Brussels, 28/07/2009 (Agence Europe) - On Tuesday 28 July, the European Commission decided to invite stakeholders to submit comments on the proposal for a revised block exemption regulation and guidelines on supply and distribution agreements (vertical restraints). The Commission considers that the rules are “working well overall” and “should not be fundamentally modified”. The main suggestions for amendments intend to take account of recent market developments, in particular the increased purchasing power of big retailers and the evolution of on-line sales on the internet. Interested parties are invited to submit comments until 28th September 2009.
The current Commission Block Exemption Regulation N° 2790/1999, to expire in May 2010, ensures that supply and distribution agreements that comply with its provisions benefit from an exemption from the EC Treaty's ban on restrictive business practices. At the time of its adoption in 1999, the regulation aimed at considerably reducing the regulatory burden on companies, in particular companies without the ability to raise prices without a loss of profit (i.e. with no market power), like SMEs, and at introducing an effects-based approach to the assessment of vertical restraints. These objectives and concerns remain valid today.
When it comes to review, given the constant increase in retail purchasing power, the Commission proposes that, for a vertical agreement to benefit from the block exemption, not only the supplier's market share (as is currently the case) but also the buyer's market share should not exceed 30%.
Regarding on-line sales, on the one hand there is a need to protect consumers' possibilities to purchase to their advantage across borders, which is greatly facilitated by the internet. On the other hand, certain sales restrictions that aim at limiting or preventing distributors from taking unfair advantage of marketing and brand promotion undertaken by others (i.e. free riding) may enable consumers to benefit from better services. The Commission's suggested approach therefore refines, in the on-line context, the distinction, between sales made as a result of active marketing and sales made as a result of the consumer taking the initiative (i.e. between active and passive sales), and explains how the revised regulation would deal with conditions imposed in relation to internet sales, such as a requirement imposed by a supplier that the distributor should have a “brick and mortar” shop before engaging in online sales. The draft revised block exemption regulation and guidelines are available on the Europa website at: http: //ec.europa.eu/competition/consultations/2009_vertical_agreements/index.html. (O.L./transl.jl)