CMA Consultation on UK version of Vertical Restraints Block Exemption

 

CMA Consultation on UK version of Vertical Restraints Block Exemption

The Competition and Markets Authority (CMA) is consulting on the retained EU Vertical Agreements Block Exemption Regulation (European Commission Regulation 330/2010) (VBER).  The CMA invites responses by 22 July 2021.

The CMA proposes to replace the retained VBER, upon expiry on 31 May 2022, with a UK Vertical Agreements Block Exemption Order (UK VABEO).

The UK VABEO will be tailored to the needs of the UK market.

The CMA intends to extend the exemption to cover wholesalers and independent importers who are also active in the downstream market and asks whether the current £44 million turnover threshold for such agreements should be revised.

The CMA considers that the current rules on hardcore restrictions which would prevent the block exemption applying are fit for purpose, except in relation to:

·        Territorial and customer restrictions, where the CMA plans to clarify the boundary between active and passive sales.

·        Indirect measures restricting online sales.  The CMA proposes to remove the prohibition of dual pricing and the requirement for overall equivalence from the list of hardcore restrictions.

·        Parity obligations (most favoured nation clauses or “MFNs”), where the CMA intends to add wide parity obligations to the list of hardcore restrictions.

The CMA considers that resale price maintenance (RPM) should remain a hardcore restriction.

The CMA will review the block exemption after six years to reflect the fast movement of market developments, not least the growth in online sales, Brexit and business cooperation in the wake of COVID-19.

https://www.gov.uk/government/consultations/retained-vertical-agreements-block-exemption-regulation-consultation