In July 2021, the European Commission published its drafts of the revised Vertical Block Exemption Regulation (“VBER”) and Vertical Guidelines. The draft documents are open for public consultation until 17 September.
The VBER (Commission Regulation (EU) No 330/2010) exempts vertical agreements that meet certain conditions from the prohibition included in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), thus creating a safe harbour for those agreements. Ecommerce Europe welcomes the publication of the draft texts and supports the European Commission’s objective to ensure that the revised VBER and Vertical Guidelines reflect current and future commercial realities.
However, Ecommerce Europe believes that several proposed revisions could pose significant challenges for the e-commerce sector and therefore require a detailed assessment by our sector and a careful approach by the Commission.
With regards to dual distribution (when a supplier uses distributors for the distribution of goods or services, but also uses its own distribution channel), the Commission has proposed multiple revisions. According to the draft, vertical agreements are only exempted when the combined market share of the supplier and the distributor in the relevant market at retail level does not exceed 10%. Hybrid platforms (online platforms that sell products in competition with the suppliers that use the platform to offer products) are excluded from the exemption.
Concerning online sales restrictions, so-called dual pricing is allowed under the revised VBER. This means that suppliers would be allowed to set different wholesale prices for online and offline sales by the same distributor, as long as this difference in price is related to the differences in the costs incurred in each channel by the distributors at retail level. Earlier this year, Executive Vice-President Vestager already hinted in a speech at the fact that the revised VBER would include new ways to support brick-and-mortar shops, to “make sure that we still have living city centres”. Ecommerce Europe is very cautious of this revision and its potential practical impact on retailers, specifically for those with an omnichannel business model, something that is increasingly becoming the norm, especially after the acceleration of the digital transformation of physical businesses brought by the COVID-19 pandemic.
Other relevant revisions relate to the active sales restrictions (now including language options as active selling), the new concept of shared exclusivity, active sales restrictions and the possibility for buyers to pass them on to their customers, potential online sales restrictions for online marketplaces, and the removal of the block exemption for across-platform retail parity obligations.
Following the feedback deadline, the Commission is expected to assess the collected evidence and to publish the revised VBER and Guidelines in time to enter into force on the day after the current regulation expires on 31 May 2022.