Rethinking the EU’s by Object Approach to Vertical Restrictions

The EU is in the process of revising its Vertical Block Exemption Regulation and Vertical Guidelines, which expire in 2022. As part of this process, the European Commission has carried out an evaluation identifying a number of issues with how the current rules have functioned since their adoption in 2010, primarily due to the significant changes wrought to distribution markets by the growth of e-commerce. But it has concluded that the list of hardcore restrictions contained in the rules – those agreements typically treated as having the object of restricting competition under EU competition law – are generally appropriate. This article challenges that conclusion, and particularly how the by object approach has been applied to vertical agreements in the context of online selling. In our view a more coherent and rigorous approach to defining by object vertical restrictions is called for and will be critical to ensuring that the rules achieve their ultimate aim of improving legal certainty.

By André Pretorius & Alex White¹

I. INTRODUCTION

The EU is in the process of revising its rules on vertical agreements as contained in the Vertical Block Exemption Regulation (VBER) and Vertical Guidelines, which expire in May 2022.² Ahead of further consultations and the publication of draft revised rules, the European Commission (Commission) published in September a staff working document evaluating how the current rules have functioned since their adoption in 2010 (t