  Respondents  also  indicated  that  it  is  not  clear  if  the  exception  for 
agreements between SMEs covers restrictions by object. 

4.1.2.  Subcontracting agreements  

Paragraph  22  of  the  Vertical  Guidelines  explains  that  subcontracting  agreements  are 
agreements whereby a subcontractor undertakes to produce certain products (exclusively) 
for the  contractor based  on technology or  equipment provided by the contractor. These 
agreements  are  covered  by  the  Subcontracting  Notice, 167  which  sets  out  that  these 
agreements  generally  fall  outside  Article  101(1)  of  the  Treaty  if  certain  conditions  are 
met. Other restrictions imposed on the subcontractor may, however, be caught by Article 
101(1) of the Treaty.   

The  evidence  gathered  during  the  evaluation  indicates  that  a  large  majority  of  the 
respondents  to  the  public  consultation  (across  all  sectors  and  types  of  stakeholders) 
consider  that  the  relevant  paragraph  in  the  Vertical  Guidelines  provides  an 
appropriate  level  of  legal  certainty.  In  addition,  very  few  respondents  indicated  that 
this paragraph would need revision in light of new market developments. Similarly, most 
NCAs found the current rules to work well and had no specific comments in this regard. 

More  specifically,  some  stakeholders  explicitly  stated  that  the  exception  from  Article 
101(1)  of  the  Treaty  for  subcontracting  agreements  is  relevant  and  provides  legal 

including  agreements  with  hardcore  restrictions  ("appreciabilty  exception").  According  to  this 
presumption, as set out in paragraph 52 of the Effect on Trade Guidelines, vertical agreements are in 
principle  not  capable  of  appreciably  affecting  trade  between  Member  States  when  (i)  the  aggregate 
market share of the parties on any relevant market within the Union affected by the agreement does not 
exceed 5%, and (ii) the aggregate annual Union turnover of the supplier in the products covered by the 
agreement does not exceed 40 million euro. 

165  Judgment of 13 December 2012 in Case C-226/11, ECLI:EU:C:2012:795, Expedia. 
166 Respondents  noted  as  well  that  it  is  not  clear  from  the  Vertical  Guidelines  whether  all  excluded 

restrictions should be considered restrictions by effect. 

167  Commission  notice  of  18  December  1978  concerning  its  assessment  of  certain  subcontracting 
agreements in relation to Article 85 (1) of the EEC Treaty ("Subcontracting Notice"), OJ C 1, 3.1.1979, 
p. 2. 

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certainty. However, a few stakeholders also indicated that the relevant paragraph of the 
Vertical  Guidelines  and  its  interplay  with  the  Subcontracting  Notice  is  not 
sufficiently clear.  

In  particular,  respondents  understand  the  Vertical  Guidelines  to  define  subcontracting 
agreements  more  narrowly  than  the  Subcontracting  Notice,  as  the  Vertical  Guidelines 
only  refer  to  the  contractor  providing  "technology  or  equipment"  to  the  subcontractor, 
whereas  the  Subcontracting  Notice  also  mentions  the  use  of  industrial  property  rights. 
Some respondents on the distribution side, as well as legal professionals, indicated that 
paragraph  22  of  the  Vertical  Guidelines  could  be  clarified  by  including  a  reference  to 
industrial  property  rights.  This  would  also  make  clear  that  the  exception  for 
subcontracting  agreements  also  includes  retailer  brands  or  co-branding,168 even  if  the 
retailer  does  not  provide  technology  or  equipment  to  the  manufacturer,  but  only  the 
necessary know-how or a trademark. Adding trademarks to the definition would arguably 
imply an extension of the scope of the exception since trademarks (unlike know-how) are 
currently not mentioned in the Subcontracting Notice. 

Moreover,  respondents  from  the  banking  sector  pointed  out  that  the  Subcontracting 
Notice  should  not  be  restricted  to  goods,  but  also  include  services.  Other  respondents 
the 
noted 
Subcontracting  Notice  into  the  Vertical  Guidelines  since  subcontracting  is  a  vertical 
relationship.  

the  Commission  should  consider  reviewing  and 

incorporating 

that 

4.1.3.  Agency agreements  

Paragraphs 12-21 of the Vertical Guidelines provide guidance on the factors that define 
agency agreements. They explain that all obligations imposed on the agent in relation to 
the  contracts  concluded  under  an  agency  agreement  fall  outside  Article  101(1)  of  the 
Treaty since the selling or purchasing function of the agent forms part of the principal's 
activities and the principal bears the commercial and financial risks related to the selling 
and  purchasing  of  the  contract  goods  or  services.  Provisions  which  concern  the 
relationship between the agent and the principal may, however, infringe Article 101(1) of 
the Treaty. 

The evidence gathered during the evaluation indicates that stakeholders  generally agree 
with  the  fact  that  all  obligations  imposed  on  the  agent  in  relation  to  the  contracts 
concluded and/or negotiated on behalf of the principal fall outside Article 101(1) of the 

168  Co-branding  refers  to  situations  where  the  manufacturer  produces  a  product  according  to  the 

specifications of the retailer, which is then sold under the brand of the retailer. 

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Treaty. Some stakeholders explicitly indicated that this exception is adequate and should 
remain part of the rules.  

The  majority  of  the  respondents  to  the  public  consultation  indicated  that  the  relevant 
paragraphs  in  the  Vertical  Guidelines  provide  an  appropriate  level  of  legal 
legal 
certainty.  Nevertheless,  a  significant  number  of  respondents  (primarily 
professionals  and  some  business  associations  representing  both  suppliers  and 
distributors) considered these paragraphs to provide a lower level of legal certainty but 
only a few respondents stated that these paragraphs should be revised, in particular due 
to  the  lack  of  clarity  concerning  the  agent  definition  and  the  scope  of  the  exception. 
These  views  were  supported  by  NCAs,  which  indicated  that  the  relevant  provisions, 
while generally adequate, do not capture well the distinction between independent traders 
and agents acting on behalf of a supplier, in particular as regards online platforms. 

The evaluation identified the following main issues with regard to the functioning of 
the current rules in this area: 

First,  as  regards  the  definition  of  agent,  the  evaluation  pointed  to  a  lack  of  clarity 
concerning  the  level  and  type  of  risks  that  are  relevant  to  determine  whether  a  vertical 
agreement  can  be  considered  a  genuine  agency  agreement.  This  concerns  in  particular 
how to interpret the notion of "insignificant risks" set out in paragraph 15 of the Vertical 
Guidelines. Respondents to the public consultation also indicated that it is not clear how 
to  assess  this  in  cases  where  the  economic  risks  to  be  assumed  by  the  agent  are 
economically  transferred  back  to  the  principal  through  a  risk  coverage  payment.  They 
further  pointed  to  a  lack  of  clarity  regarding  the  definition  of  certain  types  of  risks 
mentioned  in  the  Vertical  Guidelines  such  as  "investments  in  sales  promotions". 
Participants  in  the  stakeholder  workshop  also  mentioned  that  there  is  a  lack  of  clarity 
regarding the notion of market specific investments and the number of principals that an 
agent can have without losing the benefit of the exception. Stakeholders further indicated 
that it is unclear whether a genuine agency agreement precludes the agent from acting at 
the same time as an independent distributor for the same or another supplier in the same 
product market (so-called "dual role"). 

Second,  the  evaluation  pointed  to  issues  regarding  the  application  of  the  agency 
exception  to  online  platforms.  In  this  regard,  respondents  to  the  public  consultation 
indicated that the criteria for defining an agent are difficult to apply to online platforms 
(e.g. as regards the definition of what would constitute market specific investments) and 
that this difficulty has resulted in divergent approaches among NCAs and national courts. 
These  views  were  confirmed  by  participants  in  the  stakeholder  workshop.  Respondents 
argued  further  that  the  application  of  the  agency  exception  is  especially  unclear  for 
intermediary  platforms,  such  as  comparison  websites,  which  primarily  aim  to  increase 

148 

 
 
 
 
 
transparency and decrease search costs for consumers, but do not necessarily engage in 
the resale of the product or service concerned, since their role in the distribution chain is 
different from that of traditional agents.  

Also NCAs stressed the need for more guidance on the relevant factors to be taken into 
account  in  the  assessment  of  agency  agreements.  There  are,  however,  diverging  views 
among them as to whether online platforms can qualify as genuine agents. Some NCAs 
consider that certain characteristics of online platforms indicate that they cannot form an 
integral part of the principal's distribution system and should therefore not be treated as 
genuine agents. This is notably because platforms usually bear the entire risk of investing 
in their infrastructure, deal with many different - often smaller - principals and can have a 
strong  bargaining  position.  Other  NCAs  take  the  view  that,  depending  on  the 
circumstances, online platforms could qualify as an agent. According to these NCAs, the 
assessment should be carried out on a case-by-case basis, which could take into account 
the following elements: (i) the risks borne by the online platforms, (ii) the fact that online 
platforms that act as an agent are often the undertaking with the strongest market position 
and  (iii)  whether  online  platforms  invest  heavily  in  data-gathering  and  processing 
capabilities and keep data of third-party customers exclusively for themselves. 

to 

tripartite  relationships  between  suppliers, 

Third,  stakeholders  raised  questions  about  the  possibility  of  applying  the  agency 
exception 
intermediaries  and  final 
customers.  Respondents  to  the  public  consultation  as  well  as  participants  in  the 
stakeholder  workshop  identified  a  number  of  situations  involving  intermediaries  who 
adhere  to  the  commercial  conditions  agreed  beforehand  between  their  supplier  and  a 
particular  customer  and  focus  solely  on  executing  that  agreement,  e.g.  by  taking  over 
logistical functions (so-called "fulfilment contracts"). Given that, in these situations, the 
intermediary does not have any influence on the commercial conditions of the agreement 
concerned  (notably  the  price),  stakeholders  take  the  view  that  the  intermediary  is  not 
acting as an independent distributor. At the same time, the intermediary may not fulfil the 
requirements of the agency exception either, e.g. because it acquires the ownership of the 
contract goods intended for resale or it assumes more than insignificant risks in relation 
to the execution of the agreement. Stakeholders argue that this limitation of the agency 
definition  does  not  adequately  reflect  the  economic  reality  of  these  intermediaries  and 
that the assessment of the economic risk distribution should therefore not  be dependent 
on whether there has been a transitory transfer of ownership to the agent.  

In  the  same  vein,  stakeholders  argue  that  the  execution  of  the  agreement  by  the 
intermediary according to the conditions agreed on between the supplier and a particular 
customer  should  not  be  considered  a  restriction  of  competition  within  the  meaning  of 
Article 101(1) of the Treaty since these conditions are no longer subject to competition 
once  the  agreement  has  been  concluded.  In  the  stakeholders'  view,  such  agreements 

149 

 
 
 
 
 
should therefore be excluded from the scope of Article 101(1) of the Treaty. This would 
allow  suppliers  and  their  customers  to  negotiate  prices  and  commercial  conditions 
without risking that this could be considered as resale price maintenance imposed by the 
supplier  on  the  intermediary.  This  argument  is  therefore  addressed  in  more  detail  in 
section 4.6.1 below on resale price maintenance.  

Fourth, other issues raised by stakeholders include the following: 

Paragraphs  18  and  19  of  the  Vertical  Guidelines  explain  that  only  the  obligations 
imposed on the agent in relation to the contracts concluded and/or negotiated on behalf of 
the principal fall outside Article 101(1) of the Treaty, whereas the contractual provisions 
regarding  the  relationship  between  the  principal  and  the  agent  (which  is  a  separate 
undertaking from the principal) may infringe Article 101(1) of the Treaty. This includes 
non-compete clauses, which may benefit from the safe harbour created by the VBER, in 
particular where the conditions of Article 5 of the VBER are met (e.g. the duration of the 
non-compete  clause  does  not  exceed  5  years).  In  this  regard,  some  respondents  to  the 
public consultation argue that the 5-year limitation for non-compete clauses may not be 
justified in all cases and should rather reflect the duration of the agency agreement.  

Some  respondents  argued  that  it  should  be  clarified  in  the  VBER  itself,  in  addition  to 
what is stated in paragraph 18 of the Vertical Guidelines, that the principal can impose on 
the agent other requirements than those listed in that paragraph (i.e. territorial, customer 
and  price  limitations)  in  the  interest  of  a  uniform  business  strategy  (e.g.  online  sales 
restrictions).  

4.2. SCOPE OF THE EXEMPTION (ARTICLES 1 AND 2 OF THE VBER)   

Article 1 of the VBER defines a number of relevant terms used in the VBER (see section 
4.2.1 below).  

Article 2(1) of the VBER sets  out  the effects  of the exemption.  It  provides that Article 
101(1) of the Treaty shall not apply to vertical agreements falling under the VBER to the 
extent that they contain vertical restrictions.  

The  remaining  provisions  of  Article  2  of  the  VBER  determine  the  scope  of  the 
exemption:  

According to Article 2(5) of the VBER, the VBER does not apply to vertical agreements 
the subject matter of which falls within the scope of another block exemption regulation. 
According  to  paragraph  46  of  the  Vertical  Guidelines,  this  refers  notably  to  vertical 
agreements covered by the block exemption regulation for technology transfer (TTBER) 
and  the  block  exemption  regulation  for  the  motor  vehicle  sector  (MVBER),  as  well  as 

150 

 
 
 
 
 
vertical  agreements  concluded  in  connection  with  horizontal  agreements  falling  under 
one of the two horizontal block exemption regulations (HBERs). 

Articles 2(2), 2(3) and 2(4) of the VBER set out under which conditions the exemption 
applies to specific types of vertical agreements, namely (i) vertical agreements between 
associations  and  their  members  (see  section  4.2.2  below),  (ii)  vertical  agreements 
containing  provisions  related  to  intellectual  property  rights  ("IPRs")  (see  section  4.2.3 
below) and (iii) vertical agreements entered into between competing undertakings ("dual 
distribution")  (see  section  4.2.4  below).  Paragraphs  27-46  of  the  Vertical  Guidelines 
provide additional guidance on how to interpret Article 2 of the VBER. 

The evidence gathered during the evaluation indicates that Article 2 of the VBER and the 
corresponding  paragraphs  of  the  Vertical  Guidelines  have  generally  functioned  well. 
However, some stakeholders pointed to provisions that are not sufficiently clear or not up 
to  date.  In  particular,  stakeholders  indicated  that  Article  2(4)  of  the  VBER  does  not 
adequately reflect the increasing importance of direct sales by manufacturers (see section 
4.2.4 below). 

4.2.1.  Definition of vertical agreements  

The VBER applies to vertical agreements, which Article 1(1)(a) of the VBER defines as 
"agreement or concerted practice entered into between two or more undertakings each of 
which  operates,  for  the  purposes  of  the  agreement  or  the  concerted  practice,  at  a 
different  level  of  the  production  or  distribution  chain,  and  relating  to  the  conditions 
under which the parties may purchase, sell or resell certain goods or services."  

Paragraphs  25  and  26  of  the  Vertical  Guidelines  specify  the  four  main  elements 
enshrined  in  this  definition.  First,  the  VBER  applies  to  agreements  and  concerted 
practices, but  not  to  unilateral  conduct  by undertakings. However, in  the  absence of an 
explicit  agreement  expressing  the  concurrence  of  wills  between  the  parties  to  the 
agreement, a unilateral policy of one party can constitute a tacit agreement if it receives 
the  (explicit  or  tacit)  acquiescence  of  the  other  party.  Second,  the  VBER  covers 
agreements and concerted practices between two or more undertakings, but not with final 
customers  not  operating  as  an  undertaking.  Third,  the  undertakings  concerned  should 
operate,  for  the  purposes  of  the  agreement,  at  a  different  level  of  the  production  or 
distribution  chain  (e.g.  at  manufacturer,  wholesale  or  retail  level),  while  not  excluding 
the possibility of being active at more than one level. Fourth, the VBER covers purchase 
and distribution agreements concerning the conditions for the purchase, sale or resale of 
the goods or services supplied and/or the conditions for the sale by the buyer of the goods 
or services that incorporate these goods or services. This means that vertical agreements 
relating to all final and intermediate goods and services are covered by the VBER.  

151 

 
 
 
 
 
The  evaluation  has  shown  that  stakeholders  consider  the  definition  of  vertical 
agreements  provided  in  Article  1(1)(a)  of  the  VBER  and  further  specified  in 
paragraphs 25 and 26 of the Vertical  Guidelines  to have worked well. This view is 
shared  by  a  large  majority  of  respondents  to  the  public  consultation  and  NCAs,  which 
consider that the current definition provides an appropriate level of legal certainty.  

Nevertheless,  a  minority  of  stakeholders  expressed  the  view  that  some  aspects  of  the 
current definition of vertical agreements are not sufficiently clear, while others are 
not  well  suited  to  capture  the  relationship  between  new  online  intermediaries  and 
their  users. A clarification of the rules with regard to the aspects set out below would, 
according  to  those  stakeholders,  help  improving  the  effectiveness  and  relevance  of  the 
current definition. 

Regarding  the  clarity  of  the  definition,  some  respondents  to  the  public  consultation 
consider  that  it  should  spell  out  more  clearly  whether  information  exchanges  between 
parties to a vertical agreement fall within the meaning of Article 1(1)(a) of the VBER and 
are  therefore  block-exempted  under  the  VBER.  Moreover,  some  respondents  asked  for 
further  guidance to  determine whether sales to  final  business  customers are covered by 
the  definition  of  vertical  agreements.  Finally,  some  respondents  noted  that,  while  the 
Vertical  Guidelines  clearly  indicate  that  coercion  exerted  on  retailers  by  a  supplier  to 
follow its unilateral policy would point to a tacit vertical agreement, the guidance is silent 
on coercion exerted by retailers on suppliers.  

Respondents to the public consultation also call for an adaption of the definition to reflect 
new market developments. Both respondents to the public consultation and NCAs noted 
that  the  emergence  of  new  intermediaries  such  as  online  marketplaces  and  price 
comparison  tools  has  blurred  the  lines  of  what  constitutes  a  vertical  agreement.  They 
consider that the Vertical Guidelines do not provide sufficient guidance to determine the 
(horizontal  or  vertical)  nature  of  the  relationship  of  these  intermediaries  with  their 
different user groups. Moreover, some respondents to the public consultation also noted 
that  the  current  definition  enshrined  in  the  VBER  only  refers  to  vertical  agreements 
relating  to  the  conditions  under  which  the  parties  may  "purchase,  sell  and  resell". 
However, agreements concluded with online intermediaries do not always fit into one of 
these  categories.  They  therefore  consider  that  including  a  reference  to  vertical 
agreements  "making  the  supplier's  products  available  to  third  parties"  would  improve 
legal certainty. In the same way, the current reference to the buyer as the company that 
"sells  goods  or  services  on  behalf  of  another  undertaking"  (i.e.  the  supplier)  in  Article 
1(1)(h) of the VBER could be expanded by adding that the buyer is "making available to 
third parties" the supplier’s products.   

152 

 
 
 
 
 
4.2.2.  Agreements between associations and their members 

Article  2(2)  of  the  VBER  includes  in  its  application  vertical  agreements  entered  into 
between an association of undertakings and its members, or between an association and 
its suppliers, subject to two conditions. First, all members of the association are retailers 
of goods (i.e. services are excluded). Second, each individual member of the association 
has a turnover not  exceeding EUR 50 million.  Paragraph 29 of the Vertical  Guidelines 
however  provides  in  addition  that  where  these  conditions  are  not  met  and  the  vertical 
agreements are to be assessed individually under Article 101 of the Treaty, they generally 
do  not  pose  competition  problems  if  only  a  limited  number  of  the  members  of  the 
association have a turnover exceeding the EUR 50 million threshold and these members 
together represent less than 15% of the collective turnover of all the members combined. 
Article  8  of  the  VBER  explains  the  rules  to  be  followed  for  the  calculation  of  the 
turnover  threshold  set  out  in  Article  2(2)  of  the  VBER  and  for  the  applicability  of  the 
exemption in case this turnover threshold would start to be exceeded. 

An  association  of  undertakings  may  involve  both  horizontal  and  vertical  agreements. 
Paragraph  30  of  the  Vertical  Guidelines  clarifies  in  this  regard  that  the  horizontal 
agreements  underlying  the  cooperation  between  the  undertakings  involved  have  to  be 
assessed  according  to  the  principles  set  out  in  the  Horizontal  Guidelines.  Only  if  the 
assessment of these horizontal agreements confirms their compatibility with Article 101 
of  the  Treaty,  does  it  become  relevant  to  assess  the  vertical  agreements  concluded 
between the association and its suppliers or individual members under the VBER and the 
Vertical Guidelines. 

The  evaluation  has  shown  that  stakeholders  consider  these  provisions  to  have  worked 
well. A majority of the respondents to the public consultation indicated that Article 2(2) 
of the VBER and the corresponding paragraphs of the Vertical Guidelines provide 
an appropriate level of legal certainty. One respondent indicated that the conditions of 
Article 2(2) of the VBER would however lead to the exemption  of vertical  agreements 
that  do  not  fulfil  the  conditions  of  Article  101(3)  of  the  Treaty.  In  addition,  very  few 
respondents indicated that this area would need revision in light of market developments. 
Most NCAs also found these provisions to have worked well. 

Nevertheless, the evaluation pointed to some issues  with  regard to the functioning of 
these provisions. 

First, stakeholders questioned the appropriateness of the thresholds set out in Article 2(2) 
of  the  VBER  and  paragraph  29  of  the  Vertical  Guidelines.  Respondents  to  the  public 
consultation raised the need to adapt these thresholds to reflect the market developments, 
growth and inflation that took place over the last 10 years. In their view, even relatively 
small retailers nowadays easily achieve a turnover of EUR 50 million and also retailers 

153 

 
 
 
 
 
with sales exceeding the turnover threshold need to join associations of retailers to stay 
competitive and should therefore benefit from the safe harbour of the VBER. As regards 
the  15%  share,  respondents  argue  that  it  should  refer  to  the  share  of  each  individual 
undertaking rather than the share represented by the combined turnover of the members 
of the association. Other respondents indicated that the turnover threshold is inadequate 
and  should  be  replaced  by  a  market  share  threshold.  NCAs  also  raised  the  question 
whether  the  turnover  threshold  is  still  necessary.  NCAs  further  pointed  out  that  more 
examples  in  paragraphs  29  and  30  of  the  Vertical  Guidelines  would  be  helpful  to 
illustrate how to apply Article 2(2) of the VBER in practice.   

Second,  respondents  to  the  public  consultation  (particularly  from  the  retail  sector) 
pointed  to  the  pro-competitive  effects  of  associations  of  independent  retailers.  They 
therefore  argued  that  the  Vertical  Guidelines  should  spell  out  more  clearly  that  joint 
purchasing  agreements  between  independent  retailers  are  generally  considered  pro-
competitive under the conditions set out in the Horizontal Guidelines.  

Third, as regards the limitation of the exemption to associations of retailers distributing 
goods, a few respondents argue that there are no reasons to exclude associations of other 
undertakings (e.g. service providers) from the benefit of the VBER. 

Fourth, NCAs indicated  that the Vertical  Guidelines  do not  provide sufficient  guidance 
concerning  the  fact  that  the  exemption  for  agreements  between  associations  and  their 
members only applies if also the criteria set out in Articles 3 to 5 of the VBER are met 
and if there are no horizontal concerns.   

4.2.3.  Agreements containing provisions on IPR 

Article  2(3)  of  the  VBER  and  paragraph  31  of  the  Vertical  Guidelines  set  out  that  the 
exemption applies to vertical agreements containing provisions relating to the assignment 
to or the use by the buyer of IPR only if the following five conditions are fulfilled. First, 
the IPR provisions must be part of a vertical agreement as defined in Article 1(1)(a) of 
the VBER, which contains conditions on the purchase, sale or resale of certain goods or 
services, thus excluding the assignment or licensing of IPRs for the manufacture of goods 
or pure licensing agreements. Second, the IPRs must be assigned to or licensed for use by 
the  buyer,  thus  excluding  the  provision  of  IPRs  from  the  buyer  to  the  supplier  (e.g. 
subcontracting involving the transfer of know-how). Third, the IPR provisions must not 
constitute the primary object  of the agreement, i.e. the  IPRs assigned to  or licensed for 
use  by  the  buyer  must  serve  the  implementation  of  the  vertical  agreement.  Fourth,  the 
IPR provisions must be directly related to the use, sale or resale of goods or services by 
the buyer or its customers, thus facilitating the use, sale or resale of the contract goods or 
services. Fifth, the IPR provisions in relation to the contract goods or services must not 

154 

 
 
 
 
 
contain restrictions of competition having the same object as vertical restrictions that are 
not  exempted  under  Articles  4  and  5  of  the  VBER.  Paragraphs  31-45  of  the  Vertical 
Guidelines provide further guidance on these conditions as well as the types of IPRs that 
may be considered to serve the implementation of vertical agreements. 

The  evaluation  has  shown  that  stakeholders  consider  these  provisions  to  have  worked 
well. A large majority of the respondents to the public consultation indicated that Article 
2(3)  of  the  VBER  and  the  corresponding  paragraphs  of  the  Vertical  Guidelines 
provide  an  appropriate  level  of  legal  certainty.  No  respondent  considered  that  the 
conditions of Article 2(3) of the VBER lead to the exemption of vertical agreements that 
do  not  fulfil  the  conditions  of  Article  101(3)  of  the  Treaty.  In  addition,  very  few 
respondents indicated that this area would need revision in light of market developments. 
Similarly, NCAs indicated that these provisions have generally functioned well. 

The  main  issue  raised  by  stakeholders  with  regard  to  these  provisions  relates  to  the 
definition  of  know-how  in  the  context  of  franchising  agreements  (paragraphs  43-45  of 
the Vertical Guidelines). This issue is dealt with in more detail in section 4.6.8 below on 
franchising. 

Other issues raised by stakeholders include, first, the lack of guidance on various types of 
IPR arrangements that are not covered by the VBER, nor by any other block exemption, 
such as those listed in  paragraph 33 of the Vertical  Guidelines.169 Some respondents  to 
the  public  consultation  argue  that  the  VBER  should  apply  to  pure  brand  license 
agreements.  Other  respondents  mention  that  the  VBER  should  cover  the  licensing  of 
copyright  for  the  purposes  of  reproduction  and  the  licensing  of  trademarks,  as  the 
Guidance  on  by  object  restrictions  seems  to  indicate  that  these  are  subject  to  the  rules 
applicable to vertical restrictions. 

Second,  respondents  also  pointed  to  a  lack  of  guidance  on  field-of-use  restrictions  in 
vertical distribution agreements, similar to the guidance provided by the block exemption 
regulation  for  technology  transfer  and  the  related  Commission  guidelines.  They  argue 
that in particular guidance on how such restrictions can be distinguished from hardcore 
customer restrictions would be helpful. 

169  Paragraph  33  of  the  Vertical  Guidelines  clarifies  that  the  exemption  does  not  apply  to  agreements 
concerning  the  assignment  or  licensing  of  IPRs  for  the  manufacture  of  goods,  nor  to  pure  licensing 
agreements. This is because the first condition of Article 2(3) of the VBER requires the IPR provisions 
to be part of an agreement with conditions under which the parties may purchase, sell or resell certain 
goods or services. Paragraph 33 of the Vertical Guidelines lists some examples of agreements that are 
therefore not covered by the VBER, such as the pure licence of a trademark or sign for the purposes of 
merchandising. 

155 

 
 
 
 
 
                                                           
4.2.4.  Dual distribution 

Article 2(4) of the VBER sets out the general rule that the VBER does not cover vertical 
agreements entered into between competitors as defined in Article 1(1)(c) of the VBER. 
However, it makes certain exceptions to this general rule for non-reciprocal agreements 
between competitors. These are agreements where the parties  act  in  different  economic 
roles  and  do  not  act  on  the  same  level  of  trade  (i.e.  agreements  where  only  one  party 
distributes for the other). Such non-reciprocal agreements can benefit from the VBER if 
the supplier is a manufacturer of goods who also acts as a distributor for these goods or a 
service  provider  who  operates  at  several  levels  of  trade,  whereas  the  buyer  is  only  a 
distributor  (i.e.  it  does  not  compete  with  the  supplier  at  manufacturing  level)  or  only 
operates at the retail level (i.e. it does not compete with the supplier at the level of trade 
at which it purchases the contract services). These situations are typically referred to as 
dual distribution. At the time of the adoption of the VBER, taking into account that dual 
distribution was rather limited in scope back then, the potential impact of the competitive 
relationship between the parties at retail level was considered to be of lesser importance 
than  the  potential  impact  of  the  vertical  agreement  on  competition  in  the  supply  or 
distribution of the goods or services concerned.170 Paragraphs 27 and 28 of the Vertical 
Guidelines provide additional guidance on the application of Article 2(4) of the VBER. 

The  evidence  gathered  during  the  evaluation  indicates  that  stakeholders  perceive  the 
qualification of dual  distribution  as a vertical  relationship and its exemption  from 
the prohibition of Article 101(1) of the Treaty as adequate. They therefore argue that 
it  should  remain  part  of  the  VBER.  However,  they  point  out  that  the  rules  do  not 
adequately  reflect  a  number  of  issues  that  have  become  more  prominent  with  the 
increased  importance  of  dual  distribution  over  time,  particularly  as  a  result  of  the 
increasing digitalisation and the growth of online sales. 

A majority of the respondents to the public consultation indicated that Article 2(4) of the 
VBER and the corresponding paragaphs of the Vertical Guidelines provide either a 
slightly low or a very low level of legal certainty. Nevertheless, a significant number of 
respondents  to  the  public  consultation  indicated  that  there  is  an  appropriate  level  of 
legal certainty. Only very few respondents171 to the public consultation indicated that the 
conditions of Article 2(4) of the VBER lead to the exemption of vertical agreements that 

170  See  examples  provided  in  Brenning-Louko/Gurin/Peeperkorn/Viertiö,  Vertical  Agreements:  New 
Competition Rules for the Next Decade, Competition Policy International, Number 2  - 2010, p. 14-19 
(see section dealing with vertical agreements between competitors). 

171  Most of the respondents who indicated this are active on the distribution side of the supply chain, with 

the majority representing the motor vehicle sector. 

156 

 
 
 
 
 
                                                           
do  not  fulfil  the  conditions  of  Article  101(3)  of  the  Treaty.  Similarly,  only  few 
respondents172 indicated  that  this  provision  would  need  to  be  reviewed.  NCAs  overall 
also  confirmed  that  the  exemption  of  dual  distribution  is  adequate,  but  that  the  current 
rules are not sufficiently clear on a number of aspects.  

Stakeholders raised the following issues regarding dual distribution: 

First, stakeholders raised the issue of information exchanges between the supplier and the 
buyer in  dual  distribution scenarios. Respondents  to  the public consultation173 indicated 
that there is insufficient clarity as to whether information exchanges in dual distribution 
scenarios are to be treated as part of the vertical relationship and can thus be considered 
as covered by the VBER. There is also a lack of clarity as to what extent or under which 
conditions information exchanges in dual distribution scenarios are admissible or instead 
problematic. In this regard, participants in the stakeholder workshop specified further that 
the  current  rules  do  not  adequately  distinguish  between  (i)  information  exchanges  that 
cannot be considered a restriction of competition pursuant to Article 101(1) of the Treaty, 
(ii)  information  exchanges  covered  by  the  VBER  and  (iii)  information  exchanges  that 
cannot be exempted and are thus subject to an effects analysis. 

The predominant view among the respondents to the public consultation, which was also 
expressed  by  the  participants  in  the  stakeholder  workshop,  is  that  exchanges  of  data  in 
the  context  of  dual  distribution  (including  commercially  sensitive  data)  can  have  pro-
competitive  effects,  provided  that  the  data  is  not  used  to  restrict  the  freedom  of  the 
distributor in a manner that would be considered a hardcore restriction under the VBER. 
According  to  both  the  respondents  to  the  public  consultation  and  the  workshop 
participants, collecting data such as pricing data or data on consumer profiles from their 
distributors  may  allow  suppliers  to  distribute  their  products  more  effectively  and  thus 
enhance inter-brand competition. Additional  guidance would also  be needed as to  what 
extent the information collected by suppliers can be passed on within a company.  

Other respondents, however, expressed concerns that exempting any type of information 
exchange in a dual distribution scenario may allow a supplier to require its distributors to 
pass  on  customer  data  that  would  provide  the  supplier´s  downstream  retail  operations 
with  a strategic advantage  and restrict  the distributors´  ability to  compete effectively at 
retail level. 

172  Primarily legal professionals and distributors from the motor vehicle sector. 
173  These respondents represented both the supply side and the distribution side of the market, as well as a 

variety of sectors. 

157 

 
 
 
 
 
                                                           
Second, stakeholders also pointed to the fact that Article 2(4)(a) of the VBER limits the 
exemption  for  dual  distribution  to  manufacturers  distributing  goods  downstream,  thus 
excluding wholesalers or independent  importers  who are also  active in  the downstream 
market from the benefit of the VBER. Respondents to the public consultation indicated 
that  it  is  unclear  to  what  extent  dual  distribution  scenarios  involving  other  suppliers 
would be different from dual distribution by a manufacturer. Therefore, they argued that 
the exemption should also extend to the wholesale-retail relationship. Participants in the 
stakeholder workshop expressed the same view. 

Third,  stakeholders  also  pointed  to  issues  as  regards  the  interplay  with  the  Horizontal 
Guidelines.  NCAs  indicated  that  there  is  insufficient  clarity  on  this.  For  instance, 
paragraph 27 of the Vertical Guidelines does not clearly stipulate if the horizontal aspects 
of a mixed horizontal/vertical  agreement must always be assessed under  the Horizontal 
Guidelines  first.  NCAs  take  the  view  that  it  is  only  if  this  first  assessment  leads  to  the 
conclusion  that  the  cooperation  between  competitors  would,  in  principle,  be  acceptable 
under  the  Horizontal  Guidelines  that  a  second  assessment  under  the  VBER  should  be 
carried out. Respondents to the public consultation indicated that it is not clear whether 
dual distribution scenarios to which the VBER does not apply because the market share 
threshold is exceeded by one or both parties to the agreement should be assessed under 
Article 101 of the Treaty as a vertical agreement or as a horizontal agreement. 

Fourth,  as  regards  private  label/retailer  brands,  respondents  to  the  public  consultation 
primarily  representing  the  supply  side  indicated  that  it  is  not  sufficiently  clear  whether 
agreements between a manufacturer and a retailer that sells private label goods produced 
by third parties are covered by the VBER. Respondents argued this should be the case, as 
the  relevant  relationship  is  predominantly  a  vertical  one.  In  this  context,  respondents 
from the retail side indicated that paragraph 27 of the Vertical Guidelines lacks clarity as 
to  the  fact  that  retailers’  private  labels  compete  with  manufacturers’  brands.  This  is 
because  the  paragraph  states  that  when  a  retailer  provides  specifications  to  a 
manufacturer to produce particular goods under the retailer's brand name, the retailer is 
not to be considered a manufacturer of such private label goods.  

Fifth,  respondents  representing  in  particular  the  distribution  side  of  the  motor  vehicle 
sector  argued  that  the  increase  of  direct  sales  by  manufacturers  (and  the  corresponding 
decrease of sales by distributors) has an impact on the viability of the investments they 
are  required  to  make  as  dealers.  In  view  of  this,  they  argue  that  direct  sales  by 
manufacturers  above  a  certain  threshold  (e.g.  20%)  of  the  global  value  of  a 
manufacturer’s sales should not be exempted by the VBER and thus be made subject to 
an individual assessment. 

158 

 
 
 
 
 
Sixth, some respondents indicated that the definition of potential competitor as set out in 
paragraph 27 of the Vertical Guidelines is not harmonised with other competition related 
regulations,  in  particular  as  regards  the  time  period  for  entry  in  the  short  term. 174 
Respondents  further  stated  that  the  definition  has  become  blurred  with  the  increase  of 
dual distribution. It would therefore need to be revised or further developed, in particular 
to better reflect the online environment and its specific characteristics (e.g. by providing 
examples  from  the  online  world  as  to  what  situations  would  be  considered  as  falling 
within the scope of the definition and what would fall outside). 

Seventh,  NCAs  indicated  that  there  is  a  lack  of  clarity  with  regard  to  the  relationship 
between hybrid platforms, which act as both suppliers of online platform/intermediation 
services and retailers, and the sellers present on such platforms. They questioned notably 
whether  such  hybrid  platforms  should  be  covered  by  Article  2(4)  of  the  VBER,  since 
their hybrid nature and the fact that they are not the manufacturer of the product or the 
provider of the service they resell at retail level would be difficult to reconcile with the 
ratio legis of this provision. 

Eighth, NCAs also argued that there is insufficient clarity as regards the conditions under 
which  the  exemption  for  dual  distribution  applies  to  service  providers.  Notably,  the 
Vertical  Guidelines  should  specify  whether,  in  order  to  qualify  as  a  service  provider 
pursuant to Article 2(4)(b) of the VBER, the supplier itself must be at the origin of the 
service concerned or if the mere reselling of the service supplied by another (upstream) 
undertaking is sufficient. 

4.3. MARKET SHARE THRESHOLDS FOR THE SUPPLIER AND THE BUYER 

The  likelihood  that  efficiency-enhancing  effects  will  outweigh  any  anti-competitive 
effects resulting from restrictions contained in vertical agreements and that such vertical 
agreements therefore comply with the conditions of Article 101(3) of the Treaty depends 
on the degree of market power held by the parties to the agreement. The VBER therefore 
relies  on  market  share  thresholds  for  both  the  supplier  and  the  buyer  to  determine  the 
scope of the block exemption. According to Article 3 of the VBER, the block exemption 
will only apply if (i) the market share held by the supplier does not exceed 30% on the 
market on which it sells the contract goods or services and (ii) the market share held by 
the buyer does not exceed 30% on the market on which it purchases the contract goods or 
services. 

174  This time period is 1 year in the VBER, 3 years in the Horizontal Guidelines and 1-2 years (or longer) 

in the Technology Transfer Guidelines. 

159 

 
 
 
 
 
                                                           
Article  7(a)-(c)  of  the  VBER  sets  out  the  rules  for  calculating  the  market  share  of  the 
supplier  and  the  buyer  in  order  to  determine  whether  the  VBER  applies  to  a  particular 
vertical  agreement.  Article  7(d)-(f)  of  the  VBER  sets  out  the  rules  for  cases  where  the 
market  shares  of  the  parties  to  a  vertical  agreement  were  initially  below  the  threshold 
defined in Article 3 of the VBER but subsequently exceed that threshold. In such cases 
the block exemption continues to apply for a period not exceeding two calendar years in 
total.  

Paragraphs 86-95 of the Vertical Guidelines provide further guidance on the definition of 
the  relevant  market  and  the  calculation  of  the  market  shares  of  the  parties  to  a  vertical 
agreement. 

The  evidence  gathered  during  the  evaluation  indicates  that  stakeholders  consider  the 
VBER  provisions  concerning  the  market  share  thresholds  as  generally  working  well. 
Most respondents to the public consultation (business associations, companies active on 
both  the  supply  and  the  distribution  side  of  the  market,  as  well  as  legal  professionals) 
expressed the view that Article 3 of the VBER and the corresponding paragraphs of 
the Vertical  Guidelines provide an appropriate level of legal certainty. Most NCAs 
share  this  view.  Some  of  them  expressly  mentioned  the  high  level  of  legal  certainty 
achieved  through  the  market  share  thresholds  set  out  in  the  VBER,  which  should 
therefore continue to apply.  

Nevertheless,  stakeholders  also  raised  some  issues  regarding  the  application  of  the 
market share thresholds set out in the VBER: 

First, some respondents to the public consultation (mainly law firms and associations of 
lawyers) pointed to a lack of clarity and consistency with regard to the definition of the 
relevant  market.  They  indicated  that  businesses,  as  well  as  NCAs,  cannot  rely  on  a 
uniform set of rules and precedents to define the relevant market. The outcome of their 
assessment  may  therefore  differ  depending  on  the  reference  material  used  (e.g.  EU 
regulations  and  case  law  as  compared  to  national  rules  and  case  practice;  antitrust 
regulations and case law as compared to those for the field of merger control). Given the 
legal  risks  associated  with  defining  the  relevant  market  wrongly,  businesses  therefore 
tend to adopt a rather conservative approach in their assessment.  

In the same vein, law firms that took part in the evaluation study indicated that there is a 
lack of clarity on relevant definitions and insufficient guidance for the self-assessment of 
market shares. They argued that this reduces the legal certainty provided by the VBER, 
together  with  the  Vertical  Guidelines,  and  thus  has  a  negative  impact  on  the  further 
development of their business.  

160 

 
 
 
 
 
For some respondents, the rules currently used to define the relevant market, which were 
designed  based  on  more  traditional  markets,  are  not  well  suited  to  determine  relevant 
product  and  geographic  markets 
in  emerging  online  markets  or  when  online 
intermediaries (e.g. platforms) are involved. This view is also shared by some NCAs.  

Some  respondents  to  the  public  consultation  also  argued  that  the  current  rules  on  the 
definition of the geographic market do not take into account recent market developments. 
For other respondents (notably retailers and an association of lawyers), the current rules 
are not sufficiently clear as to whether a distribution network covering several Member 
States  should  be  considered  as  national  or  European  in  scope.  Some  NCAs  further 
indicated that it is not clear whether, for the purposes of assessing the market shares of 
the  supplier  and  the  buyer,  it  is  necessary  to  define  only  one  or  different  (separate) 
geographic markets (i.e. the market on which the supplier sells and the market on which 
the buyer purchases the contract goods or services).  

Second, stakeholders pointed to difficulties in assessing the market shares of the supplier 
and  the  buyer.  Both  respondents  to  the  public  consultation  and  NCAs  stressed  that  the 
calculation  of  the  market  share  of  online  platforms  can  be  particularly  difficult.  NCAs 
stated that it is not clear from the current rules whether the market share of a distribution 
platform  should  be  calculated  for  each  market  on  which  the  platform  purchases  the 
products  or  services  offered  on  the  platform,  or  for  all  the  products  or  services 
combined.175 In the same vein, NCAs stated that when determining the market share of a 
supplier platform, it has to be established whether the relevant market is confined to the 
supply  of  platform  services  or  if  other  suppliers  of  comparable  services  (e.g.  in  the 
offline  world)  have  to  be  taken  into  account  and,  if  so,  to  what  extent.176 Furthermore, 
some NCAs pointed to a lack of clarity regarding the treatment of multi-sided platforms, 
for which it is notably unclear whether the market share threshold has to be met on each 
side of the market or whether only one side of the market should be considered.  

Some law firms interviewed for the evaluation study also stressed the difficulties linked 
to the definition of the markets concerned and the assessment of the market shares of the 
parties  involved  in  an  agreement,  notably  those  of  the  buyer.  They  pointed  out  that 
businesses  may  need  external  legal  assistance  to  perform  such  complex  analysis. 

175  Distribution  platforms  are  understood  by  NCAs  as  being  directly  involved  in  the  conclusion  of 
individual  transactions  via  the  platform,  which  could  therefore  qualify  as  a  buyer  of  the  product  or 
service offered by the seller on the platform and as a supplier/reseller of the product or service vis-à-vis 
end customers. 

176  Supplier  platforms  are  understood  by  NCAs  as  providing  only  the  infrastructure  for  the  sellers  and 

buyers on the platform to interact and conclude a particular transaction. 

161 

 
 
 
 
 
                                                           
Therefore,  complying  with  the  market  share  thresholds  enshrined  in  the  VBER  can 
generate costs for businesses. 

In addition, stakeholders that commented on Article 3 of the VBER raised a number of 
substantive issues in relation to the market share thresholds:   

First,  some  respondents 
appropriateness of the current market share thresholds in certain situations.   

the  public  consultation  and  NCAs  questioned 

to 

the 

A  few  respondents  to  the  public  consultation,  among  which  associations  of  lawyers, 
called into question the appropriateness of a market share threshold for both the supplier 
and the buyer side for the following reasons. Firstly, they argued that having to assess the 
market  shares  of  both  parties  to  the  agreement  is  challenging  and  costly  for  businesses 
since they do not always have (easy) access to relevant data concerning the other party. 
On this particular point, the evaluation study also reported the view of law firms  and a 
competition  law  professor,  which  indicated  that  the  VBER  can  increase  costs  for 
businesses,  as  it  requires  them  to  collect  more  information  than  under  the  1999  VBER 
due  to  the  newly  introduced  market  share  threshold  for  the  buyer  side.  Secondly,  the 
respondents pointed out  that the cumulative threshold is unnecessary, since it would be 
sufficient  to  rely  on  the  market  share  of  the  party  that  is  in  a  position  to  impose  a 
particular  vertical  restriction  (i.e.  typically  the  supplier).  Thirdly,  a  few  respondents 
argued that focusing on the market share of the buyer on the upstream market (where the 
buyer  purchases  the  contract  goods  or  services)  is  not  representative  of  its  ability  to 
impose  a  restriction  on  the  downstream  market.  Fourthly,  some  respondents  indicated 
that  the  buyer's  market  share  should  also  include  online  sales  of  the  contract  goods  or 
services.  

Other respondents to the public consultation considered the 30% threshold as inadequate 
to properly capture vertical relations in oligopolistic markets characterised by economies 
of scale, high investments and few competing players. Some NCAs further explained that 
in  markets  with  two  to  four  large  players,  the  individual  market  shares  might  fluctuate 
around 30%, so that even if all members of the oligopoly apply identical practices, some 
may benefit from the VBER, while others may fall outside its scope. This would create 
arbitrary and discriminatory results, as well as possible market distortions. According to 
these NCAs, in order to avoid such issues, there may be a need for a deeper assessment 
of the cumulative effects of similar vertical restrictions and the possible introduction of 
an additional oligopoly threshold in combination with a lower market share threshold for 
each individual oligopoly member (e.g. an individual market share of at least 15% plus a 
combined oligopoly market share of 50%). 

162 

 
 
 
 
 
Second, some stakeholders and NCAs consider that the market share thresholds lead to 
false  positives,  i.e.  they  result  in  the  inclusion  of  vertical  agreements  that  should  not 
benefit from the block exemption, for the following reasons.  

For  some  respondents  to  the  public  consultation  (mainly  suppliers  and  associations  of 
lawyers)  and some NCAs, the 30% market  share threshold is  too  high when applied to 
online  intermediaries.  This  is  because  such  online  intermediaries  may  have  significant 
market power even below this threshold in view of certain characteristics of the market in 
which  they  operate  (e.g.  network  effects  and  barriers  to  entry)  and  certain  advantages 
they  may  enjoy  (e.g.  data  advantages,  financial  strength  and  gatekeeper  role).  At  the 
same time, some NCAs pointed out that if the market share thresholds of the VBER were 
to  be  reduced  for  platforms,  this  would,  according  to  their  experience,  put  significant 
weight  on  the  proper  definition  of  what  can  be  considered  a  platform  for  that  purpose. 
Moreover,  it  would  be  equally  difficult  to  agree  on  the  level  of  any  such  new  market 
share threshold.  

In  this  context,  notably  suppliers  and  a  few  NCAs  indicated  that  market  shares  are 
generally not  an accurate indicator of market power in digital technology sectors. They 
argued that alternative criteria such as network effects,  cost structures or access to data 
would be better suited to determine market power in the digital sphere. However, neither 
these nor other criteria that could be used as alternatives to market shares in zero-price 
markets  (e.g.  the  number  of  users  or  the  volume  of  transactions  on  a  platform)  are 
mentioned in the VBER or the Vertical Guidelines.   

A  few  NCAs  also  highlighted  the  fact  that  the  degree  of  market  power  of  multi-sided 
platforms  may  differ  depending  on  the  characteristics  of  the  market  concerned  and 
consumer  behaviour  (e.g.  multi-homing  or  single  homing).  However,  under  the  current 
rules,  the  market  share  thresholds  cannot  be  differentiated  with  regard  to  multi-sided 
platforms in order to better reflect such differences. 

Third, some stakeholders and NCAs consider that the market share thresholds lead to 
false  negatives, i.e. they result in  the exclusion of vertical  agreements  from  the VBER 
even though they should benefit from the block exemption. 

Some respondents to the public consultation (mainly suppliers and lawyers) argued that 
the  30%  market  share  threshold  is  too  low.  In  their  view,  the  case  law  in  relation  to 
Article 102 of the Treaty indicates that market power is not expected to arise if a business 
has  a  market  share  below  40%,  with  vertical  agreements  between  businesses  with  a 
market share of 30% to 40% thus being presumptively pro-competitive. They argued that 
the overly conservative market share thresholds of the VBER therefore wrongly exclude 
the businesses concerned from the benefit of the block exemption. They also argued that 
this  has  a  chilling  effect  on  businesses  by  discouraging  them  from  entering  into  pro-

163 

 
 
 
 
 
competitive  vertical  agreements  in  view  of  the  legal  risks  at  stake.  Similar  views  were 
expressed  at  the  stakeholder  workshop  where  some  participants  argued  that  vertical 
agreements  between  parties  with  market  shares  of  35%  or  40%  can  also  be  efficiency-
enhancing and should therefore be exempted.  

Some  respondents  to  the  public  consultation  also  considered  the  30%  market  share 
threshold  too  low  in  view  of  the  difficulties  that  businesses  face  in  calculating  their 
market  shares  with  precision.  This  would  result  in  the  exclusion  of  pro-competitive 
vertical  agreements  from  the  scope  of  the  VBER  where  businesses  prefer  to  take  a 
cautious approach in this regard. They also pointed to  overly narrow market definitions 
by  some  NCAs  as  having  a  similar  effect.  This  issue  was  echoed  at  the  stakeholder 
workshop  where  some  participants  pointed  to  the  fact  that  the  EU  rules  on  market 
definition are not binding for NCAs. These participants argued that changing this could 
address  the  issue  of  markets  being  defined  too  narrowly  and  of  divergent  market 
definitions in cases pursued by different NCAs.  

Moreover,  some  respondents  to  the  public  consultation  pointed  to  a  lack  of  coherence 
between  the  market  share  thresholds  in  the  VBER  and  those  applying  to  selective 
distribution systems in the motor vehicle sector. They pointed out that for the distribution 
of  new  motor  vehicles,  the  Supplementary  Commission  Guidelines  on  vertical 
restrictions  in  agreements  for  the  sale  and  repair  of  motor  vehicles  and  for  the 
distribution  of  spare  parts  for  motor  vehicles  acknowledge  that  quantitative  selective 
distribution will generally satisfy the conditions laid down in Article 101(3) of the Treaty 
if the parties’ market shares do not exceed 40%. They argued that this is also true in other 
sectors,  notably  in  the  cosmetics  sector,  where  the  number  of  brands  is  higher  and  the 
barriers to entry are lower than in the motor vehicle sector. Therefore, the VBER should 
exempt  selective  distribution  when  the  market  share  of  the  supplier  is  above  30%  but 
does not exceed 40%. 

Finally,  other  respondents  to  the  public  consultation  mentioned  that  under  the  current 
rules it is not possible for a supplier with a market share exceeding 30% to benefit from 
the block exemption for the  introduction  of a very innovative, novel  product  or service 
even though, in the absence of any degree of durable market power, there is no reason to 
assume  that  vertical  agreements  in  new  markets  are  generally  capable  of  having  anti-
competitive effects. 

Fourth, respondents to the public consultation pointed to issues in relation to the rules set 
out in Article 7(d)-(f) of the VBER concerning the applicability of the block exemption 
in  case  the  market  shares  of  the  parties  to  a  vertical  agreement  covered  by  the 
VBER exceed the thresholds defined in Article 3 of the VBER for a limited period 
of  time.  They  considered  that  these  thresholds  are  too  low  and  unnecessarily 

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conservative,  notably  with  regard  to  the  introduction  of  a  novel  product.  At  the  same 
time,  they  pointed  out  that  granting  the  benefit  of  the  block  exemption  during  a  non-
transitory  period  to  businesses  with  significant  market  power,  especially  in  tipping 
markets,  could  undermine  the  objective  of  the  VBER  (i.e.  to  capture  those  vertical 
agreements  for  which  it  can  be  assumed  with  sufficient  certainty  that  they  generate 
efficiencies in line with Article 101(3) of the Treaty). 

4.4. THE CONCEPT OF HARDCORE RESTRICTIONS  

Article  4  of  the  VBER  contains  a  closed  list  of  vertical  restrictions  which  are  likely  to 
restrict competition and harm consumers or which are not indispensable to the attainment 
of  efficiency-enhancing  effects  (so-called  hardcore  restrictions).177 Vertical  agreements 
containing  such  severe  restrictions  of  competition  are  excluded  from  the  benefit  of  the 
block exemption irrespective of the market share of the parties to the agreement.178   

Paragraph 47 of the Vertical Guidelines sets out a double presumption resulting from the 
inclusion  of  a  hardcore  restriction  in  a  vertical  agreement,  which  is  relevant  for  the 
individual assessment of this agreement under Article 101 of the Treaty. First, there is a 
positive  presumption  that  the  agreement  has  actual  or  likely  negative  effects  and 
therefore  falls  within  Article  101(1)  of  the  Treaty.  Second,  there  is  a  negative 
presumption in that the agreement is unlikely to fulfil the conditions of Article 101(3) of 
the  Treaty.  The  latter  is  a  rebuttable  presumption,  which  means  that  it  is  without 
prejudice  to  the  possibility  of  the  parties  to  demonstrate  pro-competitive  effects  of  a 
particular  hardcore  restriction.  In  addition,  paragraphs  48-59  of  the  Vertical  Guidelines 
provide guidance on the interpretation of the list of hardcore restrictions set out in Article 
4 of the VBER. 

First, the evaluation did not identify any issues with regard to the use of the concept 
of  hardcore  restrictions  in  the  context  of  the  VBER  and  notably  the  implications  of 
introducing such restrictions in a vertical agreement for the applicability of the VBER. 

Respondents  to  the  public  consultation  argued  that  the  use  of  the  concept  of  hardcore 
restrictions has two main positive effects. The concept increases legal certainty because it 
provides clear guidance to businesses that want to minimise commercial and legal risks 
concerning  the  restrictions  they  should  not  include  in  their  supply  and  distribution 
agreements.  It  also  reduces  the  need  to  hire  economic  or  legal  experts,  or  to  sustain 
proceedings  before  national  courts  or  NCAs,  especially  for  SMEs,  thus  resulting  in  a 

177  See VBER, recital 10. 
178  See VBER, recital 10, and Vertical Guidelines, paragraph 47. 

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reduction  of  associated  costs.  Also  NCAs  confirmed  the  importance  of  having  a  list  of 
hardcore restrictions in the VBER. 

Moreover, the respondents to the public consultation indicated that they understood the 
consequences of including a hardcore restriction in a vertical agreement (i.e. the loss of 
the benefit of the block exemption for the totality of the agreement). 

Second,  the  evaluation  however  identified  issues  with  regard  to  the  clarity  of  the 
concept of hardcore restrictions.  

The respondents to the public consultation, the participants in the stakeholder workshop 
and the evidence collected by the evaluation study pointed to difficulties with identifying 
the  practices  covered  by  this  concept,  notably  since  Article  4  of  the  VBER  has  been 
interpreted  rather  widely  by  some  NCAs.  Respondents  to  the  public  consultation  and 
NCAs  therefore  indicated  that  the  relevant  case  law  should  be  included  in  the  Vertical 
Guidelines in order to increase legal certainty. A detailed assessment of this issue can be 
found  in  the  following  sections  dealing  with  the  different  restrictions  covered  by 
Article 4 of the VBER. 

Stakeholders also pointed to a lack of clarity as regards the distinction and relationship 
between the concepts of hardcore restriction and by object restriction. Some respondents 
to the public consultation consider both concepts as interchangeable, whereas others see 
them  as  concepts  with  different  meanings.  NCAs  pointed  out  that  the  VBER  does  not 
contain a clear distinction between both concepts and that also the Vertical Guidelines do 
not provide more clarity in this regard. 

Third, the evaluation pointed to a lack of guidance on the specific legal and economic 
circumstances under which  hardcore restrictions could be considered as satisfying 
the conditions of Article 101(3) of the Treaty. Respondents to the public consultation 
argued that businesses have so far never relied on such an efficiency defence since they 
preferred not to run any legal risk. A detailed assessment of this issue can be found in the 
following  sections  dealing  with  the  different  restrictions  covered  by  Article 4  of  the 
VBER.  

Fourth, the evaluation has resulted in mixed evidence as regards the scope of the list of 
hardcore restrictions set out in Article 4 of the VBER and notably the existence of 
false positives and false negatives.  

As  regards  possible  false  positives,  the  majority  of  the  respondents  to  the  public 
consultation  indicated  that  the  list  of  hardcore  restrictions  is  not  missing  any  vertical 
restriction  that  should  be  considered  as  generally  harmful  since  it  does  not  entail  any 

166 

 
 
 
 
 
clear efficiency gains and that should therefore be excluded from the benefit of the block 
exemption.  

However,  a  significant  part  of  the  respondents  indicated  that  there  are  certain  vertical 
restrictions that can be considered to amount to severe restrictions of competition but are 
not  included  in  the  list  of  hardcore  restrictions  in  Article  4  of  the  VBER  (e.g.  certain 
price  parity  clauses).  Also  NCAs  raised  the  question  whether  to  expand  the  list  of 
hardcore  restrictions  to  include  vertical  restrictions  that  have  proven  harmful  to 
competition in the context of investigations in several Member States (e.g. certain online 
sales restrictions and price parity clauses).  

As  regards  possible  false  negatives,  the  majority  of  the  respondents  to  the  public 
consultation  indicated  that  the  list  of  hardcore  restrictions  contains  vertical  restrictions 
that  could  create  efficiencies  and  that  should  therefore  not  be  qualified  as  hardcore 
restrictions.  A  significant  number  of  respondents,  however,  argued  the  contrary.  Both 
views were reiterated in the context of the stakeholder workshop, especially with regard 
to specific hardcore restrictions such as resale price maintenance.  

NCAs  considered  that  the  hardcore  list  does  not  capture  any  vertical  restrictions  that 
could create efficiencies that would be sufficiently likely to outweigh the resulting anti-
competitive effects. 

A detailed assessment of this issue can be found in the following sections dealing with 
the restrictions for which it was suggested during the evaluation that they should either 
be excluded from  the list  of hardcore  restrictions or included in  addition  to  the already 
existing ones. 

4.5. THE CONCEPT OF EXCLUDED RESTRICTIONS 

Article 5 of the VBER contains a closed list of vertical restrictions that are excluded from 
the benefit of the block exemption even though the parties to the vertical agreement do 
not exceed the market share thresholds set out in the VBER.179 Unlike for Article 4 of the 
VBER  which,  as  explained  in  section  4.4  above,  excludes  the  entire  agreement 
containing  a  hardcore  restriction  from  the  benefit  of  the  block  exemption,  if  a  vertical 
agreement contains one of the excluded restrictions listed in Article 5 of the VBER, the 
remainder  of  the  agreement  continues  to  benefit  from  the  block  exemption  if  it  is 
severable  from  the  excluded  restriction.180 Paragraphs  65-69  of  the  Vertical  Guidelines 

179  See VBER, recital 11, and Vertical Guidelines, paragraph 65.  
180  See Vertical Guidelines, paragraph 65. 

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provide further guidance on the interpretation of the list of excluded restrictions set out in 
Article 5 of the VBER.  

The evaluation has shown that a large majority of stakeholders and NCAs consider the 
concept of excluded restriction to be sufficiently clear.  

However, some respondents to the public consultation and some NCAs pointed out that 
the framework to be applied for the analysis of excluded restrictions lacks clarity. In 
particular,  neither  the  VBER  nor  the  Vertical  Guidelines  indicate  whether  excluded 
restrictions should always be analysed as restrictions by effect or whether, depending on 
the circumstances (e.g. the market shares of the parties to the agreement), they can also 
qualify as restrictions by object. 

4.6. SPECIFIC VERTICAL RESTRICTIONS 

This  section  sets  out  the  evidence  collected  during  the  evaluation  on  specific  vertical 
restrictions, namely (i) resale price maintenance (see section 4.6.1 below), (ii) territorial 
and customer  restrictions  (see section 4.6.2 below), (iii) most favoured nation or parity 
clauses  (see  section  4.6.3  below)  and  (iv)  non-compete  obligations  (see  section  4.6.4 
below).  It  also  presents  the  evidence  gathered  on  restrictions  linked  to  specific 
distribution  systems  or  channels  such  as  (v)  exclusive  distribution  (see  section  4.6.5 
below), (vi) selective distribution (see section 4.6.6 below), (vii) online sales (see section 
4.6.7 below) and (viii) franchising (see section 4.6.8 below). It also mentions (ix) other 
issues raised by stakeholders during the evaluation (see section 4.6.9 below). 

4.6.1.  Resale price maintenance   

Minimum and fixed resale prices are considered a severe restriction of competition181 and 
therefore  qualified  as  hardcore  restrictions  pursuant  to  Article  4  of  the  VBER.  More 
specifically, Article 4(a) of the VBER provides that vertical agreements having as their 
object  the  restriction  of  the  buyer’s  ability  to  determine  its  sales  price  (so-called  resale 
price  maintenance  or  "RPM")  are  excluded  from  the  benefit  of  the  block  exemption 
irrespective of the market share of the parties to the agreement. Article 4(a) of the VBER 
clarifies  that  the  supplier  is  however  allowed  to  impose  a  maximum  or  recommended 
sales price, provided that it does not amount to a fixed or minimum sales price as a result 
of pressure from or incentives offered by any of the parties to the agreement. Paragraphs 
48-49 and 223-229 of the Vertical Guidelines provide further guidance on the application 

181  See e.g. VBER, recital 10. 

168 

 
 
 
 
 
                                                           
of this provision, including the likely anti-competitive and possible efficiency-enhancing 
effects of RPM. 

The  evaluation  indicated  that  the  majority  of  respondents  to  the  public  consultation 
consider  that  Article  4(a)  of  the  VBER  and  the  related  paragraphs  of  the  Vertical 
Guidelines  generally  provide  an  appropriate  level  of  legal  certainty.  However,  a 
significant  number  of  respondents  to  the  public  consultation  pointed  to  a  slightly  low 
level  of  legal  certainty, whereas  only a minority  considered there to  be a low level  of 
legal certainty.  

The  evaluation  identified  the  following  main  issues  regarding  the  application  of 
Article 4(a) of the VBER: 

First, respondents to the public consultation argued that there is limited guidance on the 
circumstances  under  which  recommended  or  maximum  resale  prices  could  amount  to 
RPM and thus to a hardcore restriction under the VBER, which reduces the level of legal 
certainty  provided  by  the  VBER.  By  way  of  example,  they  pointed  to  the  e-commerce 
sector  inquiry  which  indicated  that  the  monitoring  of  retail  prices  (e.g.  with  the  use  of 
price  algorithms)  might  limit  the  incentives  of  distributors  to  deviate  from  the 
recommended  prices.  Respondents  to  the  public  consultation  therefore  perceived  a  risk 
that the Commission and NCAs might conclude that recommended prices accompanied 
by a monitoring mechanism could amount to RPM in the meaning of Article 4(a) of the 
VBER. They considered this to be unjustified in view of the fact that the monitoring of 
retail prices is part of the normal commercial activity of a supplier and should therefore 
be  legal,  unless  retaliatory  measures  or  threats  of  such  measures  are  used  to  achieve 
compliance with the recommended price level. 

Participants in the stakeholder workshop, NCAs and the evidence gathered in the context 
of the evaluation study also indicated that more guidance is needed to address the lack of 
clarity as regard the circumstances in which recommended resale prices amount to RPM. 
Participants in the stakeholder workshop pointed to a similar lack of clarity in relation to 
maximum resale prices and when those amount to RPM. 

NCAs also pointed to difficulties with applying the VBER to atypical price restrictions. 
In particular, Article 4(a) of the VBER  and paragraph 48 of the Vertical  Guidelines do 
not specify whether certain practices that restrict the ability of buyers to determine their 
resale  price  should  be  considered  RPM.  This  includes  practices  prohibiting  discounts 
applied  by  retailers,  or  practices  compelling  retailers  to  apply  a  price  within  a  specific 
range defined by the supplier.  In addition,  they  argued that the VBER  and the Vertical 
Guidelines  do  not  reflect  the  distinction  between  clear-cut  RPM  and  hub-and-spoke 
scenarios.  

169 

 
 
 
 
 
Second, the respondents to the public consultation and the participants in the stakeholder 
workshop  argued  that  there  is  a  lack  of  clarity  as  regards  the  conditions  under  which 
RPM can benefit from the exemption of Article 101(3) of the Treaty. They pointed out 
that  as  a  result,  businesses  prefer  not  to  run  the  financial  and  reputational  risk  of 
including hardcore restrictions in their vertical agreements, which makes RPM de facto a 
per se infringement of the competition rules. 

More specifically, the respondents to the public consultation pointed to a lack of clarity 
in paragraphs 223-229 of the Vertical Guidelines in relation to the circumstances under 
which efficiencies resulting from RPM in the context of product launches and short-term 
price campaigns are accepted. As regards the introduction of a new product, they argued 
that  there  is  uncertainty  about  (i)  the  acceptable  duration  of  the  introductory  period, 
(ii) the types of products that can be covered by  this exemption  (e.g. only  entirely new 
products or also new generations of existing products) and (iii) the supporting evidence 
that  businesses  need  to  provide  to  prove  the  resulting  efficiencies.182 As  regards  short-
term low price campaigns, they pointed to uncertainties about (i) the type of distribution 
systems covered by this exemption (i.e. only franchise systems or also other distribution 
system)  and  (ii)  the  evidence  that  businesses  need  to  provide  to  prove  the  resulting 
efficiencies.183 

The respondents to the public consultation also pointed out that there is no guidance on 
the evidence to be provided by businesses to prove non-price efficiencies resulting from 
RPM and how these can be weighed against the restrictive effects stemming from RPM.  

Third, the respondents to the public consultation argued that there is a lack of coherence 
in the treatment of RPM across the EU since NCAs seem to pursue divergent approaches 
in  this  regard.  They  pointed  out  that  a  possible  reason  for  this  could  be  the  lack  of 
guidance on relevant issues in the VBER itself.  

The review of the numerous NCA cases regarding RPM in the context of the evaluation 
study  confirmed  this  perception  only  partly.  In  fact,  the  evaluation  study  found  that 
NCAs did not face major difficulties in the legal assessment of RPM as the underlying 
criteria are relatively straightforward. That said, NCAs seemed to have taken somewhat 

182  See paragraph 225 of the Vertical Guidelines: "RPM may be helpful during the introductory period of 
expanding  demand  to  induce  distributors  to  better  take  into  account  the  manufacturer’s  interest  to 
promote the product." 

183  See  paragraph  225  of  the  Vertical  Guidelines:  "Similarly,  fixed  retail  prices,  and  not  just  maximum 
retail prices, may be necessary to organise in a franchise system or similar distribution system applying 
a uniform distribution format a coordinated short term low price campaign (2 to 6 weeks), which will 
also benefit the consumers." 

170 

 
 
 
 
 
                                                           
divergent  approaches  with  regard  to  novel  implementations  of  RPM,  for  which  the 
current rules do not contain any guidance.  

Fourth, the evaluation resulted in mixed evidence regarding the classification of RPM as 
a hardcore restriction under the VBER, which is presented separately for each source of 
evidence  (i.e.  stakeholder  feedback,  enforcement  practice  and  evaluation  study)  in  the 
following. 

Stakeholder feedback 

The  majority  of  the  respondents  to  the  public  consultation  (mainly  distributors  and 
retailers)  agreed  with  the  classification  of  RPM  as  a  hardcore  restriction  under  the 
VBER,  while  a  significant  number  of  respondents  (mainly  suppliers)  contested  this 
classification. This divergence of views was also reflected among the participants in the 
stakeholder workshop. 

More  specifically,  retailers  argued  that  RPM  only  has  the  effect  of  increasing  prices 
without generating any non-price benefits for consumers. Furthermore, they argued that 
RPM tends to limit online sales where the variety of products is larger, with the effect of 
diminishing  the  overall  availability  of  products  for  consumers.  Moreover,  they  pointed 
out  that  there  are  less  restrictive  means  to  improve  the  services  offered  by  distributors 
and retailers, including special compensation mechanisms for the underlying costs.  

In  contrast,  suppliers  argued  that  RPM  could  allow  distributors  to  benefit  from  the 
suppliers’ knowledge about the competitive price level in a particular market, as well as 
help  suppliers  counteract  the  market  power  of  large  retailers  and  online  platforms  and 
position new products in existing markets or existing products in new geographical areas. 
Furthermore,  suppliers  also  argued  that  RPM  is  an  effective  tool  to  address  free-riding 
concerns  because  it  enables  suppliers  to  support  reputable  intermediaries  against  price 
discounters  that  free-ride  on  the  investments  of  other  retailers,  thus  causing  a  negative 
impact on the image of the suppliers’ brand. 

Some respondents  to the public consultation  also  argued that, in the  absence of  market 
power,  RPM  can  generate  substantial  efficiencies,  without  creating  anti-competitive 
effects.184 This  is  because  the  restriction  of  intra-brand  competition  on  prices  resulting 

184  See  e.g.  Bishop  and  Walker,  The  Economics  of  EC  Competition  Law:  Concepts,  Application  and 
Measurement,  2nd  edition  2010,  pages  202-204;  and  Goyder,  "Is  Nothing  Sacred?  Resale  Price 
Maintenance and the EU Policy Review on Vertical Restraints" in: Kronkurrensverket (ed.), The Pros 
and Cons of Vertical Restraints, 2008, pages 167-193. 

171 

 
 
 
 
 
                                                           
from  the  imposition  of  RPM  does  not  have  appreciable  anti-competitive  effects  to  the 
extent that there is sufficient inter-brand competition.  

Some  respondents  to  the  public  consultation  further  pointed  out  that  other  jurisdictions 
(e.g. Australia and the USA) have taken a more lenient approach to RPM.185 Moreover, 
some  Member  States  allowed  RPM  for  certain  products  like  books,  magazines  and 
newspapers, with the objective of increasing availability and diversity. 

Enforcement practice at national and EU level 

The majority of vertical cases pursued at national level since the adoption of the VBER 
concerned RPM. The highest number of cases was reported by the Austrian NCA, with 
the underlying legal assessment in all these cases being very similar. In all instances, the 
Austrian  NCA  and  the  Cartel  Court  concluded  that  the  disputed  vertical  restrictions 
constituted  a  violation  of  Article  101(1)  of  the  Treaty,  which  could  not  be  exempted 
pursuant to Article 101(3) of the Treaty. Similarly, the Cypriot, Czech, Danish, German, 
Polish  and  UK  NCAs  found  most  of  the  investigated  RPM  practices  to  be  prohibited 
according to Article 101 of the Treaty and the equivalent provisions of national law.  

Also the Commission pursued several cases concerning RPM during the last years. In the 
four prohibition decisions of July 2018, the Commission found that consumer electronics 
manufacturers  Pioneer,  Denon  &  Marantz,  Philips  and  Asus  had  imposed  fixed  or 
minimum resale prices on online retailers for widely used consumer electronics products 
such  as  kitchen  appliances,  notebooks  and  hi-fi  products.  The  four  manufacturers 
intervened particularly against online retailers offering their products at low prices with 
threats or sanctions such as the blocking of supplies. The investigations showed that the 
use of sophisticated monitoring tools allowed the manufacturers to effectively track the 
setting  of  resale  prices  in  their  distribution  network  and  to  intervene  swiftly  in  case  of 
price  decreases.  The  price  interventions  limited  effective  price  competition  between 
retailers and led to higher prices with an immediate effect on consumers.  

The above shows that RPM has consistently been found to amount to a severe restriction 
of  competition  in  enforcement  actions  taken  by  the  Commission  and  NCAs  since  the 
adoption of the VBER.  

 Evaluation study 

The evaluation study resulted in mixed evidence with regard to the effects of RPM.  

185  ACCC  Determination  of  5  December  2014,  Tooltechnic  Systems  (Australia)  Pty  Ltd,  A91433;  and 
Judgment of the Supreme Court of the United States of 28 June 2007, Leegin Creative Leather Prods., 
Inc. v. PSKS, Inc., 551 U.S. 877 (2007). 

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The stakeholders interviewed in the context of the evaluation study took the view that the 
application of RPM cannot produce efficiencies other than during product launches and 
promotional  campaigns. 186 One  of  the  problems  manufacturers  and  most  interviewed 
retailers raised is that consumers learn about a new product in  a brick-and-mortar store 
and  later  buy  it  online.  According  to  the  interviewees,  sometimes  the  online  price 
significantly decreases (according to some stakeholders by 30%) just a few days after the 
launch of a new product. Such "online price dumping" is a major concern for some of the 
interviewed stakeholders. This negatively affects brick-and-mortar stores and some retail 
chains have closed as a result, for example, in the toys industry where specialised shops 
offer a unique experience for children and their parents and help them familiarise with a 
manufacturer’s  brand.  Some  manufacturers  also  indicated  that  they  cannot  open  their 
own  brand  shops  everywhere  and  therefore  have  to  rely  on  brick-and-mortar  stores  to 
promote  and  sell  their  products.187 In  addition,  most  of  the  interviewees  considered  that 
RPM could drive up the prices of some products, thus negatively  impacting consumers, 
with the resulting profits not necessarily being invested in product innovation and better 
customer experience.188  

The  economic  literature  reviewed  in  the  context  of  the  evaluation  study  points  to  both 
pro-competitive  and  anti-competitive  effects  of  RPM.  While  the  former  can  be 
categorised  as  efficiency  gains  resulting  from  the  adequate  provision  of  retail  services 
that can affect the demand for the manufacturer’s products, the latter concern collusion 
and  rent  extraction  that  RPM  may  facilitate.  Only  a  relatively  thinner  strand  of  the 
literature looks in addition at the effects of RPM empirically based on NCA interventions 
or changes in the policy approach, either over time or across regions. Moreover, a large 
part of these studies is not particularly recent and therefore only of limited value for an 
assessment of RPM in the current market circumstances.189  

The econometric analysis conducted in the context of the evaluation study focused on the 
book  sector  in  various  Member  States  where  fixed  book  price  rules  exist,  which  allow 
publishers to require book sellers not to sell books below the price set by the publisher.190 
The  results  of  the  econometric  study  suggest  that  in  the  book  sector,  RPM  agreements 
seem  to  be  associated  with  higher  output  and  (weakly)  lower  prices.  As  a  result, 
consumer  welfare  would  seem  to  have  been  higher  in  the  presence  of  these  RPM 

186  See section 4.1.3.4 of the evaluation study. 
187  See section 3.3.1.2 of the evaluation study. 
188  See section 4.1.3.4 of the evaluation study. 
189  See section Annex XI.I.2.6 of the evaluation study. 
190  See section Annex X.I.2 of the evaluation study. 

173 

 
 
 
 
 
                                                           
agreements. It should, however, be noted that the book sector has some unique features, 
such  as  the  cultural  importance  attached  to  it,  which  is  the  primary  reason  for  the 
promotion  of  fixed  book  price  agreements  in  the  Member  States  concerned.  Therefore, 
the results of the econometric analysis for this sector have to be interpreted with caution 
and  cannot  be  easily  transposed  to  other  sectors.  At  the  same  time,  these  results 
demonstrate that RPM agreements do have the potential to increase consumer welfare in 
certain circumstances. 

Finally,  some  respondents  to  the  public  consultation  pointed  to  two  specific  scenarios 
that should be differentiated since they do not constitute typical scenarios of RPM: 

As regards franchise systems, some respondents to the public consultation, notably those 
representing franchisors, argued that fixing retail prices is justified and necessary in order 
to  maintain  the  common  identity  and  reputation  of  a  particular  franchise  network  and 
thus  meets  the  conditions  of  Article  101(3)  of  the  Treaty.  In  franchise  agreements,  the 
franchisor shares with its franchisees a complete business concept, which also implies the 
need for a clear price positioning of the franchisor’s brand and the design of homogenous 
advertising  campaigns  in  order  to  avoid  consumer  deception  due  to  different  prices  at 
franchisee  level.  Moreover,  since  franchisees  normally  do  not  distribute  products  from 
competing franchisors, such a restriction would not result in a softening  of competition 
between  different  suppliers  using  the  same  distributors.  However,  other  respondents, 
notably  those  representing  franchisees,  argued  that  fixing  retail  prices  is  not  always 
justified and should only be allowed for short periods and when necessary to effectively 
sell and market new products.  

As  regards  tripartite  relationships  where  a  supplier  negotiates  prices  directly  with 
retailers  or  final  customers  and  relies  on  intermediaries  to  execute  the  agreement  (also 
called  "fulfilment  contracts",  see  section  4.1.3  above),  respondents  to  the  public 
consultation  argued  that  the  adherence  of  the  intermediary  to  the  price  negotiated 
between the supplier and the retailer or final customer does not constitute RPM since that 
price is no longer subject to competition once the agreement has been concluded. Such 
agreements should therefore be excluded from the scope of Article 101(1) of the Treaty. 
In the alternative, if such scenarios were to be considered a restriction of competition in 
the  meaning  of  Article  101(1)  of  the  Treaty,  they  should  be  exempted  under  Article 
101(3)  of  the  Treaty.  This  is  because  they  result  in  efficiencies  in  the  form  of  reduced 
transaction  costs,  without  there  being  any  risk  of  anti-competitive  effects,  as  the 
intermediary would not have been able to achieve a better price from the retailer or final 
customer to whom the product or service is delivered. In fact, the respondents explained 
that  such  arrangements  are  often  requested  by  the  retailer  or  final  customer,  but  could 
also  be  in  the  interest  of  the  supplier.  The  latter  would  e.g.  be  the  case  where  a  non-
European  supplier  wishes  to  negotiate  prices  directly  with  final  customers,  but  needs  a 

174 

 
 
 
 
 
local  trader  in  Europe  that  offers  logistics  support  and  other  sales  assistance,  such  as 
support  for  dealing  with  customers  in  their  local  language  and  addressing  cultural 
differences.  

4.6.2.  Territorial and customer restrictions  

territorial 

types  of 

restrictions  are  considered  severe 

Certain 
restrictions  of 
competition,191 which are therefore qualified as hardcore restrictions pursuant to Article 4 
of  the  VBER.  More  specifically,  Article  4(b)  of  the  VBER  provides  that  vertical 
agreements  that  have  as  their  object  the  restriction  of  the  territory  into  which  or  of  the 
customers  to  whom  the  buyer  or  the  buyer's  customers  may  sell  the  contract  goods  or 
services are excluded from the benefit of the block exemption irrespective of the market 
share  of  the  parties  to  the  agreement.  Paragraph  50  of  the  Vertical  Guidelines  explains 
that  this  provision  aims  at  preventing  market  partitioning  by  territory  or  by  customer 
group. It also provides examples of direct and indirect measures qualifying as territorial 
or customer restriction pursuant to Article 4(b) of the VBER. 

The general  rule laid down in  Article 4(b) of the VBER  contains one exception, which 
applies irrespective of the type of distribution used. This allows the supplier to restrict the 
buyer’s place of establishment (so-called "location clause"). This means that the benefit 
of the VBER is not lost if it is agreed that the buyer will restrict its distribution outlet(s) 
and warehouse(s) to a particular address, place or territory.192 

The  general  rule  laid  down  in  Article  4(b)  of  the  VBER  also  includes  four  specific 
exceptions. Article 4(b)(i) of the VBER allows the restriction of active sales by a buyer 
into  a  territory  or  to  a  customer  group  which  the  supplier  has  allocated  exclusively  to 
another  buyer  or  has  reserved  to  itself.  Active  sales  means  active  approaching  of 
customers,  as  set  out  in  paragraph  51  of  the  Vertical  Guidelines.  This  protection  of 
exclusively allocated territories or customer groups must, however, permit passive sales, 
which refers to responding to unsolicited requests from individual customers, as set out 
in paragraph 51 of the Vertical Guidelines. By contrast, the other three exceptions allow 
for the restriction of both active and passive sales. Article 4(b)(ii) of the VBER allows a 
supplier to restrict a wholesaler from selling to end users in order to keep the wholesale 
and  retail  levels  of  trade  separate.  Article  4(b)(iii)  of  the  VBER  allows  a  supplier  to 
restrict  sales  by  members  of  its  selective  distribution  system,  at  any  level  of  trade,  to 
unauthorised distributors located in the territory where the selective distribution system is 
operated or where the supplier does not yet sell the contract products. Article 4(b)(iv) of 

191  VBER, recital 10. 
192  Vertical Guidelines, paragraph 50. 

175 

 
 
 
 
 
                                                           
the VBER allows a supplier to restrict a buyer of components or any intermediate goods, 
to whom those components are supplied for the purpose of incorporation (i.e. for use as 
an input to produce other goods), from reselling them to competitors of the supplier.  

The  evidence  gathered  during  the  evaluation  indicates  that  a  majority  of  stakeholders 
consider  that  Article  4(b)  of  the  VBER  and  the  related  provisions  of  the  Vertical 
Guidelines  provide an appropriate level  of legal certainty. This corresponds notably 
to  the  view  of  the  majority  of  respondents  to  the  public  consultation.  However,  a 
significant number of stakeholders, including the respondents to the public consultation 
(across  all  categories  represented)  and  some  NCAs,  indicated  a  lower  level  of  legal 
certainty for these rules and raised certain issues in this regard. 

As a general comment, a few respondents to the public consultation pointed to a lack of 
clarity of the structure, as well as the wording of Article 4(b) of the VBER and the 
corresponding paragraphs of the Vertical Guidelines. According to them, the frequent 
use  of  double  or  triple  negations  in  the  exceptions,  the  conceptual  complexity  of  the 
restrictions  and  the  complicated  description  impair  the  understanding  of  this  provision 
and  lead  to  diverging  interpretations  by  businesses  and  NCAs.  Moreover,  some 
stakeholders consider that the VBER and the Vertical Guidelines do not provide enough 
details  and  examples  to  determine  which  restrictions  should  be  considered  as  hardcore 
within the meaning of Article 4(b) of the VBER and which restrictions are permitted. In 
the  same  vein,  respondents  expressed  a  need  to  better  define  when  a  restriction  on  the 
place of establishment would be acceptable under this provision. 

Stakeholders also made more specific comments on the hardcore restriction (see section 
4.6.2.1 below) and the exceptions (see section 4.6.2.2 below) laid down in Article 4(b) of 
the VBER.  

4.6.2.1.  Hardcore restriction on the territory into which or the customers 

to whom a buyer can sell (Article 4(b) of the VBER) 

Regarding  the  hardcore  restriction  on  the  customers  to  whom  a  buyer  can  sell, 
stakeholders  point  to  an  inconsistency  in  the  different  language  versions  of  the  VBER, 
the  vagueness  of  the  notion  of  customer  and  the  lack  of  case  law  justifying  its 
qualification as a hardcore restriction.  

First,  a  few  respondents  to  the  public  consultation  (mostly  lawyers  and  business 
associations) mentioned a lack of consistency between the different language versions of 
the VBER. Whereas the English version refers alternatively to "customers" or "customer 
group",  other  versions  (notably  the  German  version)  refer  to  "customer  group".  They 
explained that this can lead to different interpretations and generate difficulties with the 
application of this provision.  

176 

 
 
 
 
 
Second, a few respondents to the public consultation (business associations, lawyers and 
companies)  expressed  concerns  about  the  lack  of  a  proper  definition  of  the  concept  of 
customers and its scope in the context of Article 4(b) of the VBER. In particular, some 
respondents  indicated  that  it  is  unclear  whether  customers  purchasing  on  a  specific 
marketplace could be defined as a separate customer group. If this were to be the case, 
allowing only a single or a limited number of authorised resellers to sell on a particular 
marketplace  for  a  particular  territory  (e.g.  a  Member  State)  could  conceivably  be 
considered  as  a  territorial  restriction  within  the  meaning  of  Article  4(b)  of  the  VBER. 
This would however lead to unsatisfactory results as it fails to take account of the need 
for businesses to be able to control the use of this channel to protect their brand image. 
Other respondents  understand that a  customer  group can be defined based on objective 
characteristics, but wonder whether it is permitted for a supplier to define the boundaries 
between  certain  customer  groups  or  even  name  customers  belonging  to  a  particular 
customer  group.  Finally,  stakeholders  argued  that  the  definition  of  the  notion  of 
customers should take account of the fact that any attempt by manufacturers to prevent 
sales via certain sales channels is prohibited.  

Third, one respondent to the public consultation considered that there is  no basis in the 
case  law  for  subjecting  customer  restrictions  to  the  same  strict  test  as  territorial 
restrictions, since only the latter relate to the single market objective.  

Regarding the hardcore restriction on the territory into which the buyer can sell, a 
few  stakeholders  stressed  the  complexity  of  the  rules,  the  difficulties  linked  to  their 
enforcement and the risk of inconsistency with the Geo-blocking Regulation.  

First,  a  few  respondents  to  the  public  consultation  (mainly  companies  and  business 
organisations  of  retailers)  pointed  to  a  lack  of  clarity  of  the  rules  on  territorial 
restrictions. According to them, the current rules do not clearly indicate which territorial 
restrictions can or  cannot  be justified under EU  and national  law. A  few NCAs concur 
with this view, pointing out that many stakeholders and notably SMEs, which are faced 
with  territorial  supply  restrictions  imposed  by  their  suppliers,  are  not  able  to  judge 
whether or not these restrictions infringe Article 101 of the Treaty.  

Second,  a  few  stakeholders  (both  respondents  to  the  public  consultation  and  NCAs) 
consider that the VBER has not been very effective in preventing territorial restrictions, 
even  though  they  are  anti-competitive  practices  which  are  inconsistent  with  the  single 
market objective. 

177 

 
 
 
 
 
Some respondents mentioned that the prohibition of territorial restrictions set out in the 
VBER  is  not  vigorously  enforced.  This  view  is  however  in  contradiction  with  several 
recent  Commission  decisions  concerning  territorial  and  customer  restrictions.  In 
Nike,193 Sanrio,194 and NBC Universal,195 the Commission confirmed that preventing the 
sale  of  licensed  merchandise  products  in  another  Member  State  or  beyond  allocated 
customers or customer groups amounts to a hardcore restriction, which cannot therefore 
benefit from the block exemption.196 In Pioneer,197 the Commission confirmed that, in an 
open  distribution  system,  restricting  the  territories  into  which  retailers  can  sell  is  a 
restriction of competition by object within the meaning of Article 101(1) of the Treaty.  

Other stakeholders  (both respondents  to  the public consultation  and NCAs) specifically 
refer to the need to address territorial supply constraints ("TSCs") in certain sectors such 
as  fast-moving  consumer  goods.  They  explain  that  TSCs  are  imposed  by  suppliers  to 
restrict  the  retailers’  ability  to  source  products  cross-border,  to  freely  move  products 
within their own distribution network or to offer products to customers that are available 
in another Member State. Suppliers implement TSCs through different practices such as 
refusing  to  supply  or  threatening  to  stop  supplying  a  particular  distributor,  limiting  the 
quantities  available  for  sale,  differentiating  product  ranges  and  prices  between  EU 
Member  States  and  limiting  language  options  for  the  product  packaging.  As  a  result, 
retailers and wholesalers are unable to benefit from the single market and negotiate better 
conditions for certain products, especially "must-have" products, in particular in the food 
and retail sector. Therefore, such TSCs are, in their view, hampering the development of 
the single market and its potential benefit to consumers, as evidenced by various surveys 
and  studies  carried  out  during  recent  years.198 The  issue  has  in  particular  been  touched 

193  See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_19_1828.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. See section 5.1.3 above.  

25  March 

available 

19/1828, 

release 

2019, 

press 

IP 

of 

194  See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_19_3950.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. See section 5.1.3 above. 

available 

19/3950, 

release 

2019, 

press 

July 

IP 

of 

9 

195  See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_157.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. See section 5.1.3 above.  

available 

January 

20/157, 

release 

2020, 

press 

30 

IP 

of 

196  Although the VBER was not directly applied in these decisions, as it was not entirely clear whether the 
agreements  would  fall  in  its  scope,  it  has  been  used  as  guidance  in  the  assessment  of  101(3)  of  the 
Treaty. 

197  See  Commission 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_18_4601.  A  non-confidential  version  of  the 
prohibition decisions is available on DG Competition's website. See section 5.1.3 above. 

available 

18/4601, 

release 

2018, 

press 

July 

24 

IP 

of 

198  See  notably  the  publication  of  the  Secretariat  General  of  the  Benelux  Union  of  22  May  2018  on 
"Territorial  supply  constraints  in  the  retail  trade  in  Belgium,  the  Netherlands  and  Luxembourg  –

178 

 
 
 
 
 
                                                           
 
upon in the Communication of the Commission on "A European retail sector fit for the 
21st  century".199 As  a  follow-up  to  this  Communication,  the  Commission  launched  in 
2019 a fact-finding into TSCs in the EU retail sector.  

Third,  NCAs  also  pointed  to  practical  difficulties  in  applying  the  prohibition  in 
individual  cases.  Some  NCAs  indicated  that  certain  territorial  restrictions  may  create 
efficiencies  that  -  if  claimed  by  the  businesses  concerned  -  need  to  be  assessed  under 
Article  101(3)  of  the  Treaty,  while  at  the  same  time  dampening  the  integration  of  the 
single market. This raises the question of how to balance any such efficiencies (e.g. more 
efficient distribution) against harm to the integration of the single market, given that the 
two effects are difficult to quantify by the same measure. Moreover, NCAs pointed out 
that certain effects of territorial restrictions such as price discrimination could be positive 
for consumers in some EU Member States, while negative in others. In these situations, 
in their view, the Commission may be better placed to investigate such conduct than the 
NCAs since it is able to take account of the EU-wide effect of such restrictions. 

Fourth,  a  few  respondents  to  the  public  consultation  (mainly  lawyers  and  business 
associations)  pointed  to  a  lack  of  consistency  with  regard  to  the  interplay  between  the 
VBER, together with the Vertical Guidelines, and the Geo-blocking Regulation.200 They 
indicated  that,  under  the  Geo-blocking  Regulation,  restrictions  of  passive  sales  on  the 
grounds of nationality, place of residence or place of establishment of the customer are 
void,  without  any  exception  or  the  possibility  of  raising  efficiency  claims,  while  such 
restrictions  can  be  exempted  under  Article  101(3)  of  the  Treaty  if  they  fulfil  the 
underlying  conditions,  or  even  fall  outside  Article  101(1)  of  the  Treaty  in  the 
circumstances  described  in  paragraph  61  of  the  Vertical  Guidelines.  In  their  view,  it  is 
not clear as to whether this implies that no exemption is possible under Article 101(3) of 
the  Treaty  for  agreements  that  fall  under  both  the  VBER  and  the  Geo-blocking 

for 

the 

internal 

Benelux 

at 
Consequences 
the 
https://www.benelux.int/files/9215/2696/9988/616-TSC-EN-draft3.pd; 
Luxembourgish  Competition  Council  of  18  January  2019  on  its  retail  sector  inquiry,  available  at 
https://concurrence.public.lu/fr/avis-enquetes/enquetes/2019/enquete-secteur-grande-distribution.html.  
199  See  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions,  "A European retail sector fit for 
the 
https://eur-
final, 
219 
lex.europa.eu/resource.html?uri=cellar:93c3b59e-43ad-11e8-a9f4-
01aa75ed71a1.0001.02/DOC_1&format=PDF.  

available 
report 

market", 
and 

COM(2018) 

century", 

available 

21st 

the 

of 

at 

200  On the Geo-blocking Regulation, see section 5.2.4 above.  

179 

 
 
 
 
 
                                                                                                                                                                            
 
Regulation, whereas an exemption under Article 101(3) of the Treaty is still possible for 
agreements that do not fall under the Geo-blocking Regulation.  

4.6.2.2.  Exceptions to the prohibition of territorial and customer 

restrictions (Article 4(b)(i)-(iv) of the VBER) 

As  a  general  remark,  stakeholders  indicated  that  neither  the  VBER  nor  the  Vertical 
Guidelines  specify  whether  the  exceptions  in  Article  4(b)(i)-(iv)  of  the  VBER  may  be 
applied jointly, so that an agreement including several of these restrictions would still be 
covered by the VBER. 

Stakeholders raised a number of issues with regard to the first and third exception set 
out  in  Article  4(b)(i)  and  4(b)(iii)  of  the  VBER concerning restrictions that suppliers 
operating an exclusive or a selective distribution system can impose on their distributors 
in  order  to  limit  their  ability  to  sell  in  certain  territories  or  to  certain  customers.  These 
issues  will  be  dealt  with  in  section  4.6.5  below  and  section  4.6.6  below  covering, 
respectively, exclusive distribution and selective distribution. 

Only  a  few  stakeholders  commented  on  the  second  exception  laid  down  in  Article 
4(b)(ii)  of  the  VBER.  Some  stakeholders  questioned  whether  the  provision  allows 
restrictions on the wholesaler’s activity at retail level, including the restriction of online 
sales. Other stakeholders expressed a need for clarification as regards the meaning of the 
expression  "certain  end  users"  and  "bigger  end  users"  in  paragraph  55  of  the  Vertical 
Guidelines. Some stakeholders also expressed the view that it is unjustified not to exempt 
the restriction of the retailer’s activity at wholesale level.  

Also  the  fourth  exception  contained  in  Article  4(b)(iv)  of  the  VBER  attracted  very 
few comments. Some respondents to the public consultation raised the question as to why 
the provisions in relation to spare parts are scattered across the VBER. Others questioned 
the  relevance  of  preventing  the  sales  of  components  to  the  supplier’s  competitors  in 
certain circumstances and sectors.  

4.6.3.  Parity clauses 

Parity  clauses,  which  are  block  exempted  under  the  VBER,  can  be  found  in  different 
variations. More generally, they can be agreed at wholesale or retail level, they can affect 
prices  but  also  non-price  conditions  and  they  can  be  wide  (i.e.  requiring  the  contract 
party to offer the same or better prices and conditions as those offered on any other sales 
channel)  or  narrow  (i.e.  imposing  restrictions  only  on  the  contract  party’s  direct  sales 
channel). Outside the safe harbour created by the VBER, parity clauses may require an 

180 

 
 
 
 
 
effects analysis in many cases, as shown by the enforcement practice of NCAs.201 Neither 
the  VBER  nor  the  Vertical  Guidelines  explicitly  address  parity  clauses,  but  they  are 
mentioned  in  the  Vertical  Guidelines  as  a  potential  means  of  reducing  the  buyer’s 
incentive to lower the resale price, which can make RPM more effective.202 

The  evaluation  has  shown  that  retail  parity  clauses  have  become  more  common  over 
time, and that the VBER and the Vertical Guidelines do not provide sufficient guidance 
on how to assess their compatibility with Article 101 of the Treaty. It has also shown a 
divergent treatment of these restrictions by NCAs. 

First, the evaluation has shown that the use of retail parity clauses has increased over 
the last ten years. 

Some respondents to the public consultation, notably law firms, confirmed this finding, 
reporting that these types of restrictions have become rather common in an e-commerce 
environment. 

The  evaluation  study  found  that  retail  parity  clauses  are  often  applied  not  only  in  the 
hospitality sector, but also for mass market goods which do not have features of luxury 
products. 

In line with a more common use of retail parity clauses, the evaluation study identified 
several decisions by NCAs involving these clauses, notably in contracts between online 
travel agencies and hotels. Moreover, several Member States (France, Italy, Austria and 
Belgium)  adopted  legislation  during  the  last  years  which  prohibits  the  use  of  these 
clauses by online travel agencies in the hotel sector. 

201  See  for  instance,  the  decisions  of  the  FR,  DE,  IT  and  SE  NCA  in  the  hotel  booking  sector 

(https://www.autoritedelaconcurrence.fr/en/communiques-de-presse/21-april-2015-online-hotel-
booking-sector, 
https://www.bundeskartellamt.de/SharedDocs/Entscheidung/EN/Fallberichte/Kartellverbot/2016/B9-
121-13.pdf?__blob=publicationFile&v=2, 
https://www.bundeskartellamt.de/SharedDocs/Entscheidung/EN/Fallberichte/Kartellverbot/2014/B9-
66-10.pdf?__blob=publicationFile&v=3, 
https://www.agcm.it/dotcmsCustom/getDominoAttach?urlStr=192.168.14.10:8080/41256297003874B
D/0/660EE2E99780F7B5C1257E350039D1CD/$File/p25422.pdf, 
https://www.agcm.it/dotcmsCustom/getDominoAttach?urlStr=192.168.14.10:8080/41256297003874B
D/0/4AC063DE04DC3DB1C1257F92003FE656/$File/p25940.pdf, 
http://www.konkurrensverket.se/en/news/commitments-given-by-booking-com-benefit-consumers/  and 
http://www.konkurrensverket.se/en/news/investigation-of-the-online-travel-agency-expedia-closed/). 

202  Vertical Guidelines, paragraph 48. 

181 

 
 
 
 
 
                                                           
Second,  the  evaluation  has  shown  that  the  VBER  and  the  Vertical  Guidelines  are 
perceveid as not providing sufficient guidance on how to assess the compatibility of 
retail parity clauses with Article 101 of the Treaty. 

Respondents to the public consultation pointed to a lack of guidance on the assessment of 
retail  parity  clauses  in  both  the  VBER  and  the  Vertical  Guidelines.  In  this  regard,  the 
respondents to the public consultation expressed divergent views on the possible effects 
of such clauses on competition. Some respondents to the public consultation argued that 
these  restrictions  are  not  likely  to  create  efficiencies  and  rather  have  likely  anti-
competitive effects, as their economic effects are largely identical to those of resale price 
maintenance,  which  is  considered  a  hardcore  restriction  under  the  VBER.  In  contrast, 
other respondents to the public consultation pointed to economic literature and evidence 
suggesting  that  retail  parity  clauses  can  bring  benefits  to  consumers  by  increasing 
investments through the reduction of free-riding and by reducing search and negotiation 
costs.  Some  respondents  mentioned  that  retail  parity  clauses  can,  however,  harm 
consumer  welfare  and  thus  merit  a  stricter  treatment  when  suppliers  have  insufficient 
incentives  to  offer different  conditions  to  different  intermediaries. This  is,  for example, 
the case where intermediaries are few and powerful - if not unavoidable - sales channels. 
They  argued  that  these  considerations  are  properly  reflected  in  the  current  practice  of 
treating these clauses as restrictions by effect, which require a case-by-case assessment, 
and  that  this  should  be  reflected  in  the  Vertical  Guidelines  to  provide  a  coherent 
framework of analysis under Article 101 of the Treaty.  

NCAs also took the view that there is a lack of guidance on the treatment of retail parity 
clauses, which may explain the divergent approaches in different Member States. NCAs 
argued  that  based  on  their  experience,  narrow  retail  parity  clauses  are  generally  more 
likely to be justified than wide retail parity clauses. However, also for narrow retail parity 
clauses particular attention should be paid  to  the market circumstances  and notably  the 
market  power  of  the  intermediaries  (e.g.  platforms)  involved,  as  well  as  to  any 
cumulative  effects  that  may  occur  if  those  intermediaries  are  used  by  a  large  share  of 
suppliers and/or distributors. In a recent case, the German NCA considered that in such 
specific  circumstances  narrow  retail  parity  clauses  could  have  similar  effects  to  wide 
retail parity clauses.  

The evaluation study confirmed the need for guidance in relation to retail parity clauses. 
Moreover, the evidence collected by means of two econometric studies, a survey and the 
review  of  existing  literature  pointed  to  mixed  evidence  as  regards  the  effects  of  retail 
parity  clauses,  depending  on  the  nature  of  the  clause  in  question  and  the  market 
circumstances. 

182 

 
 
 
 
 
Two  separate  econometric  analyses  were  developed  in  the  hotel  booking  sector.  One 
analysis  relied  on  publicly  available  data  at  country  level,  whereas  the  other  analysis 
drew  on  a  proprietary  database  of  hotel-level  price  data.  Both  econometric  analyses 
focused on the switch from a policy context in which narrow parity clauses were allowed 
to one where no  form  of parity  clauses was  allowed. The findings of both  econometric 
analyses  suggested  that  narrow  parity  clauses  limited  competition  in  the  hotel  booking 
sector and resulted in higher prices for consumers. Given that no statistically significant 
effect  on  the  demand  was  identified,  a  ban  on  narrow  parity  clauses  in  the  observed 
countries and sector appeared to have increased consumer welfare.203 

The  survey  collected  evidence  on  the  motivation  to  use  parity  clauses  in  mainly  two 
sectors, the mass market sector and the hospitality sector.  

In  the  mass  market  sector,  it  emerged  that  parity  clauses  are  requested  by  retailers  to 
avoid  continuous  price  negotiations  with  manufacturers  and  to  maintain  a  competitive 
price for the products concerned. According to the experience of a large retailer active in 
several Member States, parity clauses in this segment tend to cover both price and non-
price  clauses.  Most  SMEs  (both  suppliers  and  retailers)  see  parity  clauses  as  a  way  to 
reduce frequent negotiations on terms or prices, but also as a means of giving preferential 
treatment  to  their  business  partners  and  ensure  their  loyalty.  From  the  perspective  of 
retailers,  parity  clauses  are  mainly  used  to  avoid  that  customers  visit  their  brick-and-
mortar stores and then finalise the purchase online.204 

In the hospitality sector, the survey captured mainly the point of view of hotels and hotel 
chains and only to a very limited extent the point of view of booking platforms. It thus 
offers  only  a  partial  view  of  the  use  and  effects  of  parity  clauses.  The  major  concern 
reported by hotels is that this sector is characterised by the presence of a few powerful 
online platforms (OTAs). Many of them also pointed to negative effects of parity clauses, 
including narrow parity clauses, for consumers.205  

The  review  of  the  economic  literature  pointed  to  both  pro-competitive  and  anti-
competitive rationales for the use of parity clauses. Concerning pro-competitive effects, 
the economic literature shows that parity clauses can be necessary to sustain the business 
model  of  platforms  and  can,  as  such,  increase  welfare  for  consumers  to  the  extent  that 
platforms  do,  too.  The  literature  thus  recognises  that  in  certain  circumstances  the 
existence of platforms in the markets can have a positive effect on consumers. They can 

203  See section 3.4.4 of the evaluation study. 
204  See section 3.4.2.2.1 of the evaluation study. 
205  See section 3.4.2.2.1 of the evaluation study. 

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improve the flow of information by aggregating the relevant data of suppliers and making 
such information available to consumers, thereby reducing search costs. They can reduce 
switching costs by empowering consumers, bring security to online transactions, promote 
innovation, enable the platforms to protect any investments that they may have made to 
provide pre-purchase services to consumers such as reviews or advice and, finally, help 
suppliers  to  enter  or  expand  in  the  market  by  reducing  advertising  costs.  Conversely, 
regarding anti-competitive effects, the economic literature shows that parity clauses can 
soften  competition  between  retailers  or  platforms,  impede  innovation,  entry  of  new 
suppliers  and  expansion  of  small  suppliers  and  facilitate  collusion  between  retailers  or 
platforms to the detriment of consumers.206 

Third, the evaluation showed a divergent treatment of retail parity clauses by NCAs. 

Respondents  to  the  public  consultation  expressed  the  view  that  NCAs  have  followed 
divergent  approaches,  notably in  their cases in  the hotel booking sector.  This  concerns, 
on  the  one  hand,  the  German  NCA  and,  on  the  other  hand,  the  French,  Italian  and 
Swedish NCAs. 

The  evaluation  study  confirmed  the  divergent  approaches  by  NCAs  in  relation  to  the 
treatment  of  narrow  parity  clauses  in  the  hotel  booking  sector.  The  evaluation  study 
pointed  out  that  several  NCAs  decided  not  to  take  action  against  narrow  parity  clauses 
because they considered that they had only a low or no negative impact on competition, 
as the hotels or restaurants were still able to offer lower prices on other online platforms. 
However, a different stance was taken by the German NCA in relation to a narrow parity 
clause in its case against Booking.com.207 It found that hotels would have no incentive to 
reduce  prices  on  other  platforms  if  they  could  not  offer  lower  prices  on  their  own 
(commission-free) sales channels. The German NCA also considered that Booking.com's 
narrow parity clauses would restrict competition between hotels by limiting their freedom 
to set prices. 

Fourth,  very  few  respondents  to  the  public  consultation  mentioned  a  possible  lack  of 
coherence  with  the  P2B  Regulation,208 pointing  to  Article  10  of  the  P2B  Regulation, 
which is applicable without prejudice to the application of other Union rules, including 

206  See section 3.4.2.3.1 of the evaluation study. 
207  German NCA (Bundeskartellamt), Decision B 9 – 121/13 dated 22 December 2015. It should be noted 
that the Düsseldorf Higher Regional Court (Oberlandesgericht) annulled the prohibition decision on 4 
June 2019 (VI-Kart 2/16 (V) – booking). The German NCA’s appeal against the judgment is currently 
pending before German Supreme Court (Bundesgerichtshof). 

208  Regulation  (EU)  2019/1150  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on 

promoting fairness and transparency for business users of online intermediation services. 

184 

 
 
 
 
 
                                                           
competition law. It was argued that, to allow for a consistent assessment of parity clauses 
across the EU, the VBER should clarify the circumstances under which those clauses are 
prohibited. 

4.6.4.  Non-compete obligations (Article 5 of the VBER) 

As explained in section 4.5 above, the VBER excludes three restrictions from the benefit 
of the block  exemption  irrespective of the market  share of the parties to  the agreement 
concerned, while the benefit of the VBER continues to apply to the remaining part of the 
vertical agreement if that part is severable from the non-exempted restrictions.  

Article  5(1)(a)  of  the  VBER  concerns  non-compete  obligations  the  duration  of  which 
exceeds  five  years  or  is  indefinite  (including  non-compete  obligations  that  are  tacitly 
renewable  beyond  a  period  of  five  years),  except  when  they  concern  contract  goods  or 
services being sold by the buyer from premises or land owned by the supplier or leased 
by the supplier from third parties not connected with the buyer provided that the duration 
of the non-compete obligation does not exceed the period of occupancy of the premises 
and  land  by  the  buyer.209 Article  5(1)(b)  of  the  VBER  covers  post-term  non-compete 
obligations on the buyer, unless they are indispensable to protect know-how transferred 
from the supplier to the buyer, and limited to the point of sale from which the buyer has 
operated  during  the  contract  period  and  a  maximum  period  of  one  year  after  the 
termination of the agreement, in line with Article 5(3) of the VBER. Article 5(1)(c) of the 
VBER concerns restrictions on the sale by members of a selective distribution system of 
products  of  specific  competing  suppliers.  Paragraphs  65-69  of  the  Vertical  Guidelines 
provide further guidance on these excluded restrictions. 

The  evaluation  has  shown  that  for  a  large  majority  of  respondents  to  the  public 
consultation Article 5 of the VBER provides an appropriate level of legal certainty.  

However, although the content of this provision is well understood, a significant number 
of respondents to the public consultation considered that the provision results in false 
negatives  by covering non-compete obligations that satisfy the conditions laid down in 
Article  101(3)  of  the  Treaty  and  thus  wrongly  excluding  them  from  the  benefit  of  the 
VBER.  

First,  a  significant  number  of  respondents  to  the  public  consultation  raised  issues  with 
regard to the scope of Article 5(1)(a) of the VBER.  

209  See VBER, Article 5(2). 

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For some respondents to the public consultation, limiting the application of the VBER to 
non-compete  obligations  with  a  maximum  duration  of  five  years  is  not  economically 
justified since businesses often enter into longer commercial relationships, coupled with 
long-term  investments.  They  also  argued  that  excluding  tacitly  renewable  non-compete 
obligations  from  the  VBER  is  legally  unjustified  to  the  extent  that  the  buyer  can 
terminate  or  renegotiate  the  agreement  (including  the  non-compete  obligation)  at  any 
time with a reasonable notice period and at reasonable costs.  

Some  respondents  to  the  public  consultation  also  considered  the  overly  broad  scope  of 
the exclusion to result in an unnecessary burden for businesses. Some of the respondents 
indicated  that,  in  practice,  businesses  wanting  to  benefit  from  the  safe  harbour  of  the 
block  exemption  limit  the  duration  of  their  contracts  to  five  years  and  obviate  tacit 
renewal. In order to continue their contractual relationship beyond five years, they have 
to  either  include  a  renegotiation  clause  or  sign  a  new  contract,  which  generates  an 
unnecessary administrative burden and additional transaction costs.  

Moreover, respondents pointed out that the notion of premises used in Article 5(2) of the 
VBER  is  too  restrictive  and  that  the  derogation  should  therefore  be  applicable  to  all 
business activities of the buyer. 

In addition, some respondents to the public consultation pointed to a lack of guidance on 
the assessment of non-compete obligations that cannot benefit from the block exemption, 
but  can  be  considered  as  nonetheless  fulfilling  the  conditions  of  Article  101(3)  of  the 
Treaty.  More  specifically,  some  respondents  indicated  that  it  is  not  clear  whether  and 
under which circumstances non-compete obligations exceeding five years in franchising 
agreements  are  exempted  from  the  application  of  Article  101(1)  of  the  Treaty.  In 
particular,  respondents  pointed  out  that  paragraphs  148  and  190  of  the  Vertical 
Guidelines and Article 5(2) of the VBER are not fully consistent and clear as regards the 
admissibility  of  non-compete  clauses  of  longer  duration.  In  their  view,  due  to  the  key 
features  of  franchise  agreements,  non-compete  clauses  are  justified  for  the  whole 
duration  of  the  agreements,  regardless  of  other  conditions  being  met.  The  current  rules 
are therefore not sufficiently clear on whether there are situations in which this would not 
be  the  case.  Respondents  also  pointed  to  a  lack  of  clarity  as  to  whether  non-compete 
clauses  of  longer  duration  in  franchising  agreements  fulfil  the  conditions  of  Article 
101(3) of the Treaty or fall outside the scope of Article 101(1) of the Treaty.  

Other respondents took issue with the limited examples in paragraphs 146 and 148 of the 
Vertical  Guidelines,  which  only  mention  two  specific  circumstances  in  which  non-
compete  obligations  longer  than  five  years  can  be  justified  under  Article  101(3)  of  the 
Treaty  (i.e.  high  relationship-specific  investments  or  the  transfer  of  substantial  know-
how).  They  argued  that  the  Vertical  Guidelines  do  not  contain  enough  examples  and 

186 

 
 
 
 
 
explanations  to  illustrate  how  Article  101(3)  of  the  Treaty  is  applied  to  non-compete 
obligations  exceeding  five  years.  Some  respondents  also  pointed  to  the  fact  that  the 
Vertical Guidelines do not contain a list of objective criteria that businesses could rely on 
to  assess  the  compatibility  of  the  duration  of  a  particular  non-compete  obligation  with 
Article 101(3) of the Treaty.  

Finally,  a  few  respondents  pointed  to  a  contradiction  with  Article  L.330  of  the  French 
Commercial Code, which considers that exclusivity clauses up to 10 years are valid.  

Second, some  respondents  to  the public  consultation  considered that  Article  5(1)(b)  of 
the  VBER,  which  excludes  post-term  non-compete  clauses  from  the  benefit  of  the 
VBER, is too broad. Besides, some of them argued that the cumulative conditions for 
the derogation  set out in Article 5(3) of the VBER are outdated and too narrowly 
defined.  

Some respondents to the public consultation took the view that limiting the benefit of the 
VBER to post-term non-compete obligations applying "to premises and land from which 
customers have operated during the contract period" does not correspond to new market 
developments  such  as  the  increasing  trend  towards  online  sales.  Moreover,  the  limited 
territorial scope of this provision hinders the initially envisaged protection of know-how 
and  trade  secrets  since  the  customer  can  resume  its  competing  activity  from  a  location 
close by.  

Moreover, the respondents to the public consultation pointed to the fact that a post-term 
non-compete obligation can only benefit from the block exemption if it is indispensable 
to protect the know-how transferred from the supplier to the buyer and provided that this 
know-how  is  substantial  (see  Article  1(1)(g)  of  the  VBER).  According  to  them,  the 
VBER  and  the  Vertical  Guidelines  do  not  provide  enough  guidance  to  determine  in 
practice  if  the  know-how  to  be  protected  is  in  fact  substantial  and  thus  covered  by  the 
derogation. 

Respondents  to  the  public  consultation  representing  the  franchisor  side  also  considered 
that a post-term non-compete obligation that is limited to one year and does not cover the 
entire  exclusive  territory  allocated  to  the  franchisee  does  not  provide  for  sufficient 
protection of know-how. In contrast, respondents representing the franchisees argued that 
post-term  non-compete  clauses  are  disproportionate,  even  if  limited  to  one  year.  They 
explained that, in practice, such clauses mean that the franchisee is faced, at the end of 
the  contract,  with  either  unconditionally  continuing  the  cooperation  with  the  same 
franchisor or losing its  activity  and customers. Such clauses thus  place franchisees  in  a 
weaker  contractual  position.  In  addition,  respondents  argued  that  such  non-compete 
clauses also deter new franchisors from entering the market, as existing franchisees will 
be deterred from changing to another franchise network. As regards the limitation of such 

187 

 
 
 
 
 
non-compete  clauses  to  situations  in  which  they  are  indispensable  to  protect  the 
supplier’s know-how, respondents argued that, in practice, it is difficult for franchisees to 
argue that such a condition is not fulfilled, since the franchisor usually does not specify 
what know-how is considered relevant and franchisees cannot afford to challenge this in 
court. They therefore argued that the definition of know-how in the VBER is too broad. 

Finally, some respondents pointed to a  contradiction with Articles L.341-1 and L.341-2 
of  the  French  Commercial  Code,  which  prohibit  post  contractual  non-compete  clauses, 
unless they fulfil certain cumulative criteria, and are therefore stricter than the VBER. 

Third, a few respondents to the public consultation took the view that Article 5(1)(c) of 
the  VBER,  which  excludes  non-compete  obligations  imposed  on  members  of  a 
selective  distribution  system  from  the  benefit  of  the  VBER,  is  unjustified, 
considering  the  efficiencies  that  can  result  from  restricting  the  ability  of  authorised 
resellers to sell products or brands of particular competing suppliers.  

Respondents  argued  that  such  restrictions  may  be  justified  to  avoid  free-riding  by 
specific  competitors  on  the  investments  made  by  the  supplier  towards  its  authorised 
resellers (e.g. in training and promotional material).  

Respondents  further  argued  that  also  the  need  to  protect  sensitive  commercial 
information  provided  by  the  supplier  can  justify  limiting  the  ability  of  authorised 
resellers  to  deal  with  others  suppliers,  in  particular  when  the  products  and  services 
concerned are technically sophisticated and require close interaction between the supplier 
and its buyers. This close technical cooperation may create the justified concern that the 
information  provided  by  the  supplier  to  the  authorised  reseller  could  be  used  for  the 
benefit  of  its  competitor(s)  and  cause  the  supplier  to  limit  the  disclosure  of  such 
information to the detriment of the reseller and end customers. 

4.6.5.  Exclusive distribution    

Exclusive distribution refers to a distribution model where the supplier agrees to sell its 
products only to one distributor for resale in a particular territory and where the exclusive 
distributor  is  restricted  from  actively  selling  into  other  territories,  which  are  either 
reserved  for  the  supplier  or  allocated  to  other  exclusive  distributors.210 As  explained  in 
section  4.6.2  above,  exclusive  distribution  agreements  with  these  characteristics  are 
block-exempted  pursuant  to  Article  4(b)(i)  of  the  VBER,  provided  that  the  parties’ 
market share does not exceed the market share threshold of 30%. Paragraphs 151-167 of 
the  Vertical  Guidelines  provide  guidance  on  the  assessment  of  exclusive  distribution 

210  See Vertical Guidelines, paragraph 151. 

188 

 
 
 
 
 
                                                           
agreements  that  fall  outside  the  scope  of  the  VBER  and  are  therefore  subject  to  an 
individual  assessment.  Paragraph  151  of  the  Vertical  Guidelines  explains  that  the  main 
competition  risks  stemming  from  exclusive  distribution  are  reduced  intra-brand 
competition  and  market  partitioning,  which  may 
in  particular  facilitate  price 
discrimination.  Moreover,  when  most  or  all  suppliers  in  a  particular  market  distribute 
their products on an exclusive basis, this may soften competition and facilitate collusion 
at both the suppliers’ and the distributors’ level. Lastly, exclusive distribution may lead 
to  the  foreclosure  of  other  distributors  and  thus  reduced  competition  at  the  distribution 
level.  

The  evidence  gathered  during  the  evaluation  indicates  that  the  rules  on  exclusive 
distribution  have  generally  worked  well.  A  large  majority  of  stakeholders  indicated 
that  the  treatment  of  exclusive  distribution  in  the  VBER,  together  with  the  Vertical 
Guidelines,  is  appropriate  and  does  not  raise  major  issues  regarding  legal  certainty.  A 
majority of the respondents to the public consultation also indicated that paragraphs 151-
167  of  the  Vertical  Guidelines  provide  an  appropriate  level  of  legal  certainty. 211  In 
addition,  very  few  respondents  indicated  that  the  rules  on  exclusive  distribution  would 
need  revision  in  light  of  new  market  developments.  Similarly,  most  NCAs  found  the 
current rules to work well and had no specific comments on them.  

The  evaluation  study,  however,  found  that  exclusive  distribution  is  not  a  widespread 
practice, with only a limited number of stakeholders reporting the use of this distribution 
model. The market investigation performed as part of the evaluation study indicated that 
selective  distribution  is  generally  preferred  over  exclusive  distribution,  as  it  allows  to 
achieve  the  same  benefits  while  reducing  costs  and  allowing  better  market  coverage. 
Some  stakeholders  reported  using  exclusive  distribution  for  new  brands,  and 
subsequently  switching  to  selective  or  even  unrestricted  distribution  once  the  brand  or 
product  has  become  well  known  in  the  market.  As  to  the  sectors  covered,  the  market 
investigation  performed  as  part  of  the  evaluation  study  suggests  that  this  distribution 
model  remains  more  relevant  for  specific  markets,  like  specialised  electronics  (e.g. 
medical  lab  equipment),  industrial  machinery,  or  frozen  products.  As  for  NCA  cases 
concerning  exclusive  distribution  during  the  past  ten  years,  the  highest  number  was 

211  Respondents to the public consultation were asked to comment on the level of legal certainty of Article 
4(b) of the VBER and the corresponding paragraphs of the Vertical Guidelines in their entirety, while 
also having the possibility to explain their views in free text. There is therefore no separate information 
on  how  respondents  as  a  whole  view  the  level  of  legal  certainty  of  the  exception  set  out  in  Article 
4(b)(i) of the VBER. The views of the respondents as a whole regarding Article 4(b) of the VBER are 
explained in section 4.6.2 above. This section also explains issues raised by individual respondents as 
regards the level of legal certainty of the exception using free text.  

189 

 
 
 
 
 
                                                           
reported in the pharmaceutical industry and the media sector (although a number of other 
sectors were also concerned, such as telecoms or food and beverages).  

Nevertheless, the evaluation pointed to some issues regarding the current rules.  

First,  some  respondents  to  the  public  consultation,  as  well  as  participants  in  the 
stakeholder workshop argued that the rules are not sufficiently flexible as regards the 
exception set out in Article 4(b)(i) of the VBER, as they do not allow appointing two 
or  more  distributors  for  a  given  exclusive  territory,  but  just  one  per  territory.  Other 
respondents to the public consultation considered there to be a lack of flexibility in the 
requirement that a seller has to reserve all territories or customers either to an exclusive 
buyer  or  to  itself.  The  exception  therefore  does  not  apply  to  cases  where  a  seller  has 
appointed one or more exclusive distributors but has failed to reserve all other territories 
or customers to itself or other buyers. Respondents explained that this provision does not 
adequately  reflect  the  piecemeal  way  in  which  many  distribution  networks  are 
established.  They  argued  that  it  is  not  sufficiently  clear  whether  it  is  possible  for  an 
exclusive distribution agreement to cover only one Member State or a part of a Member 
State  and  whether  it  is  necessary  to  identify  in  the  agreement  concluded  with  non-
exclusive distributors all exclusive distributors at European level. 

Second, respondents pointed to a lack of guidance or limitation with regard to the size 
or scope of the exclusive territory or customer group. The evaluation study indicated 
that  exclusivity  by  territory  is  more  prevalent  than  exclusivity  by  customer  group, 
although  there  is  also  evidence  for  some  overlap  between  the  two.  Other  respondents 
mentioned a lack of clarity about whether a supplier can reserve for itself a territory or a 
customer  group  where  it  does  not  supply  that  territory  or  customer  group  and  has  no 
intention to do so in the near future.  

Third, as regards the fact that the rules allow the restriction of active sales by a buyer, but 
only  where  such  a  restriction  does  not  limit  sales  by  the  customers  of  the  buyer,  some 
respondents argued that there could be legitimate reasons for suppliers to restrict also 
sales  by  the  customers  of  the  buyer,  so  that  this  condition  could  be  removed.  Other 
respondents explained in this regard that manufacturers and brand owners are concerned 
that distributors could intentionally use third parties for the sole purpose of undermining 
the active selling restrictions and argued that it should be possible to prevent dealers from 
selling  to  customers  where  it  is  obvious  that  these  customers  intend  to  only  or 
predominantly sell into other exclusive territories. Respondents also mentioned a lack of 
clarity with regard to the notion of "customers of the buyer", as it is not clear whether it 
includes all forms of sub-dealers, or just independent retailers. 

190 

 
 
 
 
 
Fourth,  stakeholders  mentioned  a  lack  of  clarity  regarding  the  possibility  to  combine 
selective  and  exclusive  distribution  (this issue was also raised as regards the rules on 
selective distribution, see section 4.6.6 below).  

Respondents  to  the  public  consultation  and  participants  in  the  stakeholder  workshop 
indicated that there is insufficient guidance on the circumstances in which exclusive and 
selective distribution may be combined in the same territory, but at different levels of the 
supply  chain  without  raising  concerns  under  Article  101(1)  of  the  Treaty.  Respondents 
argued that exclusive distribution at the wholesale level and selective distribution at the 
retail level is commonly used as it reflects the most efficient way of putting certain types 
of  goods  on  the  market.  They  therefore  asked  for  a  clarification  that  this  is  indeed 
possible  under  the  VBER  and  whether,  in  such  a  scenario,  the  exclusive  distributors  at 
wholesale level  may be  restricted from  selling to retailers that are not  authorised under 
the  selective  distribution  network  at  retail  level.  The  evaluation  study  confirmed  that 
combining exclusive distribution at  the wholesale level  and selective distribution  at  the 
retail level is a common practice and that there is a lack of clarity in the current rules as 
to  the  circumstances  under  which  a  combination  of  selective  and  exclusive  distribution 
may benefit from the VBER. 

Respondents to the public consultation also indicated that there is insufficient clarity as to 
how exclusive and selective distribution may be combined in different territories. While 
this appears to be allowed by the current rules, respondents pointed to a lack of clarity as 
to  whether,  in  case  a  supplier  applies  selective  distribution  in  some  territories  and 
exclusive distribution in others, exclusive distributors could  be prohibited  from  making 
sales  to  unauthorised  dealers  in  the  territories  where  the  supplier  applies  selective 
distribution.  

Respondents  also  indicated  that  the  relationship  between  paragraphs  56  and  152  of  the 
Vertical  Guidelines  is  not  sufficiently  clear.  Paragraph  152  of  the  Vertical  Guidelines 
states  that  a  combination  of  exclusive  distribution  and  selective  distribution  is  only 
exempted by the VBER if active selling into other territories is not restricted. Paragraph 
56 of the Vertical Guidelines states that dealers in a selective distribution system cannot 
be restricted in the choice of users to whom they may sell, or purchasing agents acting on 
behalf  of  those  users,  except  to  protect  an  exclusive  distribution  system  operated 
elsewhere.  Respondents  to  the  public  consultation  indicated  that  it  is  not  clear,  when 
reading  both  paragraphs,  whether  active  sales  restrictions  are  allowed  in  a  selective 
distribution system when this is done in order to protect an exclusive distribution system 
that operates in another territory. Respondents further argued that a restriction of active 
sales in such cases could be subject to the same assessment as set out in paragraph 63 of 
the  Vertical  Guidelines,  which  indicates  that  an  individual  exemption  under  Article 
101(3)  of  the  Treaty  could  be  available  for  restrictions  on  active  sales  by  appointed 

191 

 
 
 
 
 
wholesalers  to  appointed  retailers  operating  in  the  territory  of  other  appointed 
wholesalers  to  overcome  possible  free-riding  on  the  investment  of  the  latter  in 
promotional activities to support retail sales in their respective territory.  

Participants in the stakeholder workshop also pointed to a lack of clarity in the Vertical 
Guidelines  with  regard  to  the  possibility  for  distributors  to  set  up  selective  distribution 
systems in some Member States, while resorting to exclusive distribution in others, or to 
allow small distributors to focus their activities on some Member States only. 

NCAs confirmed that the VBER and the Vertical Guidelines are not clear about possible 
limitations on combining selective and exclusive distribution, in particular as regards the 
possibility  to  restrict  active  sales  in  the  case  of  a  combination  of  the  selective  and 
exclusive distribution. The evaluation study corroborates the finding that there is a lack 
of clarity on how to combine exclusive and selective distribution, in particular as regards 
the possibility to restrict active sales. 

4.6.6.  Selective distribution  

As  set  out  in  Article  1(e)  of  the  VBER,  selective  distribution  refers  to  a  distribution 
system  in  which  the  supplier  undertakes  to  sell  the  contract  goods  or  services  to 
distributors selected on the basis of specified criteria, while the distributors undertake not 
to sell such goods or services to unauthorised distributors within the territory reserved by 
the  supplier  to  operate  that  system.  As  explained  in  paragraph  175  of  the  Vertical 
Guidelines, to assess the possible anti-competitive effects of selective distribution under 
Article  101  of  the  Treaty,  a  distinction  needs  to  be  made  between  purely  qualitative 
selective  distribution,  where  distributors  are  selected  only  on  the  basis  of  objective 
criteria  required  by  the  nature  of  the  product  (e.g.  training  of  sales  personnel),  and 
quantitative selective distribution, where selection criteria are used that limit the potential 
number  of  distributors  more  directly  (e.g.  requiring  minimum  or  maximum  sales  or 
fixing  the  number  of  dealers).  Purely  qualitative  selective  distribution  is  considered  to 
fall  outside  Article  101(1)  of  the  Treaty  due  to  the  lack  of  anti-competitive  effects, 
provided that the conditions established by the CJEU in its Metro judgment (the so-called 
"Metro criteria") are fulfilled.212  

212  Judgment of 25 October 1977 in Case 226/76, ECLI:EU:C:1977:167,  Metro SB-Großmärkte GmbH & 
Co. KG v Commission. Selective distribution systems, however, are considered to restrict competition if 
they, especially as a result of market concentration or of the cumulative effects of parallel networks of 
similar  agreements,  impair  price  competition  between  products  of  different  brands  or block  access  to 
the  market  for  undertakings  using  other  forms  of  distribution.  See  Judgment  of  22  October  1986  in 
Case 75/84, ECLI:EU:C:1986:399, Metro v Commission, (Metro II). 

192 

 
 
 
 
 
                                                           
As  explained  in  paragraph  176  of  the  Vertical  Guidelines,  quantitative  and  qualitative 
selective  distribution  systems  are  block  exempted  as  long  as  the  market  shares  of  the 
parties to the selective distribution agreement do not exceed 30%, even if combined with 
other  non-hardcore  vertical  restrictions,  provided  that  active  selling  by  the  authorised 
distributors  to  each  other  and  to  end  users  is  not  restricted.  The  latter  restrictions  are 
considered  hardcore  restrictions  pursuant  to  Article  4(c)  and  4(d)  of  the  VBER.  The 
restriction  of  sales  by  the  members  of  a  selective  distribution  system  to  unauthorised 
distributors within the territory reserved by the supplier for the operation of that system is 
however permitted pursuant to Article 4(b)(iii) of the VBER. An obligation causing the 
members of a selective distribution system not to sell the brands of particular competing 
suppliers is excluded from the benefit of the block exemption pursuant to Article 5(1)(c) 
of the VBER (see section 4.6.4 above).   

It  should  be  noted  that,  as  clarified  in  paragraph  176  of  the  Vertical  Guidelines,  the 
VBER  exempts  selective  distribution  regardless  of  the  nature  of  the  product  concerned 
and regardless of the nature of the selection criteria. However, where the characteristics 
of the product do not require selective distribution or do not require the applied criteria 
(e.g. the requirement to have one or more brick-and-mortar shops or to provide specific 
services), such a distribution system does not generally bring about sufficient efficiency-
enhancing effects to counterbalance a significant reduction in intra-brand competition. If 
appreciable  anti-competitive  effects  occur,  the  benefit  of  the  VBER  is  likely  to  be 
withdrawn. 

Outside the safe harbour created by the VBER or in case of a withdrawal of the benefit of 
the  block  exemption,  selective  distribution  systems  are  subject  to  an  individual 
assessment.  Paragraphs  174-188  of  the  Vertical  Guidelines  provide  guidance  on  the 
assessment of selective distribution systems under Article 101 of the Treaty. 

The evaluation has identified two main categories of issues regarding the functioning of 
the VBER  and the Vertical Guidelines in  relation to selective distribution systems. The 
first category concerns general issues related to the functioning  of selective distribution 
systems  (see  section  4.6.6.1  below)  and  the  second  category  concerns  specific  issues 
related to restrictions on online sales in the context of selective distribution (see section 
4.6.6.2 below).  

4.6.6.1.  General findings 

First,  all stakeholders, including  respondents  to  the public consultation  and participants 
in the workshop, unanimously confirmed the significant increase in the use of selective 
distribution at different levels of the vertical supply and distribution chain, covering 
an  increasing  number  of  geographical  areas  and  products  over  time.  The  evidence 

193 

 
 
 
 
 
provided by the evaluation study confirmed the finding of an increased use of selective 
distribution  systems  during  the  last  ten  years,  which  is  in  line  with  the  results  of  the 
Commission’s e-commerce sector inquiry. 

Second,  the  evidence  gathered  during  the  evaluation  indicates  that  the  level  of  legal 
certainty  provided  by  the  VBER  and  the  Vertical  Guidelines  as  regards  selective 
distribution 
is  overall  acceptable,  although  there  are  some  areas  where 
clarifications may be needed, notably to ensure a more coherent application of the rules 
across different Member States. 

The  replies  of  a  large  majority  of  the  respondents  to  the  public  consultation  confirmed 
this finding. However, as illustrated below, the areas where respondents pointed to a need 
for  clarifications  concern,  inter  alia,  the  relationship  between  selective  distribution 
systems  and  exclusive  distribution,  the  application  of  Article  4(b)(iii)  of  the  VBER, 
including  the  related  paragraph  55  of  the  Vertical  Guidelines,  and  the  application  of 
paragraph 63 of the Vertical Guidelines. 

This  finding  is  also  supported  by  the  evidence  provided  in  the  evaluation  study.  It  is 
reported that generally, according to the interviews performed, most stakeholders seem to 
be satisfied with the way selective distribution agreements are treated under the current 
regulatory framework. 

The  need  for  clarifications  regarding  some  aspects  was  also  highlighted  by  the  NCAs 
which  notably  pointed  to  a  lack  of  clarity  with  regard  to  the  interaction  between  the 
Metro criteria and the conditions for exemption of selective distribution under the VBER. 

Third,  stakeholders  have  very  diverse  opinions  about  the  effects  of  selective 
distribution systems on competition set out in the related provisions of the Vertical 
Guidelines.  This  is  also  reflected  in  the  evidence  collected  in  the  context  of  the 
evaluation study. 

Several stakeholders reported that selective distribution systems result in efficiencies for 
consumers  which  are  not  only  reflected  in  competitive  prices  but  also  in  non-price 
aspects such as higher quality and service levels, as well as a uniform brand image and 
uniformity of pre- and post-sales services offered to customers. They also reported that 
selective distribution systems protect authorised resellers from free-riding by low service 
retailers  and  generate  incentives  for  brand  owners  and  retailers  to  offer  an  appropriate 
level  of  quality  and  service,  an  appropriate  product  range,  a  brand  presentation  that 
enhances  the  value  of  the  branded  product,  as  well  as  to  ensure  the  expertise  that  is 
necessary to add value to the branded product while not harming the brand.  

194 

 
 
 
 
 
The  use  of  selective  distribution  systems  also  allows  new  ways  of  offering  products  to 
customers  such  as  "click  and  collect".  This  service  allows  consumers  to  gather 
information, as well as to select and purchase their preferred products online and to pick 
up the products in a physical store, thus avoiding queues at pick-up and freeing up time 
for discovering new products in the store. Respondents to the public consultation argued 
that  the  ability  to  provide  such  services  can  only  take  place  within  a  network  of 
authorised  retailers  where  any  free-riding  concerns  are  mitigated  by  the  fact  that 
consumers  use  the  sales  services  offered  by  the  same  authorised  retailer  in  different 
channels  (i.e.  own  website  and  physical  store)  or  more  largely  among  retailers  who  all 
invest  in  the  development  of  the  network  and  notably  the  provision  of  an  appropriate 
level of pre-sales services. 

Some  respondents  to  the  public  consultation  referred  to  the  efficiencies  linked  to 
selective distribution networks for luxury products and high-tech products. They reported 
that the control of online sales that can be achieved within a selective distribution system 
is essential to avoid the risk of sales by unauthorised retailers, which could jeopardise the 
brand image and substantially reduce its value, including counterfeit sales. 

In contrast, some respondents to the public consultation argued that selective distribution 
systems  can  be  used  as  a  means  to  implement  resale  price  maintenance,  which  is  a 
hardcore  restriction  pursuant  to  Article  4(a)  of  the  VBER.  They  explained  that,  by 
threatening  to  stop  the  supply  of  products,  suppliers  can  force  authorised  retailers  to 
follow their price recommendation, which amounts to fixing the resale price in the sense 
of Article 4(a) of the VBER. 

Some  respondents  reported  that  the  criteria  used  to  select  authorised  retailers  in  the 
context  of  selective  distribution  are  often  not  communicated  by  the  supplier.  The 
evidence gathered during the evaluation on the transparency of the selection criteria used 
by  suppliers  is  however  rather  mixed.  In  particular,  the  evaluation  study  reported 
examples of both  transparent,  clear and objective criteria (for instance in the cosmetics 
sector) and secret criteria (for instance in the case of smaller brands in various sectors). 

Some  respondents  to  the  public  consultation  argued  that  selective  distribution  systems 
are particularly effective and justified for specific types of products, like luxury and high-
tech products. They thus argued that the benefit of selective distribution systems depends 
crucially  on  the  nature  of  the  product  concerned  and  the  extent  to  which  the  selection 
criteria used are non-discriminatory, transparent, necessary and proportionate. According 
to those respondents, the absence of these characteristics would reduce competition in the 
market and thus create the conditions for maintaining prices at artificially high levels. 

The  evaluation  study  indicated  that  selective  distribution  systems  can  have  both  a  pro-
competitive and an anti-competitive rationale and that their effects on consumer welfare 

195 

 
 
 
 
 
depend  on  the  specific  market  circumstances.  According  to  the  literature  review,213 the 
pro-competitive  rationale  is  to  encourage  the  provision  of  retail  services  by  addressing 
free-rider  problems,  such  as  incentivising  retailers  to  maintain  and  support  the  brand 
image,  supporting  the  launch  of  new  products  and  protecting  retailers  in  making 
relationship-specific  investments.  The  anti-competitive  rationale  is  twofold,  namely 
facilitating  collusion  at  supplier  level  and  preventing  certain  retailers  from  offering 
certain products (i.e. foreclosure at retailer level). According to the interviews conducted, 
the evaluation study found that the most common motivations behind the implementation 
of  selective  distribution  networks  are  to  protect  brand  image  and  to  offer  a  better 
customer experience. According to some stakeholders, to promote innovation, there is a 
need  for  investments  not  only  by  the  manufacturers  but  also  by  retailers.  Innovative 
products  often  require  investments  in  pre-sales  and  after-sales  services  that  can  be 
supported  through  selective  distribution  agreements.  In  order  to  allow  for  such 
investments, there is a need to have sufficient margins. If competition between retailers 
were  to  be  only  focussed  on  price,  these  margins  could  be  endangered.  Therefore, 
according  to  the  interviews  and  the  survey  conducted,  supply  chains  need  to  shift 
competition  from  purely  price-based  competition  to  competition  on  the  quality  of 
services provided. The evaluation study however recognised that this rationale cannot be 
valid across all industries and product categories. 

NCAs noted that over the last ten years there has been a tendency among manufacturers 
to  apply  qualitative  selection  criteria  that  are  completely  unrelated  to  the  actual 
requirements  of  the  product  concerned.  According  to  them,  this  seems  to  suggest  that 
selective  distribution  could  be  used  as  a  means  to  reduce  intra-brand  competition  and 
discipline  deviant  market  behaviour,  with  the  ultimate  aim  of  stabilising  prices  at  a 
higher level than under competitive conditions. 

Fourth,  in  the  evaluation,  stakeholders  questioned  the  appropriateness  of  the  level  of 
the market share thresholds in the context of selective distribution systems. 

Some respondents to the public consultation suggested that a level of 30% seems rather 
high  in  view  of  the  fact  that  selective  distribution  systems  often  include  restrictions  on 
online sales and can thus substantially limit the pervasiveness of the online sales channel 
that many customers could otherwise use. 

NCAs also stressed that the exemption of selective distribution up to a market threshold 
of  30%  might  generate  false  positives  by  exempting  some  agreements  that  should  not 

213  See section 3.1.1.2.1 and Annex XI.II of the evaluation study. 

196 

 
 
 
 
 
                                                           
have been exempted, with a not well functioning withdrawal mechanism being the only 
available instrument to tackle problematic situations below the market share threshold. 

Fifth,  the  evaluation  pointed  to  a  specific  issue  regarding  the  functioning  of  the 
market  share  threshold  and  the  willingness  of  businesses  to  set  up  pan-European 
selective distribution systems.  

A respondent to the public consultation mentioned that basing the exemption on a 30% 
market share might conflict with the wish of businesses to impose a homogeneous set of 
rules in a pan-European selective distribution system, if the business holds market shares 
above this threshold in some of the national markets where it operates. As a result, a pan-
European strategy would be undermined by the need to introduce specific amendments to 
the general criteria for the markets where the business’s market shares are above 30%.  

At  the  same  time,  other  respondents  underlined  the  importance  of  having  flexibility  to 
allow specific and differentiated rules to be imposed in different Member States in order 
to capture the local characteristics of the markets concerned. 

Sixth, the evidence gathered during the evaluation indicated that Article 4(b)(iii) of the 
VBER is perceveid as not providing sufficient legal certainty.  

Respondents to the public consultation argued that Article 4(b)(iii) of the VBER and the 
related paragraph 55 of the Vertical Guidelines are too limited in scope. Given that this 
provision  does  not  allow  to  limit  sales  outside  the  territory  reserved  for  selective 
distribution, members of the selective distribution system are free to sell to unauthorised 
distributors  located  outside  the  reserved  territory  who  can  then  resell  the  product  back 
into the reserved territory. According to respondents, this would undermine the ability of 
businesses to set up selective distribution systems in the most efficient way, thus forcing 
them  to  choose  between  an  ineffective  "permeable"  selective  distribution  system  for  a 
limited  territory  and  a  selective  distribution  system  at  pan-European  level  to  avoid  this 
issue. 

Respondents  to  the  public  consultation  pointed  out  that  paragraph  55  of  the  Vertical 
Guidelines only covers situations where the supplier does not yet market its products in a 
given  country  through  a  selective  distribution  system.  Therefore  it  does  not  cover 
situations  where  the  supplier  has  chosen  to  market  its  products  itself.  As  a  result, 
authorised  distributors  in  other  countries  can  sell  to  unauthorised  distributors  in  the 
country  in  which the supplier has chosen to  distribute the products  itself. According to 
the respondents, it should however be the right of the supplier to limit sales by authorised 
distributors in these circumstances. 

197 

 
 
 
 
 
For the same reason, respondents to the public consultation argued that as a consequence 
of the current scope of Article 4(b)(iii) of the VBER, a  supplier cannot  operate parallel 
networks of selective distribution systems in different territories. 

Participants in the workshop reported that the current framework does not allow selective 
distribution  to  be  enforced  in  a  sufficiently  strict  manner  against  the  sales  by 
unauthorised  resellers  within  the  EU.  They  mentioned  that  the  lack  of  enforceability 
translates directly into a low quality of services for consumers. 

Seventh,  the  evaluation  identified  apparent  issues  in  relation  to  the  compatibility 
between selective distribution  and exclusive distribution, which are dealt with in the 
context of exclusive distribution in section 4.6.5 above. 

Eighth, the evidence gathered during the evaluation indicated that paragraph 63 of the 
Vertical  Guidelines,  which  allows  restrictions  on  active  sales  within  a  selective 
distribution system under certain conditions, is perceived as not providing sufficient 
legal certainty and that businesses therefore refrain from applying this provision. 

Some  respondents  to  the  public  consultation  explained  that  this  provision  introduces  a 
welcome  degree  of  flexibility  to  the  hardcore  restriction  set  out  in  Article  4(d)  of  the 
VBER  and  the  related  paragraph  58  of  the  Vertical  Guidelines.  This  is  because  it 
provides  appropriate  investment  incentives  to  authorised  wholesalers  by  limiting  free-
riding  by  authorised  wholesalers  located  in  other  territories.  However,  due  to  the 
insufficient clarity on how NCAs would intend to assess compliance with paragraph 63 
of the Vertical Guidelines, businesses prefer not to run any financial and reputational risk 
and thus refrain from applying it in practice.  

Ninth,  all stakeholders,  including respondents  to  the public consultation,  participants  in 
the  workshops  and  NCAs,  pointed  to  the  fact  that  over  the  last  ten  years  the  case  law 
and  enforcement  practice  with  regard  to  selective  distribution  has  developed 
significantly.  Therefore,  the  VBER  and  Vertical  Guidelines  should  be  updated  by 
including relevant Union case law. A large number of respondents pointed in this regard 
to  Union  Court  judgements  like  Pierre  Fabre,214 Auto  24215 and  Coty,216 as  well  as  the 

214  Jugement of 13 October 2011 in Case C-439/09, EU:C:2011:649, Pierre Fabre Dermo-Cosmétique SAS 
v Président de l’Autorité de la concurrence and Ministre de l’Économie, de l’Industrie et de l’Emploi. 
215  Judgment  of  14  June  2012  in  Case  C-158/11,  EU:C:2012:351,  Auto  24  SARL  v  Jaguar  Land  Rover 

France SAS. 

216  Judgment of 6 December 2017 in Case C-230/16, EU:C:2017:941, Coty Germany GmbH v Parfümerie 

Akzente GmbH. 

198 

 
 
 
 
 
                                                           
enforcement  practice  of  the  Commission  (e.g.  Guess  case217)  and  NCAs  (e.g.  the  Stihl 
case by the French NCA218 and the Asics case by the German NCA219). In addition, the 
evaluation  study  provides  an  overview  of  relevant  NCA  cases  during  the  last  ten  years 
and also identifies relevant new case law. 

Tenth,  the  evaluation  showed  that,  over  the  last  ten  years,  NCAs  have  not  always 
assessed  the  compatibility  of  selective  distribution  systems  with  Article  101  of  the 
Treaty in a consistent manner. 

A large part of the respondents to the public consultation and several participants in the 
workshop  stated  that  the  NCAs  follow  inconsistent  approaches  in  their  assessment  of 
selective  distribution  systems.  Notably,  they  referred  to  the  qualification  as  by  object 
restriction  of  certain  criteria  imposed  on  authorised  distributors.  As  an  example,  they 
pointed  to  the  divergences  between  the  French  NCA  (e.g.  in  the  Stihl  case220)  and  the 
German NCA (e.g. in recent publications on vertical restrictions221).  

NCAs requested more guidance on the interpretation of recent case law, which seems to 
give suppliers operating selective distribution systems greater control over the conditions 
under  which  their  authorised  distributors  can  resell  their  products  and  services.  They 
argued that this case law could be interpreted in a way that may encourage businesses to 
establish selective distribution systems with the objective of imposing more restrictions 
on their authorised distributors in cases where the objective of brand protection may not 
be justified with regard to the nature of the products or services concerned. 

The evidence collected by the evaluation study confirms that NCAs approach differently 
certain  restrictions found in  selective distribution agreements. Notably regarding online 

217  See  Commission  press 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_18_6844.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 

release  of  17  December  2018, 

IP  18/6844, 

available 

218  Decision 18-D-23 of 24 October 2018 regarding practices implemented in the retail of outdoor power 
https://www.autoritedelaconcurrence.fr/en/decision/decision-18-d-23-24-october-2018-

equipment, 
regarding-practices-implemented-retail-outdoor-power. 
219  Decision B2-98/11 of 26 August 2015; summary available at: 

https://www.bundeskartellamt.de/SharedDocs/Entscheidung/EN/Fallberichte/Kartellverbot/2016/B2-
98-11.pdf?__blob=publicationFile&v=2. 

220  Decision 18-D-23 of 24 October 2018 regarding practices implemented in the retail of outdoor power 
https://www.autoritedelaconcurrence.fr/en/decision/decision-18-d-23-24-october-2018-

equipment, 
regarding-practices-implemented-retail-outdoor-power. 

221  See  "Competition  restraints  in  online  sales  after  Coty  and  Asics  -  what’s next?", Series of papers on 

"Competition and Consumer Protection in the Digital Economy", October 2018. 

199 

 
 
 
 
 
                                                           
sales  bans,  marketplace/platform  bans  and  dual  pricing  the  legal  assessment  by  NCAs 
differed to some extent. 

Eleventh,  the evidence  gathered during the evaluation indicated that the VBER  and the 
Vertical  Guidelines  are  perceveid  to  lack  guidance  on  the  resale  of  spare  parts  and 
notably on the question of whether the resale of spare parts can be restricted to authorised 
retailers.  A  respondent  to  the  public  consultation  who  had  highlighted  this  issue 
explained that in order to maintain the high-quality nature of the products that are subject 
to  selective  distribution,  a  manufacturer  needs  to  limit  the  resale  of  spare  parts  to 
authorised distributors only. 

4.6.6.2.  Specific findings related to online sales 

First, the evidence gathered during the evaluation indicated that paragraphs 52-54 of the 
Vertical  Guidelines,  which  contain  guidance  on  how  to  assess  some  online  sales 
restrictions, are perceived as providing a generally low level of legal certainty. 

Many stakeholders,  including respondents  to  the public consultation,  participants  in  the 
workshop and NCAs, pointed to a lack of guidance on the treatment of some online sales 
restrictions in the context of selective distribution, which reduced legal certainty for this 
form of distribution. 

The evidence gathered in the evaluation study confirmed the need for more guidance on 
certain  online  sales  restrictions  in  the  context  of  selective  distribution,  which  is 
reportedly a distribution model where those types of restrictions are used most often. 

Second, the evaluation identified a large variety of views  among stakeholders on the 
effects  of  the  brick-and-mortar  requirement,  which  is  block  exempted  under  the 
current rules as explained in paragraph 54 of the Vertical Guidelines. 

A  large  number  of  respondents  to  the  public  consultation  (including  manufacturers) 
stressed the importance of this restriction in the context of selective distribution and the 
need  for  flexibility  regarding  its  implementation  (e.g.  phrased  as  a  requirement  that 
authorised  retailers  sell  a  certain  minimum  number  of  products  in  value  or  volume 
offline). They stated that the brick-and-mortar requirement is necessary to provide offline 
distributors with the necessary incentives to invest in promoting a product by preventing 
free-riding by online distributors that focus mainly on price and do not offer comparable 
pre-sales services.  Some respondents  also  reported that the  costs incurred by  an offline 
distributor are significantly higher than the costs of an online distributor. As an example, 
they pointed to employment costs, which are 2 to 5 times lower online than in traditional 
retail channels. 

200 

 
 
 
 
 
Some respondents (including online platforms) however pointed out that this requirement 
is  a  way  to  exclude  pure  online  players  from  the  distribution  of  certain  products  and 
services,  regardless  of  the  quality  of  the  services  they  provide.  They  argued  that  pure 
online  distributors  have  made  and  are  currently  making  significant  investments  in  the 
improvement  of  their  services.  An  example  is  investments  in  the  overall  quality  of  the 
website,  improvements  in  the  display  of  pictures  and  videos  (e.g.  three-dimensional 
views),  purchasing  guides,  customer  feedback,  scoring  systems  and  online  customer 
service to help customers to make the right choice (e.g. through a chat function) operated 
by staff trained by the suppliers for that purpose. Substantial investments are also made 
to improve the logistics, e.g. with a view to reducing the delivery time (sometimes even 
allowing  for  delivery  within  the  same  day)  and  allowing  customers  to  exchange  the 
product after having tried it out or to refuse the purchase within 14 days, which is not the 
case if they purchase products offline. 

The evaluation study confirmed a widespread use of the brick-and-mortar requirement in 
selective  distribution  systems,  which  reflects  the  importance  of  this  criterion  for 
suppliers. While recognising that this requirement helps to address free-riding by online 
distributors  on  pre-sales  services  provided  in  physical  stores,  the  evaluation  study 
however  also  shows  that  distribution  has  evolved  towards  an  omni-channel  experience 
where  free-riding  can  occur  in  both  directions,  thus  including  free-riding  on  the 
investments  of  online  distributors  by  offline  distributors.222 This  finding  is  in  line  with 
the results of the e-commerce sector inquiry.223 

NCAs pointed out that there is a lack of clarity regarding the limits of the possibility for 
suppliers  to  require their distributors to  operate a brick-and-mortar shop.  This  concerns 
notably  the  question  (i)  whether  there  is  any  ceiling  to  be  applied  on  the  number  of 
required  brick-and-mortar  shops  (e.g.  absolute  number  per  geographic  area  or  relevant 
market vs. a more subjective proportionality requirement), (ii) whether this requirement 
is  only  allowed  in  selective  distribution  or  also  for  other  types  of  distribution  systems, 
and (iii) whether such a requirement is, in principle, acceptable regardless of the market 
share of the supplier (i.e. also above the 30% threshold). 

Third,  NCAs  pointed  out  that  paragraph  54  of  the  Vertical  Guidelines  is  not 
sufficiently clear as to whether quality standards for the use of the internet may also 
be imposed in distribution systems other than selective distribution. 

222  See sections 3.3.1.5, 3.3.2.5, 3.3.3.5, 3.3.4.5 and 3.3.9 of the study on consumer purchasing in Europe. 
223  See 

the  E-commerce  Sector 

the  Final 

Inquiry 

section 

report 

2.1 

on 

of 

at 

https://ec.europa.eu/competition/antitrust/sector_inquiries_e_commerce.html. 

201 

 
 
 
 
 
                                                           
Fourth, the evidence gathered during the evaluation indicated concerns  as  regards  the 
functioning of the equivalence principle enshrined in paragraph 56 of the Vertical 
Guidelines,  which  is  meant  to  ensure  that  manufacturers  do  not  dissuade  distributors 
from selling online by applying criteria to online sales that are not overall equivalent to 
those applied to offline sales. The evaluation pointed to mixed evidence suggesting that 
the  equivalence  principle  is,  on  the  one  hand,  ill-suited  to  and,  on  the  other  hand, 
compatible  with  the  current  retail  landscape.  Furthermore,  the  evidence  suggested  that 
the  Vertical  Guidelines  do  not  provide  sufficient  guidance  on  the  assessment  of  the 
equivalence principle. 

Several  respondents  to  the  public  consultation  argued  that  the  equivalence  principle  is 
based on a wrong premise because online and offline distribution are inherently different 
sales environments  and thus  require different  sets  of criteria and approaches to  account 
for this difference. They stressed that online sales are carried out at distance and do not 
allow physical interaction, whereas brick-and-mortar sales are carried out instantaneously 
the  provision  of  personalised  advice  and 
and  allow  for  physical 
demonstration  of  the  product  at  the  point  of  sale.  Furthermore,  they  observed  that  this 
principle  has  been  misused  by  some  NCAs,  which  have  used  it  as  a  means  to  impose 
stringent  conditions  of  equivalence  on  online  and  offline  sales  to  the  detriment  of 
consumers. This is all the more problematic given that the lack of equivalence between 
online  and  offline  criteria  amounts  to  a  hardcore  restriction,  which  creates  major  legal 
uncertainty  for  businesses  in  view  of  the  objective  differences  between  the  two  sales 
environments.  

interaction, 

In  contrast,  other  stakeholders  such  as  the  participants  in  the  workshop  defended  the 
effectiveness  of  the  principle  of  equivalence  with  regard  to  qualitative  and  quantitative 
selection  criteria  applicable  to  all  distribution  channels,  including  marketplaces.  They 
argued  that  the  equivalence  principle  benefits  consumers  by  resulting  in  more 
competition  and  choice,  as  well  as  better  access  to  a  variety  of  distribution  channels, 
while protecting product quality and integrity. They considered that the ability of retailers 
to  freely  choose  their  distribution  channels  in  the  context  of  selective  distribution  also 
benefited consumers. 

Moreover,  some  respondents  to  the  public  consultation,  mainly  retailers  and  online 
players,  and  some  NCAs  pointed  out  that  the  Vertical  Guidelines  do  not  explain  and 
illustrate  sufficiently  clearly  when  the  difference  between  the  criteria  applied  to  online 
and  offline  sales  would  amount  to  a  hardcore  restriction.  They  also  argued  that  further 
clarifications are needed to ensure that suppliers do not impose online sales restrictions 
that  go  beyond  the  requirements  imposed  for  offline  sales,  such  as  the  imposition  of 
marketplace bans for online sales, while at the same time allowing offline retailers to sell 
in  non-branded  sections  of  offline  stores.  They  further  explained  that  the  Vertical 

202 

 
 
 
 
 
Guidelines lack a clear list of examples illustrating the implementation of the equivalence 
principle, as well as a clarification on whether the equivalence principle only applies to 
selective distribution or also to other distribution models. 

Some respondents pointed to the fact that even within the online sales environment there 
are major differences  across the different  online sales channels, which require different 
sets  of  criteria.  By  way  of  example,  they  referred  to  sales  on  third-party  online 
marketplaces and the specificities of this distribution channel such as the rules on product 
reviews  and 
listings, 
logistics/fulfilment. 

search  placement,  winning 

the  buy  box,  customer 

The evaluation study showed that the effectiveness of the equivalence principle needs to 
be assessed  against the  new retail  landscape. The evaluation  study found that the retail 
landscape has changed dramatically over the last ten years as a result of new technologies 
and  accelerated  digitalisation.  Technological  developments  have  notably  changed 
consumer behaviour and expectations. Today’s consumer journey is a fluid omni-channel 
process  whereby  consumers  can  switch  easily  within  the  online  channel  (e.g.  between 
online  retailers  and  online  platforms),  between  online  and  offline  channels,  and  within 
the  offline  channel  (i.e.  between  different  physical  stores),  as  well  as  between  mono-
brand  and  multi-brand  distributors.  Consumers  therefore  expect  to  have  a  continuous 
omni-channel experience when shopping for a particular product or service. In response 
to  this  change  in  consumer  behaviour  and  in  order  to  meet  consumer  expectations, 
businesses  aim  at  creating  seamless  omni-channel  environments  to  allow  for  the 
optimisation  of  consumer  choice  and  a  high-quality  brand  experience.  The  evaluation 
study  reported  that  these  developments  have  driven  brand  owners  to  cooperate  more 
closely with wholesalers and retailers in the context of selective distribution networks in 
order to better serve consumers. Hence, differently from the past when there was a desire 
to exclude online players and notably online platforms from access to branded products, 
many  suppliers  are  nowadays  focusing  their  strategy  on  protecting  the  value  of  their 
products, while ensuring a seamless omni-channel sales environment. Suppliers therefore 
aim,  to  the  extent  possible,  at  setting  standards  that  must  be  used  in  all  types  of 
distribution  channel,  be  it  online  or  offline.  Where  the  requested  criteria  cannot  all  be 
fulfilled by online players, the requirements are sometimes adapted to fit online business 
models.224 

Fifth,  paragraph  176  of  the  Vertical  Guidelines  is  perceived  as  not  providing 
sufficient legal certainty in relation to the possibility to withdraw the benefit of the 
VBER in certain cases. A respondent to the public consultation mentioned that although 

224  See section 4.3.1 of the evaluation study. 

203 

 
 
 
 
 
                                                           
withdrawals  are  used  very  exceptionally,  the  wording  of  the  provision,  which  links  the 
possibility  of  withdrawal  to  the  characteristics  of  the  product  concerned  and  the  brick-
and-mortar requirement creates uncertainties. 

Sixth,  the  evidence  gathered  during  the  evaluation  indicated  a  lack  of  effectiveness  of 
the  withdrawal  procedure  in  the  context  of  cumulative  effects  resulting  from 
parallel selective distribution networks, as explained in paragraph 179 of the Vertical 
Guidelines. 

A  respondent,  who  is  a  pure  online  player,  highlighted  that  the  analysis  set  out  in 
paragraph  179  of  the  Vertical  Guidelines  would  lead  to  false  positives,  thus  allowing 
selective  distribution  systems  with  anti-competitive  effects  to  benefit  from  the  VBER. 
The  respondent  argued  that  a  broad  use  of  selective  distribution  (by  large  and  small 
suppliers)  below  the  threshold  of  50%  as  of  which  cumulative  effects  are  considered 
likely to arise could still be problematic for pure online players because suppliers using 
selective distribution are more likely to refuse access to their distribution network to such 
players.  Exempting  such  agreements  despite  the  resulting  foreclosure  of  pure  players 
creates negative effects for competition and eventually consumers. 

Similarly,  NCAs  argued  that  selective  distribution  systems  benefiting  from  the  VBER 
despite  having  effects  on  competition  that  are  incompatible  with  Article  101(3)  of  the 
Treaty can only be captured through the individual withdrawal of the exemption pursuant 
to Article 29 of Council Regulation 1/2003. This withdrawal mechanism has however in 
practice not proven to be an effective tool to tackle such situations. 

Seventh,  the  evidence  gathered  during  the  evaluation  indicated  perceived  lack  of 
guidance  on  the  assessment  of  certain  restrictions  on  sales  through  third-party 
online marketplaces and need to update the rules in light of recent case law.  

Stakeholders  pointed  unanimously  to  the  importance  of  having  clear  guidance  on  this 
aspect  and  of  updating  the  VBER  and  the  Vertical  Guidelines  in  light  of  the  landmark 
Coty judgement.225 The evaluation study confirmed this necessity. 

225  Judgment of 6 December 2017 in Case C-230/16, EU:C:2017:941, Coty Germany GmbH v Parfümerie 
Akzente  GmbH.  In  this  judgment,  the  Court  of  Justice  confirmed  that  selective  distribution  systems 
designed  to  preserve  the  luxury  image  of  products  can  comply  with  Article  101(1)  of  the  Treaty. 
Analysis  of  whether  or  not  a  marketplace  ban  in  a  selective  distribution  agreement  escapes  the 
application  of  Article  101(1)  of  the  Treaty  must  be  based  on  the  so-called  Metro-criteria.  Even  if 
marketplace  bans  were  to  restrict  competition  in  individual  cases,  they  do  not  constitute  a  hardcore 
restriction under Articles 4 b) or 4 c) of the VBER. 

204 

 
 
 
 
 
                                                           
However,  the  evaluation  showed  that  stakeholders  have  different  interpretations  of  the 
Coty  judgment,  notably  in  relation  to  the  applicability  of  the  judgment  beyond  luxury 
goods.  The  evaluation  study  confirmed  this  uncertainty,  pointing  out  that  it  is  still  not 
clear to what extent the permissibility of marketplace bans is limited to specific types of 
products and whether it also affects sales via the authorised distributors’ own websites. 

In this context, it is worth mentioning that, following the Coty judgment, as reported in 
section 4.1.6 above, a Competition policy brief on the application of the EU competition 
rules  to  marketplace  bans  was  issued.  The  policy  brief  provides  a  common  point  of 
reference to stakeholders in the Member States on how to apply Article 101 of the Treaty 
to a prohibition by a supplier on the use of third-party marketplaces by its distributors. 

Eighth,  the  evaluation  pointed  to  discrepancies  in  the  assessment  by  NCAs  of  some 
restrictions on the use of online marketplaces. 

NCAs  indicated  diverging  opinions  on  this  specific  type  of  restriction.  Some  NCAs 
consider  that  the  protection  of  a  supplier's  brand  image,  which  is  often  raised  as  a 
justification for platform bans, may actually be used as a pretext to reduce the number of 
online sellers for a particular product or service and to avoid price transparency and price 
competition, which can significantly impair the business opportunities of distributors and 
consumer  choice.  Therefore,  online  platform  bans  should  be  considered  a  hardcore 
restriction  under  the  VBER.  Other  NCAs  favour  a  case-by-case  analysis  in  order  to 
evaluate whether such a restriction could be objectively justified in a particular case.  

Irrespective  of  the  above,  the  NCAs  consider  that  more  guidance  is  needed  on  the 
compatibility of online platform bans with Article 101 of the Treaty. Some NCAs argue 
that there is no evidence that online marketplaces as such would have an impact on the 
quality  of  distribution.  Therefore,  not  quality-based  per  se  bans  of  online  marketplaces 
should  not  benefit  from  the  VBER,  but  rather  be  subject  to  an  individual  assessment 
under  Article  101(3)  of  the  Treaty.  Moreover,  in  order  to  determine  whether  an  online 
platform  ban  amounts  to  a  restriction  on  sales  to  a  specific  customer  group  (i.e.  a 
hardcore restriction under Article 4(b) of the VBER) or rather a restriction on the use of 
one available (online) distribution channel (i.e. not a hardcore restriction), it is not clear 
whether it is possible to  take into account the market structure, since the role of online 
platforms and other intermediaries may differ between Member States. 

Respondents  to  the  public  consultation  also  expressed  different  views  regarding  the 
treatment of this type of restriction. Some respondents argued that marketplace bans are 
necessary  to  protect  the  brand  image  and  the  quality  of  the  product  concerned.  Other 
respondents  argued  the  opposite,  stressing  that  online  platforms  including  online 
marketplaces  are  an  important  entry  point  for  consumers,  which  strengthens  market 
integration and promotes the visibility of small and medium-sized companies that do not 

205 

 
 
 
 
 
have the financial means to develop their own website, including the necessary logistics 
and  post-sales  services,  nor  the  technical  and  marketing  knowledge  to  increase  their 
visibility  through  other  means.  They  therefore  concluded  that  online  marketplace  bans 
can have a significant impact on competition to the detriment of consumers.  

One  respondent  to  the  public  consultation  reported  that  the  debate  about  the 
permissibility of this type of restriction should be based on a proper definition of third-
party  online  platforms  including  online  marketplaces,  which  is  neither  provided  by  the 
VBER nor by the Vertical Guidelines. 

Ninth, the evaluation found that a large number of stakeholders, including respondents to 
the public consultation, participants in the workshop and NCAs, and the evaluation study 
pointed unanimously to a lack of guidance on the assessment of restrictions on the use 
of price comparison websites. 

NCAs  reported  a  lack  of  guidance  on  how  to  qualify  prohibitions  on  the  use  of  price 
comparison websites and the extent to which the assessment of such provisions should be 
different  from  the  approach  applied  to  online  platform  bans.  They  noted  that  price 
comparison  websites  normally  re-direct  consumers  to  the  website  of  the  seller,  where 
they  can  complete  the  transaction.  As  a  result,  a  restriction  on  the  use  of  price 
comparison  websites  by  distributors  in  the  context  of  a  selective  distribution  system 
appears less justified than an online platform ban. This is because final customers carry 
out  the  transaction  on  the  website  of  the  authorised  distributors,  which  have  been 
accepted by the supplier as meeting the quality criteria required. Therefore, an absolute 
restriction  on  the  use  of  price  comparison  websites  that  is  not  linked  to  any  quality 
criteria should constitute a hardcore restriction under Articles 4(b) and 4(c) of the VBER. 

Participants  in  the  workshop  unanimously  concluded  that  there  was  uncertainty  as  to 
whether restrictions on the use of price comparison websites could amount to a hardcore 
restriction. There was however no agreement on the assessment of these restrictions and 
whether they would be beneficial to consumers. 

Participants  in  the  workshop  and  the  evaluation  study  pointed  to  the  importance  of 
assessing this restriction in the context of the new retail landscape. As described above in 
this  section,  participants  in  the  workshop  referred  to  the  current  "omni-channel  world" 
where consumers benefit from the fact that products are available anywhere at any time 
through  their  preferred  channel,  taking  account  of  new  consumption  habits.  The 
evaluation  study  equally  recognised  the  emergence  of  an  omni-channel  approach 
whereby consumers change easily within the online channel (e.g. between online retailers 

206 

 
 
 
 
 
and  online  platforms),  between  online  and  offline  channels,  and  within  the  offline 
channel  (i.e.  between  different  physical  stores),  as  well  as  between  mono-brand  and 
multi-brand distributors.226 

Some respondents to the public consultation also pointed to a lack of clarity as to whether 
this type of restriction amounts to a hardcore restriction under Article 4(b) and 4(c) of the 
VBER and, if so, under which conditions. 

Finally, the evaluation study and the respondents to the public consultation pointed to the 
need to take into account recent case law, notably the decision of the German NCA in the 
Asics case.227 

4.6.7.  Other online sales restrictions  

Paragraphs 52 to 54 and 56 of the Vertical Guidelines provide guidance on the use of the 
internet and the framework of analysis applied to certain online sales restrictions.  

Paragraph  52  of  the  Vertical  Guidelines  states  that  the  "internet  is  a  powerful  tool  to 
reach  a  greater  number  and  variety  of  customers  than  by  more  traditional  sales 
methods". Through the internet, a distributor can extend its reach beyond its territory of 
operation  and  the  customer  groups  it  serves.  Therefore,  all  distributors  should,  in 
principle, be allowed to use the internet to sell products and services. Selling products or 
services  through  a  website  is,  in  general,  considered  a  form  of  passive  selling.  The 
underlying  idea  is  that  easy  access  for  the  customer  to  the  distributor’s  website  stems 
from the simple use of the internet by the customer and not from proactive action on the 
part  of  the  distributor  aimed  at  approaching  the  customer.  The  paragraph  also  explains 
that if a consumer visit to a website results  in a sale, this is considered passive selling, 
irrespective of the language option offered on the website.  

Under the VBER, the same rules apply to online and offline sales. Therefore, restrictions 
on the use of the internet that limit "the territory into which, or the customers to whom" 
the distributor can sell are considered hardcore restrictions pursuant to Article 4(b) of the 
VBER.  This  includes  restrictions  of  passive  sales  by  exclusive  distributors,  whereas 

226  See section 4.3.1 of the evaluation study. 
227  Decision 
26 
B2-98/11 

of 

August 
https://www.bundeskartellamt.de/SharedDocs/Entscheidung/EN/Fallberichte/Kartellverbot/2016/B2-
98-11.pdf?__blob=publicationFile&v=2. In this decision, the German NCA found that the prohibition 
on  allowing  a  third  party  to  use  the  ASICS  brand  names  in  any  form  on  the  third  party’s  website  in 
order  to  guide  customers  to  the  website  of  the  authorised  ASICS  retailer  and  the  prohibition  on  the 
support  of  price  comparison  engines  through  setting  up  application-specific  interfaces  constituted 
restrictions of competition by object in breach of Article 101(1) of the Treaty. 

summary 

available 

2015; 

at: 

207 

 
 
 
 
 
                                                           
active  sales  restrictions  protecting  an  exclusively  allocated  territory  or  customer  group 
are allowed pursuant to Article 4(b)(i) of the VBER. Also restrictions on the ability of an 
authorised distributor to actively or passively sell to end users and to other members of a 
selective distribution system are considered hardcore restrictions pursuant to Articles 4(c) 
and (d) of the VBER, respectively.  

Paragraphs 52(a) to (d) of the Vertical Guidelines provide further guidance and examples 
on restrictions on the use of the internet  that are considered hardcore restrictions  under 
the VBER. Paragraph 53 of the Vertical Guidelines provides guidance on the distinction 
between  active  sales  (i.e.  when  a  distributor  actively  approaches  certain  customers  or 
certain customer groups) and passive sales (i.e. when a distributor responds to unsolicited 
requests  from  customers)  in  the  online  context  and  thus  on  the  compatibility  of  certain 
restrictions  with  the  VBER.  Paragraph  54  of  the  Vertical  Guidelines  explains  the 
equivalence  principle,  which  is  meant  to  ensure  that  suppliers  do  not  dissuade 
distributors  from  selling  online  by  applying  criteria  to  online  sales  that  are  not  overall 
equivalent to those applied to offline sales (see section 4.6.6 above). 

The evaluation indicated that the assessment of some online restrictions is one of the 
areas in which the VBER and the Vertical Guidelines are perceived to lack clarity 
and not be up to date in light of the market developments  since the adoption of the 
VBER.  

A majority of the respondents to the public consultation (across all sectors and types of 
respondents)  indicated  that  the  level  of  legal  certainty  provided  by  the  VBER 
regarding certain types of online sales restrictions is slightly low or low.  

All  respondents  particularly  stressed  the  fact  that,  since  the  adoption  of  the  VBER  and 
the  Vertical  Guidelines,  the  development  of  online  sales  and  the  digitalisation  of  the 
economy have had a major impact on vertical relationships. 

This  was confirmed by the evaluation  study, which found that the  impact of increasing 
online sales on offline sales has been felt across all goods sectors, including those more 
resistant to a shift by consumers to online channels. Business interactions have changed, 
requiring  that  both  brand  owners  and  distributors  constantly  adapt  their  strategies  to 
rapidly  evolving  markets  conditions, 
from  new  online 
intermediaries.  

including  competition 

Also consumer behaviour has changed, with consumers nowadays expecting a seamless 
experience  throughout  their  purchasing  journey,  whether  offline,  online  or  using  both 
channels  in  combination.  In  this  respect,  the  evaluation  study  confirmed  that  the 
consumer journey is nowadays a fluid omni-channel process in which consumers change 
easily  within  the  online  channel  (i.e.  between  online  retailers  and  online  platforms), 

208 

 
 
 
 
 
between online and offline channels, within the offline channel and between mono-brand 
and  multi-brand  retailers. 228 The  study  on  consumer  purchasing  behaviour  pointed  to 
economic  literature,  which  further  explains  that  the  combination  of  several  distribution 
channels, especially online and offline has a positive impact on the quality perception of 
the consumer, on the decision to  purchase and on the consumer experience. The multi-
channel environment satisfies consumers’ shopping needs better, as they can choose the 
channels that are most convenient to them.  

Considering this context, the respondents to the public consultation noted that the current 
rules,  which  were  originally  meant  to  address  offline  restrictions,  are  not  sufficiently 
clear or do not provide enough guidance to assess restrictions linked to the development 
of  e-commerce,  notably  in  the  context  of  selective  distribution  systems.  Some 
respondents further explained that the fact that the VBER and the Vertical Guidelines are 
not fully adapted to the new e-commerce environment creates uncertainty regarding the 
treatment of online restrictions. Finally, some respondents indicated that the VBER and 
the  Vertical  Guidelines  are  not  up  to  date,  as  they  do  not  reflect  recent  case  law  and 
decisional  practice  by  the  Commission  and  the  NCAs  in  relation  to  online  restrictions. 
According to these respondents, the lack of clarity of the current rules in this regard and 
the  fact  that  they  are  outdated  lead  to  a  low  level  of  legal  certainty  and  increase 
compliance costs for businesses.  

In  addition,  a  majority  of  respondents  pointed  to  the  fact  that  the  current  rules  lead  to 
false negatives by excluding from the benefit of the block exemption online restrictions 
that  generate  efficiencies  in  line  with  Article  101(3)  of  the  Treaty  and  should  thus  be 
covered  by  the  VBER.  Even  more  respondents  expressed  similar  views  regarding  the 
Vertical Guidelines, which they do not consider to be adapted to the online environment. 
Notably,  they  do  not  take  into  account  the  fact  that  competition  nowadays  takes  place 
between  various  omni-channel  networks,  including  both  online  and  offline  channels, 
rather than between the offline channel, on the one hand, and the online channel, on the 
other  hand.  The  current  rules  neither  reflect  the  fact  that  the  increase  in  price 
transparency due to the use of the internet also increases competition on quality and leads 
suppliers to adapt their distribution strategy in order to protect their brand and reputation. 
Finally, for some respondents, the rules fail to take into account the fact that free-riding is 
bi-directional,  thus  not  only  concerning  free-riding  by  online  on  offline,  but  also  by 
offline  on  online.  The  study  on  consumer  purchasing  behaviour  points  to  consumer 
behaviour that is coherent with the existence of free-riding in both directions.  

228  See section 4.3.1 of the evaluation study. 

209 

 
 
 
 
 
                                                           
Similarly, a majority of the NCAs stressed the major impact that the massive growth of 
e-commerce during the last decade has had on distribution strategies and the challenges 
that  enforcers  face  when  applying  the  VBER  to  online  restrictions.  They  expressed  a 
need  for  clarifications  in  light  of  recent  market  developments  and  new  case  law 
concerning  online  sales  restrictions.  They  also  pointed  to  the  need  for  more  complete, 
coherent  and  up-to-date  guidance  regarding  specific  issues  such  as  online  sales 
restrictions  in  the  context  of  selective  distribution,  restrictions  on  the  use  of  online 
intermediaries and more generally on the assessment principles applicable to the online 
environment.  They  particularly  stressed  that  the  lack  of  appropriate  guidance  regarding 
online sales restrictions has led to inconsistencies in the application of the current rules in 
different Member States.  

The  views  expressed  in  some  roundtable  discussions  during  the  stakeholder  workshop 
reflected similar concerns and calls for the adaptation of the current rules in light of new 
market developments and recent case law.  

More specifically, stakeholders made general comments on how the VBER, together with 
the  Vertical  Guidelines,  address  issues  in  relation  to  online  sales  (see  section  4.6.7.1 
below).  They  also  commented  on  specific  online  restrictions  and  on  some  particular 
aspects of the analytical framework to be applied thereto, including the current approach 
to dual pricing practices (see section 4.6.7.2 below), the definition of active and passive 
sales and their application to online sales (see section 4.6.7.3 below) and the assessment 
of  restrictions  on  the  use  of  trademarks  and  brand  names  in  the  online  context  (see 
section 4.6.7.4 below).  

4.6.7.1.  General comments on the VBER and the Vertical Guidelines  

Some  respondents  to  the  public  consultation  noted  that  the  VBER  does  not  have  a 
dedicated section dealing with online sales, which reduces the legal certainty of Article 4 
of the VBER as regards these restrictions. Some respondents added that the assessment 
of online sales in the context of the rules on territorial restrictions is not appropriate and 
leads to legal uncertainty. Other respondents highlighted the fact that the VBER does not 
contain any provisions dealing explicitly with online sales by retailers.  

Some  respondents  to  the  public  consultation  noted  that  only  the  Vertical  Guidelines 
touch  upon  certain  internet  related  issues,  but  that  they  lack  precision  in  that  respect, 
which causes legal uncertainty. Moreover, they stressed that the Vertical Guidelines are 
not  binding  for  national  courts  and  national  competition  authorities.  Therefore,  there  is 
no  guarantee  that  internet  related  issues  will  be  dealt  with  in  a  coherent  manner 
throughout the EU.  

210 

 
 
 
 
 
4.6.7.2.  Dual pricing  

Stakeholders  identified  several  issues  regarding  the  treatment  of  dual  pricing  under  the 
VBER. Some of their comments focused on the lack of clarity of the rules, while others 
stressed  the  fact  that  some  aspects  of  the  prohibition  on  dual  pricing  are  either  not 
workable in practice or ineffective in view of recent market developments.  

First, some stakeholders stressed the lack of clarity of the rules relating to dual pricing 
in the Vertical Guidelines.  

Some  respondents  to  the  public  consultation  and  some  NCAs  pointed  out  that  it  is  not 
clear  whether  the  prohibition  of  dual  pricing  set  out  in  paragraph  52(d)  of  the  Vertical 
Guidelines only applies in cases where the same distributor has both online and offline 
operations  ("hybrid  distributor")  and  the  supplier  charges  the  distributor  different  net 
wholesale  prices  depending  on  the  sales  channel  used  or  whether  the  prohibition  also 
applies where suppliers charge different wholesale prices to pure offline and pure online 
distributors. 

Moreover,  some  respondents  to  the  public  consultation  noted  a  lack  of  clarity  as  to 
whether the rules laid down in the Vertical Guidelines differ from the views expressed by 
the  Commission  in  the  final  report  of  the  e-commerce  sector  inquiry,  which  states  that 
"[d]ual  pricing  for  one  and  the  same  (hybrid)  retailer  is  generally  considered  as  a 
hardcore restriction under the VBER", whereas "[c]harging different (wholesale) prices 
to different retailers is generally considered a normal part of the competitive process".  

Respondents to the public consultation pointed out that a clarification of the rules on dual 
pricing would avoid an inconsistent application throughout the EU. They indicated that 
some NCAs have adopted a very strict position on dual pricing. Some of them consider 
that the granting of discounts to pure offline retailers for services rendered in brick-and-
mortar  shops  (e.g.  reserving  shelf  space  for  certain  products  of  a  particular  supplier) 
constitutes an illegal dual pricing policy, as it creates a structural disadvantage for pure 
online  retailers  which  cannot  benefit  from  these  discounts.  In  contrast,  other  NCAs 
accepted  that  suppliers  grant  different  commercial  conditions  to  different  types  of 
retailers.  

A few NCAs also pointed to different approaches at national level regarding online price 
discrimination. While some NCAs have adopted  a very strict interpretation of the rules 
and  consider  that  pure  online  players  should  be  offered  the  same  price  as  all  other 
distributors, other NCAs have a more empirical approach and consider that the effects of 
any such practice should be assessed to determine their compatibility with the VBER and 
Article 101 of the Treaty. The evaluation study also mentioned a national case that went 
beyond the prohibition on suppliers to discriminate between the online and offline sales 

211 

 
 
 
 
 
channels of hybrid retailers, as the NCA qualified as a hardcore restriction differences in 
price  applied  to  pure  online  and  pure  offline  distributors.  Against  this  backdrop,  the 
evaluation  study  suggested  that  there  is  a  lack  of  clarity  in  the  Vertical  Guidelines 
regarding the rules on dual pricing.  

Some NCAs also stressed a lack of clarity as to whether paragraph 52(d) of the Vertical 
Guidelines  applies  to  all  types  of  distribution  systems  or  only  to  selective  distribution. 
They noted that the latter approach would likely create a loophole, allowing suppliers to 
impose more restrictions on their distributors when selective distribution is in place.  

Second,  for  some  stakeholders,  specific  aspects  of  the  approach  to  dual  pricing  are 
either  not  workable  in  practice  or  no  longer  adapted  to  the  current  market 
environment due to new market developments over the last years. 

Respondents  to  the  public  consultation  (mainly  suppliers,  lawyers  and  associations  of 
lawyers)  consider  the  current  approach  to  dual  pricing  not  well  adapted  to  the  current 
market environment for the following reasons.  

Some  respondents  to  the  public  consultation  explained  that  market  conditions  have 
drastically changed since the adoption of the VBER and the Vertical Guidelines. These 
respondents  consider  that  e-commerce  has  become  ubiquitous  and  the  online  sales 
channel, in which some players have grown in size, may no longer need protection. On 
the contrary, it is now rather the brick-and-mortar channel, which incurs higher costs than 
online resellers, that needs to  be protected  against  free-riding by  online  sellers on their 
pre-sales  efforts  and  investments.  Moreover,  the  underlying  logic  of  the  Vertical 
Guidelines  on  dual  pricing,  which  only  allows  suppliers  to  apply  different  wholesale 
prices  to  pure  online  players  and  pure  offline  players,  is  not  in  line  with  the  current 
commercial  trend,  which  aims  to  provide  an  omni-channel  experience  to  consumers. 
Most  retailers  therefore  offer  both  online  and  offline  services  to  meet  the  consumer 
expectation of a seamless experience throughout the purchasing journey. This means that 
nowadays only few retailers are exclusively present in a physical environment. 

In view of these changes, some respondents (mainly suppliers) argued that dual pricing 
should  be  withdrawn  from  the  list  of  hardcore  restrictions.  They  explained  that  the 
current rules deprive brand owners of the flexibility they need to incentivise and reward 
their  hybrid  distributors  for  their  investments  and  efforts  to  provide  consumers  with  a 
physical  product  experience,  as  well  as  advice  and  service  from  well-trained  staff  at 
brick-and-mortar stores. In their view, the current approach can even disincentivise high-
service retailers from continuing to invest in high-quality services provided in their brick-
and-mortar  stores.  They  consider  that  brand  owners  should  have  the  flexibility  to  offer 
hybrid  retailers  a  specific  discount  for  products  that  are  sold  in-store  to  support  their 
related  sales  efforts  and  investments.  According  to  them,  this  would  be  even  more 

212 

 
 
 
 
 
justified for vertical agreements covered by the VBER, as it is highly unlikely that dual 
pricing by a supplier with a market share below 30% could limit competition, where the 
retailer’s market share is also below 30%. Moreover, in markets with strong inter-brand 
competition,  dual  pricing  would  not  allow  the  supplier  to  increase  the  price  for  its 
products above competitive levels.  

A few respondents to the public consultation also noted that paragraph 64 of the Vertical 
Guidelines  seems  to  indicate  that  dual  pricing  can  only  be  justified  when  online  sales 
lead  to  substantially  higher  costs  for  the  supplier.  However,  this  does  not  address  the 
issue that  also  hybrid retailers face significant costs in  operating their brick-and-mortar 
stores  due  to  costs  related  to  e.g.  store  rental,  training  of  staff  and  investments  in  the 
attractiveness  of  the  store.  They  argued  that  in  order  to  incentivise  hybrid  retailers  to 
keep investing in customer experience and services, while maintaining an attractive price 
level,  brand  owners  must  be  able  to  remunerate  those  hybrid  retailers  for  their 
investments. 

Other  respondents  to  the  public  consultation  stressed  the  fact  that  the  rules  on  dual 
pricing create unjustified discrimination between different types of retailers. Pure online 
players consider that they are being discriminated against, as they face higher wholesale 
prices  than  offline  players,  without  any  justification  since  they  also  make  considerable 
efforts  to  create  a  quality-based  environment.  In  contrast,  hybrid  retailers  consider  that 
they  are  put  at  a  disadvantage  compared  to  pure  offline  players  since  they  cannot  be 
rewarded  for  their  efforts  and  investments  in  high-quality  in-store  services.  As  hybrid 
retailers compete directly  with  pure online retailers  and pure brick-and-mortar retailers, 
suppliers should be able to treat them in the same way. 

Some  participants  to  the  workshop  expressed  similar  views  on  the  current  approach  to 
dual pricing. They also considered that it does not reflect current business needs and does 
not support value-added services and the investments they require in a fair manner. For 
them, a change of approach would ensure fairness,  flexibility and differentiation across 
all  sales  channels.  It  would  provide  consumers  with  more  choice  and  better  quality, 
ensure the availability of a multi-channel environment in the long run and allow for the 
provision of pre-sales and after-sales services in all sales channels. For other participants, 
it would also preserve brick-and-mortar networks. 

Some NCAs expressed diverging views on the effects that the growth of online sales has 
had  on  brick-and-mortar  stores.  Some  of  them  recognised  that  brick-and-mortar  stores 
have difficulties competing with online stores, given the significant investments required 
for offline sales. They argued that allowing suppliers to differentiate net wholesale prices 
between offline and online sales in such situations could be justified from an economic 
point of view and correspond to the public interest, which they considered would mean 

213 

 
 
 
 
 
that  dual  pricing  may  have  to  be  dropped  from  the  list  of  hardcore  restrictions.  In 
contrast, other NCAs indicated that dual pricing may have a similar effect as total online 
sales bans, since they can incentivise hybrid retailers to reduce their online sales, which 
would justify maintaining the current hardcore approach to dual pricing. 

Third,  there  is  a  consensus  among  the  respondents  to  the  public  consultation  that  have 
commented on dual pricing (suppliers, retailers and associations of undertakings) that the 
fixed fee that a supplier can offer to support the (offline or online) sales efforts of a 
distributor is not  workable  in  practice. They however pointed out that this provision 
shows that it is considered acceptable to support a distributor’s sales efforts. Respondents 
further  explained  that  applying  the  same  fee  to  all  distributors  hardly  makes  sense  in 
view of the diversity of their situations (notably with regard to the costs they incur) and 
the difference in market conditions (notably depending on their location). As regards the 
latter,  for  instance,  a  certain  fixed  fee  could  represent  a  small  amount  for  a  reseller 
located in a city centre, while being significant for a reseller located in a rural area. They 
further  argued that  it is  impracticable  for brand owners to  apply a different  fee to  each 
distributor, as it would require fixing a fee every year for each of their retailers, or even 
every point of sale, in order to determine the investments to be offset in relation to the 
sales effort made. Such a system is too expensive and burdensome to be put in place.  

In  view  of  the  above,  some  stakeholders  suggested  that  other  fair  measures  of 
remuneration should be used to incentivise hybrid retailers to invest in brick-and-mortar 
shops and reward high-quality services such as a percentage of the actual sales made by 
the retailer or a different  volume related discount for sales realised in  brick-and-mortar 
stores. Other respondents added that variable fees or discounts could  allow suppliers to 
support brick-and-mortar sales insofar as congruent or equivalent sales efforts in online 
and  offline  trade  are  taken  into  consideration,  which  would  ensure  that  no  distribution 
channel gets an undue advantage without objective justification.  

Fourth,  some  NCAs  raised  several  other  issues  in  relation  to  dual  pricing.  They 
indicated  that,  according  to  paragraph  601  of  the  Staff  working  document  to  the  e-
commerce  sector  inquiry,  efficiency  justifications  could  be  considered  under  Article 
101(3) of the Treaty notably "where it can be shown that a dual pricing arrangement is 
indispensable to address free-riding between offline and online sales channels in the case 
of hybrid retailers that are part of the distribution" system. 229 They highlighted that the 
Vertical Guidelines do not provide guidance on the criteria that could be used to perform 

229  Commission  staff  working  document  accompanying  the  final  report  from  the  Commission  to  the 
Council and the European Parliament on the E-commerce Sector Inquiry, 10 May 2017, Brussels, SWD 
(2017) 154 final. 

214 

 
 
 
 
 
                                                           
such  an  individual  assessment.  Moreover,  more  guidance  is  required  regarding 
acceptable  alternatives  to  a  fixed  fee  for  remunerating  specific  services  offered  by 
physical stores. Finally, they also pointed to the fact that the current rules do not contain 
guidance on online price discrimination. 

4.6.7.3.  Definition of active and passive sales in the context of online sales 

and online marketing  

Some stakeholders provided comments  on the definition of active and passive sales, as 
set out in paragraph 51 of the Vertical Guidelines. While they recognise the importance 
of this distinction for the assessment of both exclusive and selective distribution systems, 
stakeholders  stressed  the  fact  that  the  current  distinction  lacks  clarity  and  should  be 
adapted  to  reflect  new  market  developments.  Moreover,  any  adaptation  of  the  Vertical 
Guidelines  should  be  taken  into  account  in  the  interpretation  of  the  Geo-blocking 
Regulation,  which  refers  to  the  notion  of  passive  sales  as  defined  in  the  Vertical 
Guidelines.  

First, some respondents to the public consultation stressed that the distinction between 
active and passive sales is key to determining whether a restriction is considered as 
a  hardcore  restriction  under  the  VBER.  This  is  particularly  important  for  exclusive 
distribution  systems  where  only  active  sales  into  the  territory  or  to  the  customer  group 
allocated to another exclusive distributor can be restricted. Therefore, a clear distinction 
between active and passive sales for both the offline and the online sales environment is 
needed  to  secure  the  required  investments  by  distributors  and  to  incentivise  them  to 
launch new products in territories or for customer groups that are exclusively allocated to 
them. 

Second,  some  stakeholders  (including  some  respondents  to  the  public  consultation,  as 
well  as  some  participants  in  the  workshop)  stressed  the  lack  of  clarity  of  the  current 
distinction  between  active  and  passive  sales,  in  particular  in  the  context  of  online 
sales. 

Some  respondents  to  the  public  consultation  highlighted  the  fact  that  Article  2  of  the 
VBER  does not  contain  a definition of active and passive sales. They consider that the 
clarity  of  the  distinction  between  active  and  passive  sales  could  be  enhanced  if  this 
provision  were  to  include  definitions  of  these  notions.  The  VBER  could  define  active 
sales  as  "actively  approaching  individual  customers  or  actively  approaching  a  specific 
customer  group  or  customers  in  a  specific  territory  through  promotions  specifically 
targeted at that customer group or targeted at customers in that territory", and passive 
sales as "responding to unsolicited requests from individual customers including delivery 
of goods or services to such customers". 

215 

 
 
 
 
 
Some  respondents  to  the  public  consultation  also  consider  that  the  current  approach  of 
the  Vertical  Guidelines,  which  state  that  every  distributor  must  be  allowed  to  use  the 
internet  to  sell  products  or  services,  is  appropriate  to  prevent  manufacturers  and  brand 
owners from imposing online sales restrictions on independent retailers. In the same vein, 
according  to  the  respondents  to  the  public  consultation,  the  Vertical  Guidelines  also 
appropriately assume that  operating  a website is  a form  of passive selling and consider 
that  offering  different  language  options  on  a  website  or  even  using  a  national  domain 
name  does  not  in  itself  change  the  passive  nature  of  the  sales.  According  to  the  same 
respondents, to further clarify the scope of passive sales, the Vertical Guidelines should 
however specify that the definition of active sales provided by the case law on consumer 
rights, which suggests that a webpage accessible by customers located in another country 
or offering different language options can be seen as actively targeting those customers, 
is  irrelevant  for  the  purposes  of  a  competition  law  assessment.  Moreover,  some 
respondents to the public consultation noted that the Vertical Guidelines do not provide 
enough  examples  of  specific  online  practices  that  can  be  considered  active  or  passive 
selling.  In  particular,  some  respondents  pointed  to  a  lack  of  clarity  as  to  how  to  assess 
advertising  by  a  distributor  on  a  webpage  with  a  reference  to  the  territory  in  which  a 
specific customer is located (e.g. "/france" in the domain name).  

Some NCAs consider that distinguishing active from passive sales is one of the biggest 
challenges they face when applying the VBER to new types of online sales. According to 
them, the lack of clarity of the distinction  stems  from  the fact  that the VBER  does not 
provide a real definition of the two notions. They also noted that the Vertical Guidelines 
do  not  contain  enough  examples  of  online  sales  restrictions  and  that  the  examples 
provided  are  not  sufficiently  detailed  to  give  clear  guidance  on  the  distinction  between 
active and passive sales. 

Third,  some  stakeholders  consider  that  the  current  distinction  between  active  and 
passive sales is not working well and is not up to date with regard to the new digital 
interactivity resulting from the development of e-commerce.  

Some respondents to the public consultation pointed out that paragraph 52 of the Vertical 
Guidelines, which contains a presumption according to which transactions made over the 
internet are passive sales, is not functioning well, as it would no longer reflect business 
reality. Likewise, some participants in the workshop argued that this presumption would 
not reflect the reality of the digital economy and would fail to capture the business model 
of  digital  players.  Some  respondents  consider  that  website  operators  do  not  need  to 
promote themselves through direct campaigns in order to reach consumers. Operating a 
website  would  therefore  appear  as  an  active  approach  in  itself.  By  contrast,  other 
respondents  argued  that  operating  a  website  always  requires  that  its  owner  implements 
promotional  techniques  in  order  to  be  found  by  the  consumers  (e.g.  online  marketing 

216 

 
 
 
 
 
activities  through  social  media).  To  the  extent  that  such  promotional  techniques  would 
always  fall  into  the  definition  of  active  sales,  the  presumption  that  online  sales  are 
passive in nature would no longer be relevant.  

The evaluation study also reported on a perceived inadequate distinction between active 
and passive online sales.  It  further  explained that the  stakeholders interviewed disagree 
with  the  distinguishing  criteria  set  out  in  the  Vertical  Guidelines.  According  to  the 
evaluation study, some stakeholders pointed to the classification of specific online sales 
practices  as  being  problematic,  such  as  the  fact  that  having  a  translated  webpage  is 
classified as passive rather than active selling. Contrary to the definitions provided in the 
Vertical  Guidelines, these stakeholders view such practices as active selling. The study 
specified that this issue was  raised not  only by retailers  and distributors, who feel  their 
market position is undermined, but also by manufacturers, who experience a diminishing 
effectiveness  of  their  distribution  approach,  which  is  endangering  their  operation  in 
specific markets altogether. 

Some respondents to the public consultation argued that the presumption that online sales 
are passive sales is not suited to the current business reality. According to them,  only a 
case-by-case  analysis  would  enable  competition  authorities  to  grasp  the  complexity  of 
online sales and to properly assess their compatibility with competition rules. This case-
by-case  analysis  should  take  into  account  the  fact  that  active  sales  include  all  online 
marketing  activity  that  specifically  targets  individual  consumers,  consumer  groups  or 
specific territories, or any action directed towards a specific territory or customer group. 
In addition, they considered that a list of practices that may be considered as active sales 
could  be  provided  in  the  Vertical  Guidelines  (i.e.  using  a  country  extension  different 
from  the  one  of  the  Member  State  where  the  distributor  is  located  (such  as  ".fr"  for 
France or ".de" for Germany) and using specific languages for certain countries (except 
for English which is assumed to be understood by a large share of EU consumers).  

A  few  respondents  suggested  that,  if  the  provisions  on  passive  sales  in  the  Vertical 
Guidelines  were  to  remain  unchanged,  the  Vertical  Guidelines  should  identify  further 
circumstances  in  which  passive  sales  restrictions  would  likely  be  considered  as 
objectively justified. 

Fourth, other respondents consider that the prohibition  of passive  sales  restrictions  is 
too  strict  and  can  lead  to  false  negatives by excluding from the benefit of the VBER 
practices  that  would  be  efficiency-enhancing.  They  further  explained  that  the  current 
rules  can  prevent  businesses  from  implementing  certain  (limited)  passive  sales 
restrictions  that  would  enhance  the  efficiency  of  their  distribution  system  and  benefit 
consumers without any risk of limiting competition. However, this view is not shared by 

217 

 
 
 
 
 
all  stakeholders.  Notably  some  NCAs  consider  that  the  qualification  of  online 
transactions as passive sales should be maintained in the Vertical Guidelines. 

Finally  a  few  respondents  to  the  public  consultation  stressed  the  need  to  preserve 
coherence  between  EU  rules,  notably  between  the  VBER  and  the  Geo-blocking 
Regulation. 

4.6.7.4.  Restriction on the use of trademarks and brand names in the 

online context 

Some  stakeholders  also  expressed  a  need  for  clarifications  regarding  online  advertising 
and  more  specifically  the  use  of  trademarks  and  brand  names  in  the  context  of  online 
advertising.  

First,  stakeholders  expressed  a  need  for  more  guidance  as  regards  the  treatment  of 
restrictions on online advertising.  

Some respondents  to  the public consultation  expressed concerns that,  in  the absence of 
clear  guidance,  manufacturers  and  brand  owners  might  try  to  limit  the  ability  of  their 
retailers  to  use  online  advertising.  They  further  explained  that  in  order  to  trigger  sales 
through  a  retailer’s  website,  the  customer  first  has  to  find  and  reach  the  website.  This 
requires raising consumer awareness about the existence of the website at an early stage 
of  the  purchasing  process  through  targeted  advertising  campaigns  in  general  search 
engines  and/or  social  media.  It  also  requires  being  able  to  reach  a  potential  costumer 
through online advertising when he or she is looking for a specific product on a search 
engine. The evaluation study confirmed that advertising is an essential component of the 
customer  experience,  especially  in  the  digital  world,  where  it  is  often  the  first  contact 
point between the customer, the product and/or the brand concerned.  

The respondents considered that, without online advertising, the customer cannot find the 
website of a specific retailer at the critical moment of the purchasing process. Therefore, 
a prohibition of online advertising is de facto a prohibition of online sales. Consequently, 
they  argued  that  restrictions  on  online  advertising  should  be  considered  as  hardcore 
reasonable  quality 
the  exception  of  non-discriminatory  and 
restrictions,  with 
requirements.  

Some  NCAs  also  consider  that  further  guidance  is  needed  regarding  online  advertising 
restrictions.  Some  of  them  expressed  the  view  that  some  online  advertising  restrictions 
may de facto amount to a ban on online sales for smaller distributors. Consequently, they 
consider that such restrictions should be treated as a restriction of passive sales and thus a 
hardcore restriction under the VBER. 

218 

 
 
 
 
 
Second,  all  stakeholder  groups  highlighted  the  importance  of  using  trademarks  and 
brands names in the context of online advertising, but they also stressed that neither 
the VBER nor the Vertical Guidelines provide guidance in this regard. 

The  consumer  purchasing  study 230  indicated  that  search  engines  are  the  most  used 
channels  for  product  discovery  today.  The  keywords  used  when  searching  with  search 
engines give an indication of which information is important to consumers. According to 
the  study  results,  consumers  predominantly  use  keywords  containing  product  or  brand 
names,  or  product  descriptions  (keywords).  The  analysis  of  Google  Trend  data  yielded 
similar results. For several years now, consumers have been using more product-specific 
search  queries  compared  to  brand  or  retail  related  searches  for  almost  all  types  of 
products considered. It should be noted in this context that research via search engines is 
strongly  influenced  by  information  consumers  perceive  through  other  types  of  media 
(i.e. TV advertising, review sites or social networks). The study also indicated that search 
engine  advertisements  and  sponsored  links  affect  consumer  behaviour  in  the  ensuing 
purchasing stage.  

Moreover,  the  consumer  purchasing  study 231  showed  that  brand  names  can  play  a 
significant role for the search terms used by consumers. Some consumers tend to add a 
brand name to their search queries even if they are not aware of the product name when 
looking for a product or a service online or on e-commerce platforms. In this regard, the 
study referred to a research aiming at identifying the relation between the search engine 
queries  performed  by  the  consumers  online  with  brand  attitude.  As  per  the  findings  of 
this  research,  users  who  are  actively  looking  for  products  in  a  specific  category  of 
products have a high likelihood of searching with brand names in the search query. It is 
also  recognised  that  if  consumers  have  a  positive  attitude  towards  a  brand,  they  are 
highly likely to directly make a search query for that specific brand. This research also 
found  that  the  two  most  important  factors  that  contribute  to  the  increment  in  searching 
for  a  brand  are  the  familiarity  of  the  brand  among  consumers  and  the  level  of 
consideration  consumers  put  in  the  brand.  Finally,  it  also  identified  that  there  is  a 
significantly  increased  likelihood  for  a  consumer  to  make  a  search  query  for  a  specific 
brand if the customer already owns products from that particular brand. 

Furthermore,  the  consumer  purchasing  study 232  noted  that  businesses  are  developing 
complex brand bidding strategies to maximise sales revenues. On that particular matter, 
the  study  refers  to  a  recent  research  that  challenged  the  general  assumption  that  the 

230  See section 4 of the consumer purchasing study. 
231  See section 3.2.2.1.1 of the consumer purchasing study.  
232  See section 3.2.2.1.2 of the consumer purchasing study. 

219 

 
 
 
 
 
                                                           
highest  position  on  a  search  results  page  also  yields  the  maximum  sales  revenues. 
According  to  the  research,  in  the  short  term,  the  highest  overall  revenue  would  be 
obtained  by  bidding  for  the  third  rank  in  keyword  advertising  and  not  for  the  first 
position. However, the research also  indicated that  this result might  change in  the long 
run  if  all  advertisers  were  to  apply  the  same  strategy.  With  regard  to  brand  bidding 
strategies, the research indicated that search engine advertising costs drop at a faster rate 
than revenue and that brand bidding strategies should not focus on single keywords, but 
rather on a portfolio of keywords. 

In  addition,  several  NCAs 233 and  the  Commission 234 have  recently  dealt  with  brand-
bidding  restrictions  in  cases  or  policy  documents.  In  the  Guess  case,  the  Commission 
found that a ban on retailers bidding on the Guess brand name and trademark to obtain a 
better  position  in  Google  AdWords,  which  was  part  of  a  broader  strategy  aimed  at 
restricting trade between Member States, was an infringement of competition by object. 
This finding was based notably on the fact that, by restricting the ability of its retailers to 
bid  for  its  trademark,  Guess  aimed  to  maximise  sales  through  its  own  website  and  to 
reduce  its  advertising  costs.  Moreover,  in  the  Staff  Working  Document  on  the  e-
commerce  sector  inquiry, 235 the  Commission  emphasised  the  growing  importance  of 
online  advertising  and  indicated  that  restrictions  on  such  advertising  may  raise 
competition concerns if they restrict the effective use of the internet as a sales channel by 
limiting the ability of retailers to direct customers to their website. At the same time, the 
Commission indicated that restrictions on the ability of retailers to use the trademark and 

du 

and 

357 

12-A-20, 

commerce 

paragraphs 

électronique, 

233  See e.g. Avis de l'Autorité de la Concurrence française du 18 septembre 2012 relatif au fonctionnement 
358, 

concurrentiel 
https://www.autoritedelaconcurrence.fr/fr/avis/relatif-au-fonctionnement-concurrentiel-du-commerce-
electronique; Final report - Digital comparison tool, 27 September 2017, UK Competition and Market 
Authority, 
https://assets.publishing.service.gov.uk/media/59c93546e5274a77468120d6/digital-
comparison-tools-market-study-final-report.pdf;  Working  paper  -  Price  effects  of  non-brand  bidding 
agreements in the Dutch hotel sector, Stefan Haasbeek, Jan Sviták and Jan Tichem, June 7 June 2019, 
Netherlands 
Markets, 
https://www.acm.nl/sites/default/files/documents/2019-06/working-paper-acm-price-effects-of-search-
advertisement-restrictions.pdf. 
the 
Bundeskartellamt found that a prohibition on the use by an authorised retailer of the ASICS brand name 
in  any  form  on  the  retailer’s  website  in  order  to  guide  customers  to  the  website  was  a  hardcore 
restriction.  In  the  Adidas  decision  of  27  June  2014  (B3-137/12),  the  Bundeskartellamt  closed 
proceedings after the company amended its conditions for online sales of sports shoes to allow retailers 
authorised to sell its products to advertise those products with the help of search engine advertising. 

the  Asics  decision  of  26  August  2015 

(B2-98/11), 

Consumers 

Authority 

for 

In 

& 

234  See  Commission  press 

at 
https://ec.europa.eu/commission/presscorner/detail/en/IP_18_6844.  A  non-confidential  version  of  the 
prohibition decision is available on DG Competition's website. 
235  See paragraphs 632, 997 to 999 of the Staff Working Document.  

release  of  17  December  2018, 

IP  18/6844, 

available 

220 

 
 
 
 
 
                                                           
brand name of the manufacturer in the retailer’s own domain name can help to prevent 
confusion with the manufacturer’s website.  

Despite these decisions and reports, stakeholders consider that the way such advertising 
restrictions should be dealt with is unclear. In this regard, the evaluation study also found 
that there is a lack of clarity as regards the circumstances in which a prohibition of the 
use of brand names as keywords in search engine advertising may be justified. This lack 
of clarity detracts from the legal certainty provided by the rules. 

Moreover, there is no consensus among stakeholders on how such restrictions should be 
assessed.  According  to  some  NCAs,  brand-bidding  restrictions  require  a  case-by-case 
analysis  to  take  proper  account  of  the  specific  form  of  these  restrictions  and  their 
economic context. Participants in the workshop also stressed the lack of clarity about the 
assessment  of  restrictions  on  the  use  of  search  engines,  notably  with  regard  to  the 
question of whether they are considered hardcore restrictions under the VBER or whether 
they can be justified.  

Respondents to the public consultation expressed different views. For some of them, the 
classification  of  the  brand-bidding  restrictions  in  the  Guess  case  as  a  restriction  of 
competition  by  object  should  be  reflected  in  the  Vertical  Guidelines.  Conversely,  other 
respondents (mainly brand owners, associations of brand owners and lawyers) view the 
Guess  decision  as  case  and  fact  specific  and  see  a  need  for  clarifications  on  the 
circumstances in which brand-bidding restrictions can be block exempted or justified on 
a case-by-case basis.  

As regards the circumstances in which brand-bidding restrictions could be justified, 
some respondents to the public consultation pointed to a lack of clarity as to whether the 
principles  enshrined  in  the  Coty  judgment  also  apply  to  online  search  advertising 
restrictions.  If  this  were  to  be  the  case,  this  would  imply  that  online  brand-bidding 
restrictions  do  not  amount  to  a  prohibition  of  online  sales  when  they  pursue  legitimate 
objectives,  provided  that  they  are  not  applied  in  a  manner  that  goes  beyond  what  is 
necessary to achieve those objectives.  

Some respondents raised the question whether the protection of the brand image, which 
is based on a common identity, the reputation of the network, as well as the uniformity of 
the business concept applied, should be considered as legitimate objectives. According to 
them, pursuing such an objective can be justified, as brand owners, who invest heavily in 
the  promotion  of  their  products  and  the  protection  of  their  brand  image,  can  be 
legitimately  granted  more  flexibility  to  control  the  use  of  their  brand  as  a  keyword  on 
search engines. In the same way, some respondents argued that brand-bidding restrictions 
can be justified when the brand owner pursues a centralised online marketing strategy. 

221 

 
 
 
 
 
For  other  respondents  to  the  public  consultation,  there  is  a  need  for  clarification  as  to 
whether restrictions by the manufacturer on the use of keywords purchased by resellers 
could be justified to avoid a bidding war between the members of a selective distribution 
network,  which  could  lead  to  unnecessary  costs  and  predominantly  benefit  the  search 
engine operators. They argued that such a restriction could be justified and even be pro-
competitive  in  view  of  the  significant  cost  savings  that  would  result  from  the 
rationalisation  of  bidding  campaigns  and  considering  the  fact  that  this  would  prevent 
network members from cannibalising each other’s sales.  

Other  respondents  to  the  public  consultation  pointed  to  a  lack  of  clarity  as  to  whether 
competition  concerns  regarding  brand-bidding  restrictions  are  limited  to  possible 
foreclosure  effects,  which  arise  where  inter-brand  competition  is  weak  and  strong 
suppliers or retailers that hold market power can limit access to products or to important 
distribution channels. 

As regards the  type  of  restrictions  that  could  be  justified, several respondents to the 
public consultation pointed to a need for clarification as to whether brand owners could 
restrict  brand  bidding  for  a  particular  positioning  in  the  list  of  results  provided  by  a 
particular search engine. They argued that showing the link of brand owners at the top of 
the search results page could avoid confusion and therefore benefit consumers. 

According  to  other  respondents,  the  Commission  should  clarify  whether  it  can  be 
justified to prevent the purchase of only the trademark as a keyword by retailers, while 
allowing them to purchase a combination of keywords including the trademark and not 
preventing  them  from  using  trademarks  for  advertising  purposes  in  order  to  avoid 
confusion between brands and retailers.  

Some manufacturers also asked for more guidance on whether they can legitimately set a 
maximum  quantitative  limit  on  keyword  bids  by  resellers  in  order  to  avoid  excessive 
bidding wars, which harms both the brand and smaller retailers. 

Manufacturers  also  suggested  that  the  Vertical  Guidelines  should  clarify  under  what 
circumstances it would be possible to require distributors to give the supplier prior notice 
of  the  keywords  and  association  of  keywords  they  intend  to  use  for  the  purposes  of 
online  advertising.  According  to  these  manufacturers,  this  possibility  would  however 
raise the question of the interplay between competition law and trademark law, and the 
need for  guidance on  whether and  when a brand manufacturer can legitimately prevent 
the  use  of  its  brand  name  by  competitors  (i.e.  other  brands  or  its  own  authorised 
retailers), on the basis of its intellectual property rights. 

Finally,  manufacturers  note  that  clarifications  are  also  needed  as  to  whether  a 
manufacturer can monitor or limit the use of keywords or brands as domain names, and 

222 

 
 
 
 
 
which  compulsory  elements  the  brand  owner  may  require  authorised  distributors  to 
display in order to facilitate the identification of such authorised retailers for the benefit 
of consumers (e.g. the use of specific logos and trademarks). 

4.6.8.  Franchising  

Franchise agreements contain licences of intellectual property rights ("IPRs") relating in 
particular to trademarks or signs and know-how for the use and distribution of goods or 
services. In addition to the licence of IPRs, the franchisor usually provides the franchisee 
for  the  duration  of  the  vertical  agreement  with  commercial  or  technical  assistance.236 
Paragraphs 189-191 of the Vertical Guidelines explain how the VBER applies to vertical 
restrictions  contained  in  franchise  agreements.  The  coverage  by  the  VBER  of  the 
licensing of IPRs contained in franchise agreements is dealt with in paragraphs 24-46 of 
the Vertical  Guidelines,  which concern the scope of the VBER,  and Article 2(3)  of the 
VBER,  which  sets  out  under  which  conditions  the  block  exemption  applies  to  vertical 
agreements containing provisions related to IPRs.  

The evidence gathered during the evaluation indicates that a majority of the respondents 
to the public consultation consider that paragraphs 189-191 of the Vertical Guidelines 
provide  an  appropriate  level  of  legal  certainty.237 Nevertheless, a significant number 
of respondents (primarily legal professionals and some business associations representing 
the  franchise  sector)  considered  these  paragraphs  to  provide  a  lower  level  of  legal 
certainty,  but  only  a  few  respondents  stated  that  the  rules  on  franchising  should  be 
revised.  Similarly,  while  agreeing  that  these  provisions  are  generally  adequate,  NCAs 
also pointed to some aspects for which there is a lack of clarity. 

The  main  issues  raised  by  stakeholders  in  relation  to  the  treatment  of  franchise 
agreements under the VBER are the following: 

First, stakeholders raised the issue of the lack of a definition of franchising in the VBER. 
Respondents  to  the  public  consultation  argued  that  a  definition  of  franchising  in  the 
VBER  itself  would  be  useful  in  providing  a  harmonised  definition  at  EU  level  and  in 
distinguishing  this  type  of  distribution  from  other  distribution  models  such  as  selective 
and exclusive distribution. Respondents indicated that in the current rules, franchising is 
not adequately treated as a distinct type of distribution, whose fundamental specificity is 
the transfer of know-how, and which has overall a pro-competitive effect, as recognised 

236  Vertical Guidelines, paragraph 189. 
237  The views of the respondents as regards Article 2(3) of the VBER and the corresponding paragraphs of 

the Vertical Guidelines are assessed in more detail in section 4.2.3 above. 

223 

 
 
 
 
 
                                                           
by the CJEU in the Pronuptia judgment.238 They argued that, as a result, there is a lack of 
clarity  on  the  rules  that  apply  to  franchise  agreements  and  the  relationship  with  other 
distribution  models  such  as  selective  and  exclusive  distribution.  This  issue  was  also 
raised by participants in the stakeholder workshop. 

Second, respondents to the public consultation indicated that the definition of know-how 
in  the  VBER  is  not  in  line  with  the  definition  of  know-how  in  the  Directive  on  the 
protection  of  trade  secrets,  in  particular  as  regards  the  requirement  of  "substantiality", 
which  is  mentioned  in  the  VBER  but  not  in  the  Directive  on  the  protection  of  trade 
secrets. Respondents further argued that it is often difficult to distinguish clearly between 
know-how which is "significant" and know-how for which this is not the case, since the 
definition  in  the  VBER  does  not  provide  sufficient  guidance  on  how  to  understand  the 
concept  of  significance.  In  addition,  some  respondents  mentioned  that  the  notion  of 
"secret"  is  also  unclear  and  difficult  to  interpret,  as  there  are  often  parts  of  the 
franchisor’s  experience  that  are  public  knowledge,  while  the  combination  of  individual 
elements of the franchise system may nevertheless be secret. Respondents further pointed 
out that also this part of the definition of know-how in the VBER is not in line with the 
corresponding definition in the Directive on the protection of trade secrets. 

Third, as regards specific restrictions and their application to franchising, participants in 
the stakeholder workshop generally pointed to a lack of clear examples as to how specific 
vertical  restrictions  may  affect  both  franchisors  and  franchisees.  Respondents  to  the 
public  consultation  pointed  in  particular  to  a  lack  of  clarity  as  to  whether  territorial 
exclusivity is permissible under franchise models or whether franchising has to be treated 
the same way as selective distribution in this respect. Respondents also pointed to a lack 
of  clarity  on  permissible  online  resale  restrictions  on  franchisees.  In  particular, 
respondents indicated that it is unclear whether the principles set out by the CJEU in the 
Coty  judgment  also  apply  to  franchising.  In  this  regard,  some  respondents  argued  that 
franchisors  should  have  the  possibility  to  control  their  distribution  channels,  including 
the  right  to  prohibit  the  resale  of  their  products  by  their  franchisees  via  third-party 
platforms in order to better protect the identity and reputation of their franchise networks 
and  their  brand.  Respondents  also  argued  that  the  rules  should  clarify  that  in  some 
circumstances online search advertising restrictions are helpful to protect the brand image 
of a franchise system. Other respondents, however, argued that franchisees should remain 
free to  make  effective use of third-party online  marketing and sales channels,  provided 
that  no  damage  results  to  the  brand  and  reputation  of  the  franchisor.  This  includes  the 
possibility of bidding on the franchisor’s brand name in the context of online advertising. 

238  Judgment  of  28  January  1986  in  Case  161/84,  ECLI:EU:C:1986:41,  Pronuptia  de  Paris  GmbH  v 

Pronuptia de Paris Irmgard Schillgallis. 

224 

 
 
 
 
 
                                                           
Further clarity on these issues is therefore needed. In addition, where the franchisees play 
a role in the exploitation of the franchisor’s web shop, non-compete arrangements seem 
to be justified according to some respondents. However, the current rules are not clear on 
the extent to which such restrictions are permitted.  

Fourth,  as  regards  non-compete  obligations,  respondents  to  the  public  consultation, 
notably those representing franchisees, indicated that the threshold of 80% of the buyer’s 
total purchases of the contract goods or services pursuant to Article 1(1)(d) of the VBER 
is  artificial  and  not  workable  in  the  franchising  context.239 This  is  because,  in  practice, 
franchisees  will  typically  not  source  the  remaining  20%  from  another  supplier  for 
logistical  reasons.  Franchisors  are  aware  of  this  and  can  therefore  set  the  purchase 
obligations slightly below the 80% threshold, thus avoiding the characterisation as a non-
compete obligation, while achieving the same result in practice.  

Fifth,  respondents  also  indicated  that  the  VBER  and  Vertical  Guidelines  are  not 
sufficiently  clear as to  whether  and under which circumstances non-compete clauses  in 
franchise agreements may have the same duration as the franchise agreement itself. Some 
respondents also pointed to issues regarding post-term non-compete clauses, arguing that 
it is not justified for such clauses to be limited to one year, as well as to the premises and 
land from which the buyer has operated, rather than to the (broader) territory granted to 
the 
that  such  clauses  are 
respondents,  however,  argued 
disproportionate, even if limited to one year. These issues are assessed in more detail in 
section 4.6.4 above.  

franchisee.  Other 

Sixth, respondents also  pointed to issues regarding the  treatment of RPM as a hardcore 
restriction  in  the  context  of  franchise  agreements.  These  issues  are  assessed  in  more 
detail in section 4.6.1 above.  

Seventh,  respondents  to  the  public  consultation  also  raised  issues  with  regard  to  the 
market share thresholds in the context of franchising. Respondents argued that the market 
share  threshold  should  only  apply  to  the  franchisor  and/or  that  the  threshold  should  be 
higher than under the current rules (e.g. 40%). As to the market definition, they argued 
that when markets are defined locally, this may lead to an international franchise system 
being block exempted in one country but not in another, which is inefficient and hinders 
the development of a uniform franchise concept and strategy across the EU. 

Eighth,  respondents  also  mentioned  a  lack  of  clarity  in  the  VBER  and  Vertical 
Guidelines  as  regards  the  treatment  of  joint  purchasing  through  the  franchisor  and  the 

239  Article 1(1)(d) of the VBER defines a non-compete obligation as an obligation on the buyer to purchase 

from the supplier more than 80% of the buyer's total purchases of the contract goods or services. 

225 

 
 
 
 
 
                                                           
treatment of (vertical) information exchange in franchise systems, in particular as regards 
the need for ongoing business monitoring and benchmarking. 

Ninth,  NCAs  indicated  that  there  is  insufficient  legal  certainty  with  regard  to  the 
combination of franchising with exclusive distribution, which aims to grant an exclusive 
territory  to  a  particular  franchisee  and  is  very  common  in  practice.  In  particular,  the 
VBER does not provide guidance on the assessment and thus the legality of distribution 
systems that combine elements of exclusive distribution and franchising.  

4.6.9.  Other issues  

Stakeholders  also  made  comments  on  how  the  VBER,  together  with  the  Vertical 
Guidelines,  address  certain  substantive  issues  such  as  data  sharing  (see  section  4.6.9.1 
below),  aftermarkets  (see  section  4.6.9.2  below),  as  well  as  issues  related  to  the 
withdrawal and disapplication procedures (see section 4.6.9.3 below).  

4.6.9.1.  Data sharing  

Some respondents to the public consultation stressed the fact that  data  has  become  an 
essential  input  for  online  services,  production  processes,  logistics,  smart  products  and 
artificial intelligence. Given that data has a significant impact on their competitiveness, 
businesses  depend  on  timely  access  to  it.  Moreover,  according  to  these  respondents, 
data is critical to ensuring healthy inter-brand competition.  

More specifically, both suppliers and certain service providers increasingly ask retailers 
to  share  relevant  business  data  with  them.  These  include  data  on  market  dynamics  and 
trends  that  can  help  suppliers  to  optimise  product  innovation  and  logistics  (e.g.  which 
brands to sell in which quantities and with which promotional support). At the same time, 
some suppliers also try to obtain data on end customers and their purchasing behaviour, 
as well as retail prices and distribution strategies. Some of them also try to obtain data on 
the  retailers’  commercial  relationship  with  customers,  which  can  be  problematic  if  the 
supplier  competes  with  its  distributors  on  the  retail  market,  notably  through  its  online 
shop. In the same vein, some service providers also attempt to gain access to data on the 
interaction  of  end  customers  with  the  retailer’s  online  shop.  In  some  cases,  such  data 
access  is  part  of  the  service  they  provide  (for  instance,  when  the  service  provider 
conducts analysis for the retailer on consumer interaction with the online shop), while not 
being necessary for the service.  

Moreover, certain  marketplaces and pure online players are active not  only  as retailers, 
but also control search engines and other social networks, which allows them to collect 
and  analyse  large  amounts  of  data.  The  significant  amount  of  data  they  are  collecting 

226 

 
 
 
 
 
from  retailers  and  their  wide  customer  base  gives  them  a  significant  competitive 
advantage over brand manufacturers. 

In light of these developments, stakeholders indicated that there is a need to clarify the 
rules on data collection as well as information exchange in distribution agreements, 
including for dual distribution (see section 4.2.4 above). 

Respondents  to  the  public  consultation  explained  in  this  regard  that  extensive  data 
transfers  between  the  parties  to  a  vertical  agreement  can  increase  prices,  as  they  grant 
suppliers  and  service  providers  insights  into  the  retailers’  businesses,  enable  them  to 
reassess  the  value  of  their  products  or  services  for  the  specific  retailer  and  to  increase 
their prices accordingly (so-called "behavioural discrimination"). Therefore, they argued 
that contractual provisions on data transfer should not be block exempted. According to 
some  respondents,  the  Vertical  Guidelines  should  clarify  that  a  supplier  can  collect 
pricing  and  other  data  from  its  retailers  for  pro-competitive  reasons.  However,  the 
exemption  should not  apply to  information exchange which, due to  an underlying  anti-
competitive  intent,  clearly  restricts  competition.  According  to  other  respondents,  an 
exemption  under  the  VBER  should  be  limited  to  data  transfers  concerning  the  buyer’s 
business to the extent that it is necessary to improve the use, sale or resale of goods or 
services  by  the  buyer  or  its  customers.  Besides,  the  VBER  should  not  be  applicable  to 
data transfers that may have the same effect as non-compete obligations. 

In addition, some respondents to the public consultation stressed the importance of data 
sharing in the advertising sector. These respondents indicated that the French and the 
German  NCA  published  a  joint  report  on  big  data  and  its  implications  for  competition 
law  in  May  2016. 240  While  the  German  NCA  followed  up  on  the  report  with 
investigations in the social media sector, the French NCA initiated a sector inquiry into 
online display advertising. 241 The final report of the sector inquiry identifies Google and 
Facebook as the leading players in the online advertising sector. As regards data access 
and  data  sharing,  the  report  finds  that  vertical  integration  and  access  to  unrivalled 
volumes  of  data  provides  these  two  main  market  players  with  significant  competitive 
advantages over the other intermediaries active in the sector. More generally, the report 
describes  restrictions  on  the  ability  to  collect  and  access  data  as  practices  potentially 
detrimental to competition. In view of these findings, some respondents stressed the need 

240  Joint  paper  by  the  French  and  German  NCAs  on  competition  law  and  data  of  16  May  2016, 
https://www.bundeskartellamt.de/SharedDocs/Publikation/DE/Berichte/Big%20Data%20Papier.pdf?__
blob=publicationFile&v=2.  

241  Sector-specific investigation into online advertising of the French competition authority, 6 March 2018, 
https://www.autoritedelaconcurrence.fr/en/press-release/6-march-2018-sector-specific-investigation-
online-advertising. 

227 

 
 
 
 
 
                                                           
to  act  as  quickly  as  possible  when  addressing  potential  anti-competitive  advertising 
practices in digital markets. 

4.6.9.2.  Aftermarkets 

Article  4(e)  of  the  VBER  contains  an  aftermarket  related  hardcore  restriction  for 
practices preventing or restricting end users, independent repairers and service providers 
from obtaining spare parts directly from the manufacturer of these spare parts. Original 
equipment  manufacturers  ("OEMs"),  who  buy  such  parts  from  the  manufacturer  and 
incorporate  them  into  their  own  products,  may  however  require  their  own  repair  and 
service  networks  to  buy  spare  parts  directly  from  them.  Paragraph  59  of  the  Vertical 
Guidelines contains further guidance on this provision. 

The  evidence  gathered  during  the  evaluation  indicates  that  a  large  majority  of 
stakeholders  (both  respondents  to  the  public  consultation  and  NCAs)  consider  that 
Article  4(e)  of  the  VBER  is  working  well.  Nevertheless,  a  few  respondents  to  the 
public  consultation  pointed  to  some  issues  such  as  a  lack  of  clarity  with  regard  to 
certain elements of the provision and some difficulties linked to its application.  

First,  as  regards  the  lack  of  clarity  of  Article  4(e)  of  the  VBER,  a  few  respondents 
indicated  that  the  distinction  between  spare  parts  and  components  is  not  explained. 
Moreover,  the  fact  that  guidance  regarding  spare  parts  related  restrictions  is  scattered 
between  Article  4(b)(iv)  and  Article  4(e)  of  the  VBER  makes  it  difficult  to  understand 
the  rules.  A  few  other  respondents  stressed  that  the  Vertical  Guidelines  are  not 
sufficiently clear on the possibility to apply Article 4(e) of the VBER also in the context 
of  specific  distribution  systems  (i.e.  exclusive  or  selective  distribution)  and  how  this 
provision  is  applied  to  products  for  which  quality  and  safety  are  essential.  More 
specifically,  the  Vertical  Guidelines  do  not  specify  whether,  in  a  selective  distribution 
system,  spare  parts  can  only  be  purchased  from  authorised  sources.  They  explain  that 
such a restriction could be justified to guarantee the quality and safety of the product and 
to avoid problems linked to the use of counterfeit spare parts.  

Second,  some  respondents  to  the  public  consultation  stressed  that  Article  4(e)  of  the 
VBER  is  difficult  to  apply  in  practice,  particularly  in  sectors  where  OEMs  have 
sufficient market power to put pressure on spare parts manufacturers to make them refuse 
the  supply  of  independent  repairers  and  service  providers.  In  most  cases,  the  pressure 
triggering  this  refusal  to  supply  is  not  reflected  in  any  agreement  or  in  any  exchanges 
between  the  OEMs  and  the  spare  parts  manufacturers.  Consequently,  independent 
repairers  and  service  providers  are  not  in  a  position  to  assert  their  rights  under  Article 
4(e)  of  the  VBER.  Some  respondents  added  that,  in  view  of  this  particular  context, 
adding  independent  wholesalers  to  the  list  of  independent  market  players  that  should 

228 

 
 
 
 
 
have  unrestrained  access  to  spare  parts  could  counteract  any  such  market  power  by 
OEMs.  Moreover,  a  few  respondents  to  the  public  consultation  also  pointed  to  the  fact 
that Article 4(e) of the VBER fails to address situations where OEMs foreclose access to 
the aftermarket for independent market players by refusing to share technical information 
that is essential to provide aftermarkets or repair services.  

Third,  a  few  respondents  to  the  public  consultation  (mainly  business  associations  and 
lawyers) pointed out that the Vertical Guidelines do not provide enough guidance on 
single branding obligations for spare parts in vertical agreements between OEMs and 
their own service network. They indicated that, according to paragraph 59 of the Vertical 
Guidelines, such obligations benefit from  the block exemption.  In their view, however, 
an  obligation  for  authorised  repairers  to  use  spare  parts  supplied  by  the  OEM  should 
simply not be considered as a restriction under Article 101 of the Treaty. To support their 
view, they refer to the Supplementary Commission Guidelines on vertical restrictions in 
agreements for the sale and repair of motor vehicles and for the distribution of spare parts 
for motor vehicles,242 which recognise that an obligation on an authorised repairer to use 
spare parts supplied by the car manufacturer is justified for repairs made under warranty, 
as it is the car manufacturer who is liable to ensure that such repairs are carried out in a 
professional manner, as well as for repairs made outside warranty to maintain the brand 
image  of  the  manufacturer.  According  to  these  respondents,  the  same  justifications  can 
apply in relation to other goods than motor vehicles. Therefore, the Vertical Guidelines 
should  specify  that  single  branding  for  spare  parts  in  the  context  of  an  OEM’s  own 
service network are justified also outside the scope of the VBER.  

4.6.9.3.  Withdrawal and disapplication procedures  

The  presumption  of  legality  conferred  by  the  VBER  may  be  withdrawn  by  the 
Commission pursuant to Article 29(1) of Council Regulation 1/2003, where it finds that 
in  a  particular  case  an  agreement  exempted  under  the  VBER  has  effects  which  are 
incompatible with Article 101(3) of the Treaty.243 Moreover, pursuant to Article 29(2) of 
Council Regulation 1/2003, the competition authority of a Member State may in the same 
circumstances also  withdraw the benefit of the VBER  in  respect  of the  territory of that 
Member State, or a part thereof, which has all the characteristics of a distinct geographic 
market.244  

242  Supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles 

and for the distribution of spare parts for motor vehicles, OJ C 138, 28.5.2010, p. 16.  

243  See also VBER, recital 13. 
244  See also VBER, recital 14. 

229 

 
 
 
 
 
                                                           
Paragraph  78  of  the  Vertical  Guidelines  clarifies  that  when  the  territory  of  a  single 
Member  State,  or  a  part  thereof,  constitutes  the  relevant  geographic  market,  the 
Commission  and  the  national  competition  authority  concerned  have  concurrent 
competence  to  withdraw  the  benefit  of  the  VBER.  The  Commission  has  however  the 
exclusive  power  to  withdraw  the  benefit  of  the  VBER  when  an  agreement  restricts 
competition  on  a  relevant  geographic  market  wider  than  the  territory  of  one  Member 
State. Paragraph 15 of the VBER explains that in determining whether the benefit of the 
VBER  should  be  withdrawn  pursuant  to  Article  29  of  Council  Regulation  1/2003,  the 
anti-competitive  effects  that  may  derive  from  the  existence  of  parallel  networks  of 
vertical  agreements  that  have  similar  effects,  which  significantly  restrict  access  to  a 
relevant market or competition therein, are of particular importance (so-called cumulative 
effects). 245  Paragraphs  74-78  of  the  Vertical  Guidelines  provide  further  guidance 
regarding the application of this procedure. 

In  addition,  Article  6  of  the  VBER  allows  the  Commission  to  declare,  by  means  of  a 
regulation,  that  the  VBER  no  longer  applies  to  parallel  networks  of  similar  vertical 
restrictions  that  cover  more  than  50%  of  a  relevant  market.  The  effect  of  such  a 
disapplication  regulation  is  to  remove  the  benefit  of  the  VBER  and  to  restore  the  full 
application of Article 101 of the Treaty.246 As explained in paragraph 79 of the Vertical 
Guidelines, such a regulation is not addressed to an individual business, but concerns all 
businesses whose agreements are defined in the regulation.  

The  evidence  gathered  during  the  evaluation  indicates  that  stakeholders  consider  the 
provisions  in  the  VBER  and  the  Vertical  Guidelines  in  relation  to  the  withdrawal 
and disapplication procedures to be overall appropriate.  

However,  in  their  comments,  some  stakeholders  pointed  to  a  number  of  issues  in 
relation  to  both  procedures,  which  would  need  to  be  addressed  in  order  to  facilitate 
their  application.  Most  of  them  stressed  the  fact  that  both  procedures  have  only  been 
considered  very  rarely  and  have  de  facto  never  been  applied  at  European  or  national 
level.  Some  of  them  also  pointed  to  the  low  degree  of  legal  certainty  concerning  the 
procedure  set  out  in  the  respective  provisions  and  raised  other  issues  linked  to  the 
application of both procedures. 

First,  comments  made  by  respondents  to  the  public  consultation  and  notably  by  NCAs 
indicated  that  the  lack  of  application  of  both  provisions  derives  from  the  lack  of 
clarity, the complexity and the limited effect of the current rules. 

245  See also Vertical Guidelines, paragraph 75. 
246  See VBER, recital 16. 

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As regards the lack of clarity and the complexity of the rules, the NCAs that commented 
on  the  withdrawal  procedure  explained  that  an  NCA  that  envisages  withdrawing  the 
benefit  of  the  VBER  must  not  only  establish  that  a  particular  vertical  agreement  falls 
under  Article  101(1)  of  the  Treaty,  but  also  demonstrate  that  this  agreement  does  not 
fulfil the conditions of Article 101(3) of the Treaty. Moreover, they referred to the fact 
that  the  standard  of  proof  to  be  met  for  withdrawing  the  benefit  of  the  VBER  is 
particularly  unclear.  They  pointed  notably  to  the  limited  guidance  provided  in  the 
Vertical  Guidelines  concerning  the  counterfactual  analysis  that  has  to  be  carried  out  in 
order  to  demonstrate  that  the  agreement  falls  within  the  scope  of  Article  101(1)  of  the 
Treaty.   

Both respondents to the public consultation and NCAs also stressed the limited effects of 
both procedures for the following reasons.  

As  regards  the  withdrawal  procedure,  respondents  stressed  that  it  only  applies  ex  nunc 
(i.e.  it  does  not  have  retroactive  effects)  and  only  concerns  a  few  businesses  in  the 
relevant  market.  They  also  pointed  out  that  a  withdrawal  decision  is  not  deterrent  for 
businesses  due  to  the  absence  of  fines.  Some  respondents  to  the  public  consultation 
argued  that  a  withdrawal  decision  could  even  be  counter-productive  and  create 
distortions of competition since it only applies to agreements entered into by businesses 
whose contribution to the cumulative effect is significant.  

In  addition,  NCAs  took  issue  with  the  fact  that their  power  of  withdrawal  is  limited  to 
their  own  national  market,  which  creates  difficulties  in  situations  where  the  relevant 
market extends to a common language area composed of several Member States. In such 
situations, it is the Commission that has the exclusive power to act.  

As  regards  the  disapplication  procedure,  respondents  indicated  that  its  only  effect  is  to 
restore the full application of Article 101 of the Treaty. This  means that, in  addition,  a 
formal infringement decision has to be taken to intervene against any particular vertical 
restriction.  

Second, some respondents to the public consultation indicated that the withdrawal and 
disapplication procedures provide a lower degree of legal certainty.  

For a few respondents to the public consultation, the simple fact that the Commission and 
NCAs can withdraw the benefit of the VBER creates legal uncertainty.  

Other  respondents  refer  to  paragraph  176  of  the  Vertical  Guidelines,  which  gives  the 
Commission  the  possibility  to  withdraw  the  benefit  of  the  VBER  where  the 
characteristics  of  the  contract  product  do  not  require  selective  distribution  or  do  not 
require the applied selection criteria, such as the requirement for distributors to have one 

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or more brick-and-mortar shops  or to  provide specific services. According to  them, the 
possibility to withdraw the benefit of the VBER for selective distribution systems creates 
legal  uncertainty,  notably  considering  that  the  very  same  paragraph  indicates  that 
selective  distribution  systems  are  exempted  regardless  of  the  nature  of  the  product 
concerned and the selection criteria applied.  

A  few  other  respondents  linked  the  lower  degree  of  legal  certainty  to  the  fact  that  the 
application  of  both  procedures  is  based  on  elements  over  which  businesses  do  not 
necessarily  have  control,  in  particular  the  existence  of  restrictions  of  competition 
resulting from the cumulative effect  of parallel  networks of similar vertical  agreements 
implemented by competing suppliers or buyers.  

Third, stakeholders raised other issues linked to the application of both procedures.  

A  few  respondents  to  the  public  consultation  discussed  the  relevance  of  retaining  the 
possibility for NCAs to withdraw the benefit of the VBER. They argued that, in light of 
divergences  between  NCAs  on  certain  topics,  having  withdrawal  decisions  at  national 
level could lead to a fragmentation of the internal market. Conversely, other respondents 
pointed  out  that  the  national  competence  to  withdraw  is  in  line  with  the  effects-based 
approach  enshrined  in  the  VBER  and  poses  no  threat  to  the  uniform  application  of 
competition  rules  within  the  European  Union.  They  argued  that  granting  NCAs  this 
competence  is  rather  a  way  to  recognise  that  market  conditions  may  vary  between 
Member States. 

Other respondents (mainly pure online players) pointed to the fact that the 50% threshold 
enshrined  in  Article  6  of  the  VBER  as  one  of  the  conditions  for  the  disapplication 
procedure  does  not  capture  the  foreclosure  effect  that  can  result  from  the  wide 
application of a particular type of restriction by large and small businesses. In their view, 
this  threshold  should  either  be  lowered  or  the  withdrawal  procedure  should  also  be 
applied to situations where cumulative effects arise regardless of the market shares of the 
suppliers concerned.  

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