3 Introduction 1. This publication explains how EU competition rules apply to vertical agreements (i.e. essentially agreements for the sale or purchase of goods or services between parties operating at different levels of the economic supply chain within the meaning of the respective agreement). It examines the application of the Commission`s Class Exemption Regulation (VABER) 1 and the Commission`s attached vertical guidelines, which define the principles for evaluating vertical agreements covered by the section. The concept includes the purchase or supply of intermediate goods (for example. B.raw materials or goods processed by the customer, goods (for example. B for resale by a distributor operating at the wholesale or retail level) or services. It also includes agency agreements. vertical agreements, which are similar in form, can have very different physical effects on competition – just as different types of agreements can have similar competitive effects – depending on the identity of the parties, the structure of the market involved, etc. Distinction between vertical and horizontal chords 3. Vertical restrictions (i.e. restrictions in vertical agreements) are generally considered less damaging than horizontal restrictions (i.e.
restrictions in agreements between competitors or companies operating at the same level of production or distribution). This results: a) Vertical agreements: in a vertical relationship, the product of one is the input of the other. This means that the exercise of market power by one party, whether it is an upstream supplier or a downstream buyer, would normally affect the economic position of the other party. Parties to a vertical agreement are therefore generally encouraged to prevent each other from imposing inappropriate restrictions. For most vertical agreements, there are serious competition problems only if there is insufficient inter-brand competition in the markets affected by the agreement, i.e. where the supplier (and/or buyer) has a high level of market power. 1 Regulation 2790/1999 of 22 December 1999 (OJ L 336/31). This category exemption came into effect on June 1, 2000 and expires on May 31. It was incorporated into the EEA`s competition rules by EEA Joint Committee Decision 18/2000 (modifying Annex XIV of the EEA agreement). 2 Guidelines on vertical restrictions, as formally adopted on 24 May 2000 (JO 2000 C291/1). The EFTA Supervisory Authority adopted guidelines in July 2001 (OJ C 122/1).
The Commission has also published a more concise brochure on competition rules for supply and distribution agreements. 3 Regulation (EC) No. 1400/2002 of July 31, 2002 (2002 L203/30 OJ).