Creating Tomorrow: Digitization of Retail and Consumer Products - Distribution Relationships in the Digital Age - The competition rules applying to vertical agreements under review

With the growth of online sales and the introduction of new market players, such as online platforms, the relationship between suppliers and their distributors has changed dramatically. It was not until fairly recently that the European Commission acknowledged that the competition rules have not evolved with this changing landscape and that many questions regarding online sales remain unanswered. The Commission’s recent practice and the current review of the Vertical Block Exemption Regulation (VBER) are intended to provide clarity with regard to the application of the competition rules to the e-commerce industry.

Businesses distributing goods and services in the EU rely on the Vertical Block Exemption Regulation (VBER) for legal certainty, as it sets out the conditions under which distribution agreements are presumed to comply with the competition rules. The VBER will expire on 31 May 2022 and is currently under review. The most significant expected changes relate to the treatment of online sales.

It is clear that more guidance in this area is required. After twenty years of virtually no enforcement action against distribution practices, things changed when the European Commission launched its e-commerce sector inquiry. Since publishing the results of that inquiry in 2017, the Commission has imposed over 150 million euro in fines on Guess, Nike, Sanrio and many other suppliers, in connection with restrictions imposed on online resellers. Many national competition authorities have followed suit with, most recently, the UK’s authority vigorously pursuing the musical instruments industry for restricting online discounting.

This webinar will cover the most important questions for legal practitioners both on the supply and distribution side, including:

• Online sales ban: under which conditions can a supplier prevent its distributors from selling online? 
• Ban on sales through online marketplaces: can a supplier prevent its distributors from selling through Amazon or eBay? Can a supplier prevent its distributors from using price comparison websites?
• Resale price restrictions: can a supplier impose minimum resale prices or restrict discounts? Can a supplier charge different prices for products intended for the online market? Is a minimum advertised pricing policy compliant with EU competition law? 
• Other online sales and advertising restrictions, such as restrictions on the use of brand names in online search advertising, most-favoured nation clauses.

We are happy to cover any other questions on this topic and look forward to an interactive debate. If you would like to submit a question beforehand, please reach out to our speakers Thomas De Meese and Marieke Van Nieuwenborgh.