The New European Vertical Block Exemption: Unanswered Questions for Online Distributors and Platforms

On June 1, 2022, the European Commission’s new Vertical Block Exemption Regulation (“VBER”) and its accompanying guidelines (the “Guidelines”) came into force.  The VBER provides a safe harbor for vertical agreements where the parties’ market shares are below 30 percent and certain conditions are met.  Since the previous rules were drafted, the importance and prevalence of e-commerce has increased significantly.  The new rules are designed to provide guidance which is fit for purpose in the digital age. This article focuses on the revised guidance for online distribution (in particular, for dual distributors).  In this context, the European Commission has emphasized the principle that restrictions should not prevent the “effective” use of the internet, but questions remain about when restrictions will be sufficiently severe that they infringe this rule.  For providers of online-intermediation services (e.g. certain online marketplaces and application stores), their categorization as suppliers will have an important impact on the restrictions which they are able to impose on those selling through their platforms. While the VBER provides a welcome update to the previous rules in relation to online distribution, questions remain and companies and their advisors will be watching the European Commission’s enforcement activities with interest for further guidance.

By Esther Kelly & Fiona