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GLOSSARY

Vertical agreements definition

Published by a LexisNexis Competition expert

What does Vertical agreements mean?

Vertical agreements, as set out in Article 1(1)(a) of the VRBE, are defined as agreements or concerted practices entered into between two or more undertakings operating for the purposes of that particular arrangement at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell goods or services.

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Issues with franchising in an overseas territory—checklist

Issues with franchising in an overseas territory—checklist This Checklist sets out the issues for a franchisor to consider when preparing to operate the franchise in an overseas territory. The advance of technology has helped facilitate the rise of a global economy. This has led to the creation of opportunities for companies to trade outside of their domestic markets and exploit developing territories. However, a number of issues arise when a franchisor is preparing to operate in an overseas territory some of which are detailed below. PESTLE analysis A franchisor may wish to carry out a political, economic, environmental, sociological, technological, legal and environmental factors (PESTLE) analysis in relation to a new territory. The information obtained from the analysis can be used as a guide to strategic decision making when considering international franchising. Below is a list of legal and non-legal issues that might arise with international franchising. Political • There may be increased political or legislative risks that should be taken into consideration by businesses before they commence operations in...

Vertical agreements—drafting for MVBEO—checklist

Vertical agreements—drafting for MVBEO—checklist This Checklist sets out the essential points that should be considered under The Competition Act 1998 (Motor Vehicle Agreements Block Exemption) Order 2023 (No 2) (MVBEO) when drafting new vertical agreements, or updating existing vertical agreements, in relation to motor vehicle aftermarkets for the provision of repair and maintenance services or the distribution of motor vehicle aftermarket goods (together, the motor vehicle aftermarket). This Checklist is not intended to be a comprehensive guide to the MVBEO but should be used where a commercial lawyer wants to ensure that the vertical agreement falls within the MVBEO (and any guidance issued under it). For further information, see: CMA Guidance: MVBEO. A flowchart is also provided at the end of this Checklist, setting out the main steps to follow when assessing whether an agreement falls under the MVBEO. Introduction to MVBEO Any agreement which affects trade and restricts competition in the UK may be subject to the prohibition on anti-competitive agreements under the provisions of Chapter I of the Competition...

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Casio (digital pianos/keyboards) (50565-2) [Archived]

Casio (digital pianos/keyboards) (50565-2) [Archived] CASE HUB ARCHIVED—this archived case hub reflects the position at the date of the decision of 1 August 2019; it is no longer maintained. See further: timeline, commentary and related cases. Case facts Outline CMA Article 101 TFEU/Chapter I CA98 investigation into Casio Electronics Co. Ltd (Casio) in relation to the allegation that Casio has breached UK and EU competition law by restricting retailer freedom to discount digital pianos and digital keyboards supplied by Casio online. Latest developments On 1 August 2019, the CMA issued a decision finding that Casio infringed Article 101 TFEU/Chapter I CA98 by preventing online discounting for its digital pianos and keyboards. The CMA imposed fines totalling £3.7m on Casio (including a 20% settlement discount). Parties Casio Electronics Co. Ltd (Casio) is the UK-based subsidiary of Casio Computer Co. Ltd (based in Japan). Casio supplies electronic musical instruments, such as digital pianos and keyboards. Market(s) Supply of digital pianos and keyboards in the UK. This market forms a...

EU competition law and joint purchasing agreements under the previous Horizontal Guidelines [Archived]

EU competition law and joint purchasing agreements under the previous Horizontal Guidelines [Archived] ARCHIVED: Revised Horizontal Guidelines were published in the Official Journal on 21 July 2023. This Practice Note was written with the previous Horizontal Guidelines in mind. It is not maintained. Instead, for up to date content, please see the relevant section in Practice Note: Analysing horizontal co-operation agreements under EU competition law. Joint purchasing agreements are agreements under which two or more companies (and indeed, often a significant number of companies) agree to jointly purchase all or part of their product requirements. Joint purchasing agreements can give rise to significant benefits for consumers and markets. For example, they may create cost savings (such as lower purchase prices or reduced transaction, transportation and storage costs) because of the parties’ increased buying power and economies of scale, which can in turn be passed on to customers. They can also give rise to qualitative benefits, such as by leading suppliers to innovate and introduce new or improved products on the...

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Sales and marketing agency agreement for services—exclusive—pro-principal

Sales and marketing agency agreement for services—exclusive—pro-principal This Agreement is made on [date] Parties 1 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Principal); and 2 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Agent), (each of the Principal and the Agent being a party and together the Principal and the Agent are the parties). Background (A) The Principal supplies the Services (as defined below). (B) The Principal wishes to appoint the Agent as its exclusive agent in the Territory (as defined below) for the [marketing OR marketing and sale] of the Services on the terms of this Agreement. (C) The Agent has agreed to [market OR market and sell] the Services in the Territory on the Principal’s behalf on the terms of this Agreement. The parties...

Sales and marketing agency agreement for services—non-exclusive—pro-agent

Sales and marketing agency agreement for services—non-exclusive—pro-agent This Agreement is made on [date] Parties 1 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Principal); and 2 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Agent), (each of the Principal and the Agent being a party and together the Principal and the Agent are the parties). Background (A) The Principal supplies the Services (as defined below). (B) The Principal wishes to appoint the Agent as its non-exclusive agent in the Territory (as defined below) for the [marketing OR marketing and sale] of the Services on the terms of this Agreement. (C) The Agent has agreed to [market OR market and sell] the Services in the Territory on the Principal’s behalf on the terms of this Agreement....

Dive into our 28 Precedents related to Vertical agreements

Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory?

Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory? In this Q&A we are referring to restrictions on sales into territories within EEA. Agreements between companies operating at different levels in the supply chain are often called ‘vertical agreements’. Vertical agreements may also be described as distribution agreements, although this does not reflect their full range and diversity. However, certain types of distribution arrangement may be prohibited under competition law, some examples of which include: • exclusive distribution—where the supplier agrees to sell to only one distributor for resale in a particular territory (see Practice Note: Competition law and exclusive distribution agreements) • selective distribution—where the supplier agrees to supply only specified approved distributors, who in return agree to sell on only to other approved distributors and end users (see Practice Note: EU competition law and selective distribution) • exclusive customer allocation—where the supplier agrees to sell to each distributor for resale only to an exclusive class of customers Article 101...

Is a del credere agent considered a ‘genuine’ agent for the purposes of UK and EU competition law?

Is a del credere agent considered a ‘genuine’ agent for the purposes of UK and EU competition law? A ‘genuine’ agency relationship will fall outside the scope of Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) and the Chapter 1 prohibition of the UK Competition Act 1998. Each jurisdiction now benefits from its own block exemption for vertical agreements: • UK—The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (UK VABEO) • EU—Commission Regulation (EU) No 2022/720, the Vertical Block Exemption Regulation (EU VBER) A genuine agent for the purposes of UK and EU competition law occurs where: • the property does not vest in the agent/the agent does not supply the contract services itself, and • the agent does not bear any (or bears only insignificant) commercial or financial risk A genuine agent working for the benefit of a principal ‘may…be treated as an auxiliary organ forming an integral part of the latter’s undertaking, who must carry out his principal’s instructions and thus, like...

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Competition weekly highlights—6 March 2025

This week's edition of Competition weekly highlights includes, from a UK perspective: (1) the CMA’s decision that Microsoft and OpenAI’s partnership does not qualify for investigation, (2) the CAT’s decision to quash (and remit back) the CMA’s phase 2 decision of the Spreadex/Sporting Index merger, (3) the Court of Appeal’s judgment dismissing an appeal relating to its first judgment on the UK’s post-Brexit subsidy regime, (4) a CAT judgment dismissing a jurisdictional challenge in a damages action brought by supermarkets against salmon suppliers, and (5) publication by the CMA of a MoU between the Canada and the CMA regarding international cooperation on the application of national competition laws. This week’s highlights also includes, from an EU perspective: (1) the Commission’s decision to launch a consultation on antitrust rules for the motor vehicle sector, (2) Advocate General Medina’s opinion concerning a proposed annulment of the General Court judgment upholding State aid for Hungary’s Paks II nuclear project, (3) the Court of Justice judgment concerning whether Article 102 TFEU applies to refusals...

EU Law weekly highlights—6 March 2025

This week's edition of EU Law weekly highlights includes analyses on the Court of Justice’s first ruling on the conformity of asymmetric jurisdiction clauses, the first preliminary opinion issued by the Enlarged Board of Appeal’s (EBA) regarding the use of description when interpreting the claims for assessing patentability, the ruling in Schweppes’s trade mark challenge with Russian Tea Co., the decision of the Düsseldorf local division of the Unified Patent Court in Fujifilm Corporation v Kodak Holding GmbH and others, and the draft guidance on the interplay between the EU AI Act's and medical device regulations. In addition this week, the European Commission seeks feedback on antitrust rules for automotive sector, introduced the Union of Skills initiative, proposed a two-year extension of the Gas Storage Regulation, initiated a process to enable free and safe data flows between the EU and EPO, and published an Action Plan for the automotive sector and a Communication to decarbonise corporate fleet.

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