Following the Commission’s roadmap and launch of the public consultation process,[1] on May 26, 2020, the Commission published the final report[2] with support studies for the evaluation of the Vertical Block Exemption Regulation (the “VBER”).[3] The report is part of the Commission’s evaluation of the VBER, which is set to expire on May 31, 2022.

It aims to provide qualitative and quantitative evidence to the Commission for its decision on whether the VBER should be allowed to lapse, be revised, or maintained as is against the background of market developments since the VBER’s adoption in 2010. The Commission is expected to publish the results of its evaluation during the third quarter of 2020 and to issue a consultation on possible changes by the end of 2020.

The report focuses on vertical agreements already covered by the VBER (e.g., selective distribution), as well as new vertical restraints identified during the process that are not specifically addressed in the VBER at present (e.g., data tracking clauses). For each type of restraint, it analyzes whether the procompetitive effects outweigh the potentially anticompetitive effects using a variety of sources and tools, including literature review, comparative legal analysis of individual cases, interviews with stakeholders, and econometric analysis. The report also includes a detailed annex on consumers’ online purchasing behavior in Europe to support its findings.

The key findings of the report can be summarized as follows:

  • Increased importance and growth of online sales and digitalization. The study finds that the VBER remains relevant to vertical agreements but it is not sufficiently adapted to more recent market developments, such as the rise of online Certain types of agreements that are not explicitly covered in the VBER,[4] such as parity clauses, have gained increased importance and are now widely used by online platforms. Accordingly, the VBER is generally found to not sufficiently reflect developments in digital markets since 2010. This is a strong, albeit early, indication that the Commission is likely minded to update the VBER in that regard.
  • Legal certainty. The study finds that the VBER provides a higher degree of legal certainty for undertakings with respect to their assessment of vertical agreements, in comparison to a scenario without the VBER, while reducing the legal costs involved in this assessment. Therefore, the costs and burden created by the VBER are found to be proportionate to the benefits in terms of legal certainty that it gives companies active in in the EU, especially to SMEs. This, again, signals that the Commission is not likely to allow the VBER to expire in 2022.

[1]      As reported in our November 2018 Newsletter and February 2019 Newsletter respectively.

[2]      Support Studies for the Evaluation of the VBER, Final Report 2020, available at: Support studies were commissioned by the Commission to assist its evaluation of the VBER and do not necessarily reflect the official opinion of the Commission.

[3]      Commission Regulation (EU) No. 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, OJ 2010 L 102/1.

[4]      And also not covered in the Commission’s related Guidelines on Vertical Restraints of May 19, 2010.