The revision of VBER, regulating international distribution and sales contracts, concerns the most widespread models of international distribution agreements. The amendments to the regulation mainly concern international online trade. In recent years, the growth of e-commerce and the birth of online trade platforms have exploded. The revision of VBER – the Vertical Block Exemption Regulation – was adopted to protect competition within the Single European Market.
The revision of the VBER regulation concerns models of distribution agreements such as:
- exclusive distribution;
- selective distribution;
- internet sales;
The new discipline aims to regulate vertical agreements between different levels of the same supply chain and to provide companies with simpler and clearer rules and guidelines for assessing the compatibility of their supply and distribution agreements with EU competition rules. The aspect of protection and safeguarding against competition has a particular relevance in the market in light of the exponential growth of e-commerce and online sales that the new VBER and the Guidelines on vertical agreements, in force since 1 June 2022, want to regulate.
The focus of the new VBER. Block exemption on vertical agreements
Distributors and suppliers will have a clearer framework for regulating their vertical agreements within the ‘safe harbour’ from which some agreements are exempted and therefore considered compatible with competition in the EU internal market. The revisions of the VBER agreements mainly concern agency distribution and franchising contracts. These two types of distribution contract are subject to the new rules with regards to the block exemption on vertical agreements. In particular, the VBER revision has been designed to favour all types of small and medium-sized companies operating at different levels of the production or distribution chain evaluate their vertical agreements in their daily activities and in relation to the distribution agreements limiting competition.
The main novelty of the new VBER agreements
One of the aspects of the redefinition of the agreements in force since 1 June concerns the ‘safe harbour’ or the area of territory of a State, for which some agreements can be exempted by category, because they are considered compatible with competition in the internal market and antitrust.
The two aspects of the new commercial distribution agreements. Double distribution and safe harbou
The first aspect concerns narrowing the area of double distribution.
- Double distribution is when a supplier sells goods and services either through independent distribution chains or directly to the customer. Within the sphere of double distribution there is also that of equality obligations.
- Equality obligations are required of the seller, who must offer his counterpart equal or better conditions than those offered on third party sales channels, such as those of online platforms or direct sales channels such as the corporate e-commerce website.
According to the new revised VBER rules, some types of equality and double distribution obligations can no longer be exempted, but must be subject to evaluation pursuant to art. 101 TFEU.
The second aspect concerns the extension of the scope of application of the safety area. The amended VBER extends the opeativity of the exemptions from certain restrictions of the safe harbour. These exemptions are:
- some restrictions on the buyer’s ability to actively solicit individual customers or ‘active sales’;
- certain practices concerning online sales, in particular the ability to charge different wholesale prices to the same distributor for products intended for online and offline sales, and the ability to impose different conditions for online sales and offline sales in distribution systems selective.
Restrictions on the distributor who are charged different wholesale prices for the products to be sold, depending on whether they are online sales or retail sales. The new VBER expands the scope of application of this type of restrictions, provided that all the others are satisfied.
Equality and double distribution obligations under the new VBER
Therefore, it will be increasingly necessary to subject international distribution contracts to careful examination, especially when concerning online sales of products and services, as the new VBER revises some contractual aspects relating to double distribution and some types of equality obligations, which are no longer exempt, but will have to be assessed individually as per art. 101 of the TFEU. On the other hand, the regulation broadens the safe harbour’s sphere of action for restrictions on web sales, i.e. the possibility of charging different wholesale prices to the same distributor for products sold online and offline, or to impose different criteria for online and offline sales in selective distribution systems.