On 1 June new EU regulations relating to vertical agreements came into force. Vertical agreements are between parties at different levels of the supply chain eg manufacturer and distributor.
These regulations extend the 30% market threshold to the supplier and buyer whereas previously it applied only to the supplier’s market share. If the relevant market share is below 30% then competition law scrutiny does not apply. A one year transitional period has been granted to allow parties to assess their existing arrangements.
Guidelines have also been introduced for Online sales. They provide that every distributor must be able to advertise its products on the internet. Certain other “hardcore restrictions” which are outside the exemption would be :
- Imposing sales restrictions on websites based on the territory in which the customer is located
- Placing limits on the proportion of overall sales that can be made over the internet
- Charging higher process for products to be resold over the internet.
The guidelines do allow a supplier to require a distributor to have a bricks and mortar premises and to require that a certain volume of products be sold offline.
