Proposed New EU Competition Rules for Distribution Agreements – A Rebalancing for the Digital Age

On July 9, 2021, the European Commission (“EC”) published for public consultation a draft revised Vertical Block Exemption Regulation (“VBER”) and draft revised guidelines on vertical restraints (“Vertical Guidelines”). The EC has made substantial revisions, in particular adjustments to the rules governing dual distribution, dual pricing, and parity obligations.

By James Killick, Tilman Kuhn & Peter Citron¹

On July 9, 2021, the European Commission (“EC”) published for public consultation a draft revised Vertical Block Exemption Regulation (“VBER”) and draft revised guidelines on vertical restraints (“Vertical Guidelines”). The EC has made substantial revisions, in particular adjustments to the rules governing dual distribution, dual pricing, and parity obligations.

The draft new rules aim to address the tectonic shifts over the last decade in the way business operates, in particular with the growth of e-commerce and online platforms. Emerging new distribution formats started challenging traditional brick-and-mortar shops long ago, but the industry has undergone radical change more recently with suppliers increasingly engaging in dual distribution (i.e. selling both through retailers and through their own stores, primarily online), price comparison websites offering direct purchase options, traditional online