ERT Expert Paper – Vertical Agreements

The Working Group on Competition Policy of the European Round Table for Industry (ERT) welcomes the European Commission consultation on the revision of the Vertical Block Exemption Regulation (VBER) and the Notice providing guidance on the assessment of vertical restraints (Vertical Guidelines).

Vertical relationships open up inter-brand and intra-brand competition, fostering competition on price, quality of service, customer care and innovation. The distribution landscape has changed dramatically over the last decade since the VBER was adopted. New distribution models have emerged, and businesses are continuously adapting to an ever-changing digital market economy. Businesses are also adapting to the challenges of climate change and, more recently, to the impact of the COVID-19 pandemic.

We welcome the Commission’s initiative to update the VBER to reflect the need for more flexibility in the design of distribution systems to allow businesses at innovation, manufacturing, supply and distribution levels to continue to adapt to future changes and challenges and to respond to evolving customer needs.

ERT maintains its view that VBER ought to adopt a more flexible approach to better allow suppliers to structure their supply chain so as to meet the demands of customers and consumers.

The revised VBER and Vertical Guidelines should acknowledge the pro-competitiveness and commercial reality of vertical relationships, provide firms with confidence and clarity to be able to adjust to changing market forces, and avoid overly granular rules.