guidelines vertical en - European Commission

1 EN EN EN EN EN European Commission Brussels, SEC(2010) 411 Commission NOTICE guidelines on vertical Restraints {C(2010) 2365} {SEC(2010) 413} {SEC(2010) 414} EN 2 EN Commission NOTICE guidelines on vertical Restraints (Text with EEA relevance) TABLE OF CONTENTS Paragraphs Page I.

2 INTRODUCTION 1-7 4 1. Purpose of the guidelines 1-4 4 2. Applicability of article 101 to vertical agreements 5-7 5 II. vertical AGREEMENTS WHICH GENERALLY FALL OUTSIDE article 101(1) 8-22 5 1. Agreements of minor importance and SMEs 8-11 5 2. Agency agreements 12-21 6 3. Subcontracting agreements 22 9 III. APPLICATION OF THE BLOCK EXEMPTION REGULATION 23-73 9 1. Safe harbour created by the Block Exemption Regulation 23 9 2. Scope of the Block Exemption Regulation 24-46 10 3. Hardcore restrictions under the Block Exemption Regulation 47-59 17 4.

3 Individual cases of hardcore sales restrictions that may fall outside article 101(1) or may fulfil the conditions of article 101(3) 60-64 22 5. Excluded restrictions under the Block Exemption Regulation 65-69 23 6. Severability 70-71 25 7. Portfolio of products distributed through the same distribution system 72-73 25 IV. WITHDRAWAL OF THE BLOCK EXEMPTION AND DISAPPLICATION OF THE BLOCK EXEMPTION REGULATION 74-85 25 1. Withdrawal procedure 74-78 25 2. Disapplication of the Block Exemption Regulation 79-85 26 EN 3 EN V.

4 MARKET DEFINITION AND MARKET SHARE CALCULATION 86-95 28 1. Commission Notice on definition of the relevant market 86 28 2. The relevant market for calculating the 30 % market share threshold under the Block Exemption Regulation 87-92 28 3. Calculation of market shares under the Block Exemption Regulation 93-95 30 VI. ENFORCEMENT POLICY IN INDIVIDUAL CASES 96-229 30 1. The framework of analysis 96-127 30 Negative effects of vertical restraints 100-105 32 Positive effects of vertical restraints 106-109 33 Methodology of analysis 110-127 36 Relevant factors for the assessment under article 101(1) 111-121 36 Relevant factors for the assessment under article 101(3) 122-127 39 2.

5 Analysis of specific vertical restraints 128-229 40 Single branding 129-150 40 Exclusive distribution 151-167 45 Exclusive customer allocation 168-173 49 Selective distribution 174-188 51 Franchising 189-191 55 Exclusive supply 192-202 57 Upfront access payments 203-208 59 Category management agreements 209-213 60 Tying 214-222 61 Resale price restrictions 223-229 63 EN 4 EN I.

6 INTRODUCTION 1. Purpose of the guidelines (1) These guidelines set out the principles for the assessment of vertical agreements under article 101 of the Treaty on the Functioning of the European Union (hereinafter "the Treaty").1 article 1(1)(a) of Commission Regulation (EU) [insert new Regulation number] on the application of article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices2 (hereinafter referred to as the "Block Exemption Regulation") (see paragraphs 24 to 46) defines the term " vertical agreement".

7 These guidelines are without prejudice to the possible parallel application of article 102 of the Treaty to vertical agreements. The guidelines are structured in the following way: Section II (paragraphs 8 to 22) describes vertical agreements which generally fall outside article 101(1); Section III (paragraphs 23 to 73) clarifies the conditions for the application of the Block Exemption Regulation; Section IV (paragraphs 74 to 85) describes the principles concerning the withdrawal of the block exemption and the disapplication of the Block Exemption Regulation.

8 Section V (paragraphs 86 to 95) gives guidance on how to define the relevant market and calculate the market shares; Section VI (paragraphs 96 to 229) describes the general framework of analysis and the enforcement policy of the Commission in individual cases concerning vertical agreements. (2) Throughout these guidelines the analysis applies to both goods and services, although certain vertical restraints are mainly used in the distribution of goods. Similarly, vertical agreements can be concluded for intermediate and final goods and services.

9 Unless otherwise stated, the analysis and arguments in the text apply to all types of goods and services and to all levels of trade. Thus, the term "products" includes both goods and services. The terms "supplier" and "buyer" are used for all levels of trade. The Block Exemption Regulation and guidelines do not apply to agreements with final consumers where the latter are not undertakings, since article 101 only applies to agreements between undertakings. (3) By issuing these guidelines the Commission aims to help companies to make their own assessment of vertical agreements under the EU competition rules.

10 The standards set forth in these guidelines cannot be applied mechanically, but must be applied with due consideration for the specific circumstances of each case. Each case must be evaluated in the light of its own facts. 1 These guidelines replace the Commission Notice guidelines on vertical Restraints, OJ C 291, , p. 1-44. 2 Reference New Block Exemption Regulation EN 5 EN (4) These guidelines are without prejudice to the case-law of the General Court and the Court of Justice of the European Union about the application of article 101 to vertical agreements.