Global enforcement priorities in vertical agreements
EuropeName and the website of the competition authority
European Commission, DG Competition
Description of legal background
Guidelines on Vertical Restraints (2022/C 248/01)
Article 101 of the Treaty on the Functioning of the European Union
Link to annual reports
N/A
Can participants to vertical agreements benefit from leniency?
No, vertical agreements are not covered by leniency.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
On 1 June 2022, the new Vertical Block Exemption Regulation (VBER) and the updated Guidelines on vertical restraints came into force. The Commission adopted a revised VBER and revised Guidelines on vertical restraints following an evaluation and review of the rules in Regulation 330/2010.
The principle underlying the VBER remains that vertical restraints are presumed to be legal in the absence of market power.
The VBER creates a presumption of legality for vertical agreements concluded by undertakings with market shares below 30%, unless the agreement contains certain hardcore restrictions.
The main key changes can be summarised as follows:
- Dual distribution system:
- Current exemption retained and extended to wholesalers/importers, with the exclusion of hybrid platforms.
- Information exchange is exempted, but only if the exchange is (i) directly related to the implementation of the vertical agreement, and (ii) necessary to improve the production or distribution of the contract goods or services.
- Providers of online intermediation services:
- Online platforms acting as intermediaries are classified as suppliers.
- Resale price maintenance (RPM)
- RPM remains a “hardcore” restriction.
- Non-compete obligations
- Tacitly renewable non-compete obligations for consecutive five-year periods are now block exempted if the buyer can terminate.
- Online restriction
- Under Art. 4(e)), it is expressly stated that preventing “effective use of the internet” by the buyer or its customers is a “hardcore restriction.”
- Under the new Vertical Guidelines, limitations on the online space can still be covered by the safe harbour (e.g., imposing online requirements, including on the display of goods or services).
Recent cases
The EU Commission fined several companies belonging to Comcast Corporation, including NBCUniversal, for imposing anti-competitive restrictions on the sale of licensed merchandise in the EU.
The Commission concluded that NBCUniversal's practices prevented licensees in Europe from selling products cross-border and across customer groups.
The Commission found that for over six and a half years, NBCUniversal implemented direct measures which restricted out-of-territory sales by licensees, sales beyond allocated customers or customer groups, and online sales, and required licensees to pass these restrictions on to their customers. This investigation followed on from the Commission’s sector inquiry into e-commerce markets.
The Commission fined NBCUniversal, EUR14,327,000. This was reduced by 30% due to NBCUniversal’s cooperation with the Commission.
The Commission has reiterated its position that if a company allows the non-exclusive licensing of its products in the EEA, the licensor can no longer control where, to whom, and in what manner the products can be sold within the EEA.
The Commission fined the Spanish hotel group Meliá EUR6,678,000 for including restrictive clauses in its agreements with tour operators.
More specifically, the Commission found that during 2014 and 2015, Meliá concluded several agreements with tour operators including standard terms and conditions which discriminated against consumers within the EEA area based on their place of residence. This resulted in a restriction of active and passive sales in the market for hotel accommodation and violated EU competition rules.
The Commission fined Meliá EUR6,678,000 (which included a 30% reduction for its cooperation).
The Commission is increasingly focusing on restrictions that may make cross-border shopping or online shopping in general more difficult and that can ultimately harm EU consumers.
In January 2021, the Commission fined Valve, the owner of the online PC gaming platform “Steam”, and five PC game publishers.
The Commission found that Valve and the publishers partitioned the internal market by entering into bilateral agreements or concerted practices to use geo-blocked activation keys to prevent the activation of PC video games outside certain EU member states with higher prices.
The five publishers cooperated with the Commission by providing evidence of added value to the investigation, and therefore reductions to the fines depending on the extent of this cooperation were granted.
Valve chose not to cooperate with the Commission and was fined a total of EUR1,624,000.
Valve brought an action before the General Court of the European Union, seeking to have the Commission’s decision concerning its activity annulled. In its judgment delivered in September 20231, the Court dismissed the action, stating that the aim of the geo-blocking in question was not to protect the copyright of the publishers of PC video games, but to prevent parallel imports of those video games and to protect the high royalties collected by the publishers and the margins earned by Valve.
The Commission has reiterated its determination to encourage the cross-border trade of digital products and to combat geo-blocking practices.
Key contact: Daniel Wojtczak, Daniel Colgan
Last updated: November 2023
1 Online video games: the General Court confirms that geo-blocking of activation keys for the Steam platform infringed EU competition law
Name and the website of the competition authority
Description of legal background
In Austria, the prohibition on anti-competitive behaviour is regulated by the Austrian Cartel Act (Kartellgesetz, hereinafter “ACA”), prohibiting in general all kinds of restrictions, preventions or distortions of competition and, among other things, vertical practices, that impede competition. Some vertical agreements may qualify for an exemption either pursuant to section 2 of the ACA or pursuant to the EU Vertical Block Exemption Regulation (VBER).
RIS - Kartellgesetz 2005 - Bundesrecht konsolidiert, Fassung vom 02.08.2023 (bka.gv.at)
Link to annual reports
Annual reports Activity report 2022 of the Austrian Competition Authority
Can participants to vertical agreements benefit from leniency?
Yes. Undertakings which have been fined for anti-competitive behaviour based on vertical agreements and that accept the fine may benefit from a so-called settlement discount (up to 20% of the fine). Cooperation with the authorities will also reduce the fine.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
With the most recent changes to the ACA in 2021, Austria is among the first EU member states to introduce a sustainability exemption. These changes reflect aspects of the European Green Deal (COM (2019) 640 final). In this legislative change, a further exemption from the cartel prohibition was implemented in section 2(1) of the ACA. Under this new exemption, it is presumed that the criteria of consumer participation is met if the efficiency gains resulting from a cooperation agreement or concerted practice contribute significantly to an ecologically sustainable or climate-neutral economy.
In September 2022, the Austrian Federal Competition Authority (FCA) published non-binding guidelines regarding the practical application of the sustainability exemption. These guidelines aim at facilitating self-evaluation by companies regarding possible sustainability cooperation that is limited to the Austrian market.
Recent cases
School Bags Cartel
In early 2019, investigations were initiated against "Fond Of GmbH" and several retailers for suspected resale price maintenance in the distribution of school bags and backpacks.
- Fond Of GmbH also restricted retailers in their ability to market products on their own websites and third-party platforms.
- In July 2022, the Cartel Court imposed a fine of EUR340,000 on Fond Of GmbH, with a reduction due to cooperation with the FCA (Case 25 Kt 5/21d). Kastner & Öhler received a EUR70,000 fine, and Thalia was fined EUR100,000. Fond Of GmbH and Kastner & Öhler sought leniency, leading to reduced penalties. Another retailer, Georg Hausmann KG, collaborated with the FCA and acknowledged its involvement in the infringement. Due to the company’s difficult financial situation, the FCA chose not to impose a fine.
Key contact: Marc Lager
Last updated: November 2023
Name and the website of the competition authority
Description of legal background
Article IV.1 of the Belgian Code of Economic Law (CEL) contains a general prohibition on vertical agreements that have as their object or effect the prevention, restriction or distortion of competition on the Belgian market or a substantial part thereof.
Pursuant to Article IV.3 of the CEL, the EU’s Vertical Block Exemption Regulations (VBER) apply by analogy – even if trade between member states is not affected. As a consequence, the EU Guidelines on Vertical Restraints provide important guidance for the Belgium Competition Authority (BCA) and Belgian courts. The BCA has not issued any guidelines regarding vertical agreements
Book IV of the Code of Economic Law
Link to annual reports
Enforcement Priorities of the BCA for 2023
Can participants to vertical agreements benefit from leniency?
No
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
Amendments in Book IV of the Belgian Code of Economic Law
Book IV of the CEL containing competition rules in Belgium was amended by the Act of 2 February 2021 laying down various provisions relating to the Economy, and the Act of 28 February 2022 transposing the ECN+ Directive ((EU) 2019/1).
The adopted competition law changes were intended to clarify certain provisions and correct a few minor inconsistencies in the law, as well as to ensure the effectiveness of competition law enforcement.
Recent cases
The Caudalie Case
BCA’s Decision of 6 May 2021, Caudalie, BCA-2021-P/K-09
Following two complaints brought by Newpharma and Pharmasimple, the BCA fined Caudalie for imposing minimum resale prices and restricting active and passive sales on its distributors between the end of 2014 and the beginning of 2018.
The BCA qualified these practices as hardcore restrictions of competition by object under Article IV.1 CEL and Article 101 of the TFEU and imposed a fine of EUR 859,310 on three undertakings of the Caudalie group, i.e. Caudalie Belgium SRL, Caudalie SAS and Caudalie International Holding.
The BCA accepted commitments offered by Caudalie and took them into consideration as mitigating circumstances to reduce the fine by 5%.
Brussels Market Court’s judgement of 1 December 2021, Caudalie, 2021/MR/1
Caudalie filed an appeal against the BCA’s decision before the Brussels Market Court, requesting that (i) the execution of the BCA’s decision be suspended and (ii) the decision be annulled.
On 30 June 2021, the Market Court suspended the execution of the BCA decision.
In its judgement of 1 December 2021, the Market Court ruled that the BCA illegally imposed a fine on Caudalie while simultaneously accepting and making binding the commitments offered by Caudalie during the investigation, both under Article IV.52, §1, 2° of the CEL.
The Market Court therefore annulled the BCA’s decision of 6 May 2021 and referred the case back to the BCA.
BCA’s Decision of 18 January 2023, Caudalie, BCA-2023-P/K-01
The College of the BCA confirmed that Caudalie had infringed Article IV.1 of the CEL and Article 101 of the TFEU by imposing minimum retail prices and active and passive sales restrictions on its selective distributors, and it reimposed the same fine of EUR 859,310, without further commitments this time.
The Caudalie case is exceptional as decisions by the BCA on vertical restraints remain rare.
Key contact: Daniel Wojtczak, Daniel Colgan
Last updated: November 2023
Name and the website of the competition authority
Úřad pro ochranu hospodářské soutěže
Office for the Protection of Competition (uohs.cz) (hereinafter referred to as the Office)
Description of legal background
Competition law is mainly regulated by The Act No. 143/2001 Coll., on the Protection of Economic Competition, as amended (hereinafter referred to as the PEC Act), (available in Czech only).
In accordance with its constitutional law, the Czech Republic incorporated Commission Regulation (EU) No. 651/2014 (hereinafter referred to as GBER) of 17 June 2014 into its legal system, which, in accordance with Articles 107 and 108 of the Treaty, declares certain categories of support to be compatible with the internal market; this is the so-called general regulation on block exemptions, which entered into force on 1 July 2014, with the current version being in effect as of 1 August 2021. Furthermore, the Czech Republic has created numerous documents and guidelines based on the GBER to provide assistance and a better understanding of its contents.
Link to annual reports
Office for the Protection of Competition | Annual reports (uohs.cz)
Can participants to vertical agreements benefit from leniency?
No, they cannot. There is a Leniency Programme established by the Office based on Section 22ba of the PEC Act. However, since 28 June 2007, it is only applicable to horizontal agreements and horizontal agreements with vertical elements.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
The Office drafted a legislative proposal to amend the PEC Act, the purpose of which was mainly to transpose Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 into local law. The changes concerned, for example, new definitions, the settlement procedure, the extension of the leniency programme to vertical agreements, issues of international cooperation, etc.
Two amendments to the PEC Act have taken effect since then. One of them, in 2021, repealed Section 21(i) on the use of information from public administration systems. The second one, which took effect on 1 February 2022, added paragraph (9) to Section 22(b), which states that if the accused continues to engage in the conduct for which the proceedings for a continuing, ongoing or collective offence of distortion of competition have been initiated even after the initiation of those proceedings, that conduct will be considered to constitute a single act until the statement of objections. Apart from the general principles issued by the European Commission and implemented in the Czech Republic, the impact of Covid-19 caused rather a stricter implementation of the laws already in place. During the pandemic, the Office declared that any abuse of the situation would only be considered as an aggravating circumstance when calculating the amount of the fine.
Recent cases
Long-term Vertical Agreements of BABY DIREKT
(came into force on 30 December 2020)
Party to the proceedings: BABY DIREKT, s. r. o.
First-instance fine: CZK40,793,000 (approx. EUR1,737,000)
Appeal: filed
Second-instance: fine confirmed; appeal denied
Legal qualification: Section 22a(1)(b) of the PEC Act
During the period 2011–2018, BABY DIREKT entered into prohibited vertical price agreements primarily through oral and e-mail communication with its retailers of children’s goods. BABY DIREKT threatened retailers with penalties for not complying with the minimum price limits or even penalised them in the form of the non-delivery of goods. In 2019, a fine of approximately EUR1,737,000 was imposed on BABY DIREKT for long-term anti-competitive conduct. After the appeal, in the second instance, the Court ordered the company to inform all its customers in writing of the prohibition and invalidity of the agreements.
GARLAND (last decision 16 September 2021)
Party to the proceedings: GARLAND distributor, s.r.o.
First-instance fine: CZK96,751,000 (approx. EUR4,128,000)
Appeal: filed
Second-instance: appeal denied
Appeal (cessation complaint): filed and denied
Legal qualification: Section 3(1) of the PEC Act
In the first instance decision, the Office imposed a fine of approximately EUR4,128,000 on GARLAND for vertical agreements on resale pricing and prohibited these agreements. This is the highest fine ever imposed for this type of anti-competitive conduct. GARLAND committed an infringement by concluding and implementing prohibited agreements with its customers on direct resale price fixing for almost six years. As a result of this conduct, competition was distorted by excluding price competition between retailers and by maintaining a higher price level for the goods distributed by GARLAND, clearly to the detriment of final consumers.
EURONA s.r.o. (came into force on 5 January 2023)
Party to the proceedings: EURONA s.r.o.
First-instance fine: CZK12,773,000 (approx. EUR545,000)
Appeal: not filed
Legal qualification: Section 22a(1)(b) and Section 3(1) of the PEC Act
Under its Terms of Business Cooperation, EURONA set fixed retail prices for the products it supplied to its buyers for sale to final consumers, while at the same time restricting the online sale of these goods via e-shops operated by its customers, monitoring customers' compliance with the Terms of Business Cooperation, and asking buyers by e-mail to adjust their prices to the fixed prices set by EURONA or to withdraw EURONA products from customers' e-shops, even under the threat of sanctions. The fine was significantly reduced due to EURONA’s cooperation with the Office.
Key contact: Jan Metelka
Last updated: November 2023
Name and the website of the competition authority
The Danish Competition and Consumer Authority/Danish Competition Council
The Danish Competition and Consumer Authority is responsible for the overall enforcement of the Danish Competition Act. The Danish Competition Council renders landmark decisions subject to the authority’s recommendation.
Description of legal background
EU and national block exemptions apply (national block exemptions are only available in Danish but reflect EU block exemptions).
Link to annual reports
The 2022 annual report (only available in Danish).
Can participants to vertical agreements benefit from leniency?
No, only cartel participants may benefit from leniency.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
The Danish Competition and Consumer Authority has a strong focus on retail price maintenance. Its focus has also been directed at other anti-competitive restrictions, e.g. restrictions on passive sales and dual distributors, however, categorising the latter as anti-competitive information exchanges of a horizontal nature, see below on the landmark Kaufmann/HUGO BOSS and Ginsborg/HUGO BOSS cases.
In recent years, fines have been imposed on a number of undertakings as a result of anti-competitive behaviour of a vertical nature:
- GUBI A/S: Retail price maintenance resulted in a DKK6 million (approximately EUR805,640) fine in 2020.
- Konges Sløjd ApS: Retail price maintenance resulted in a DKK1.8 million (approximately EUR241,645) fine and a personal fine of DKK 100,000 (approximately EUR13,425) imposed on a key employee in 2021.
- Ageras A/S: A digital platform’s introduction of a pop-up informing partners of estimated market prices when partners were to submit bids deemed ‘too low’ by the platform resulted in a DKK1.275 million (approximately EUR171,140) fine in 2021.
- Fusion ApS: Retail price maintenance resulted in a DKK500,000 (approximately EUR67,242) fine and a personal fine of DKK 50,000 (approximately EUR 6,724) imposed on a key employee in 2021.
- Cloud7 GmbH: Retail price maintenance resulted in a DKK225,000 (approximately EUR30,243) fine in 2021.
- Rosendahl Design Group A/S: retail price maintenance and restrictions on passive sales resulted in a DKK7.5 million (approximately EUR1 million) fine in 2022.
- HTS Besafe, a Danish branch of HTS Besafe AS: Retail price maintenance resulted in a DKK8 million (approximately EUR1 million) fine in 2022.
Recent cases
The Kaufmann/HUGO BOSS and Ginsborg/HUGO BOSS cases
In 2020, the Danish Competition Council rendered two decisions stating that HUGO BOSS NORDIC ApS (HUGO BOSS), Kaufmann and Ginsborg had committed a by object infringement of section 6 of the Danish Competition Act and Article 101 of the TFEU due to anti-competitive exchanges of information of a horizontal nature, including information regarding future prices.
HUGO BOSS is a manufacturer, supplier, and retailer of clothing items of the brand HUGO BOSS. Kaufmann and Ginsborg are retailers of clothing items, including but not limited to the brand HUGO BOSS. HUGO BOSS has a vertical relationship with Kaufmann and Ginsborg as a supplier, while also being a retailer itself and thus being a competitor to Kaufmann and Ginsborg on the retail market. Thus, HUGO BOSS operates a dual distribution solution by running its own dedicated HUGO BOSS stores and supplying HUGO BOSS products to independent dealers whose concepts are multi-brand distribution.
Both decisions were appealed to the Danish Competition Appeals Tribunal. The decisions were upheld in a split decision with 2 out of 5 judges agreeing with the businesses that the authority had not proved that the dual distribution system was applied in an anti-competitive way. The minority found that the information exchanges were not purely of a horizontal nature, but both horizontal and vertical, and that the information exchanges did not amount to a by object infringement. The decisions have been appealed to the Danish Maritime and Commercial High Court. A ruling is expected in spring 2024.
As illustrated by the decisions, information exchanges may be viewed as purely horizontal without regard to their vertical nature. Thus, while there are often no competitive concerns associated with information exchanges in a vertical relationship, that may not be the case for dual distribution concepts.
The Competition Council/Deutz AG and Diesel Motor Nordic A/S case
In 2013, the Danish Competition Council rendered a decision stating that Deutz AG (Deutz) and its exclusive importer and distributor in Denmark, Diesel Motor Nordic A/S (DNM), had infringed section 6 of the Danish Competition Act and Article 101 of the TFEU by preventing the supply of spare parts to Fleco ApS.
Specifically, the Danish Competition Council found that Deutz and DNM had entered into an agreement after which Deutz had to hinder parallel imports and passive sales from its distribution network, including the Dutch distributor Equipco B.V., to Fleco ApS. Deutz and DNM argued that the agreement was covered by the vertical block exemption regulation, whereas the Danish Competition Council ruled that it was not, as the market share thresholds in the regulation were exceeded. The Danish Competition Council found that Deutz had a market share of 100 % on the market for sales of unique spare parts that could only be acquired via Deutz.
The decision was appealed and upheld by the Danish Competition Appeals Tribunal as well as the Danish Maritime and Commercial High Court. It was appealed to the Eastern High Court and, following a lengthy appeal process, the Eastern High Court annulled the Danish Competition Council’s decision in 2023 and referred the case back to the Danish Competition Council. The Eastern High Court ruled that the market definition and market shares of Deutz was insufficiently substantiated.
The Bankdata case
Bankdata is an association owned by a number of banks, which are also its members and customers (the Member or Members). Bankdata supplies Members with IT solutions. If a bank decides to exit Bankdata, it is obliged to pay an exit fee, among other things to cover investments by Bankdata on behalf of Members.
In 2023, the Danish Competition Council rendered a decision under which Bankdata committed to reduce its exit fee by 50%. The Danish Competition Council had expressed competition concerns that Bankdata’s exit fee was too high (the fee was five times the annual revenue between Bankdata and the Member). The DCCA found that the exit fee created a lock in effect, which limited competition and hence violated section 6 of the Danish Competition Act, which is the equivalent of Article 101 of the TFEU. However, the Danish Competition Council did not state whether the exit fee constituted an infringement of the Danish Competition Act, as Bankdata offered a remedy to lower the exit fee in order to meet the DCCA’s concerns.
This is the first case in a long time that addresses competition law restrictions by effect. However, as it was concluded with remedies, it remains unclear what it would take for the DCCA to document a by effect violation.
Key contact: Michael Klöcker
Last updated: November 2023
Name and the website of the competition authority
The Finnish Competition and Consumer Authority (FCCA)
Description of legal background
The Finnish Competition Act (948/2011, as amended)
Link to annual reports
N/A
Can participants to vertical agreements benefit from leniency?
No
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
Parties in a distribution relationship should be on the lookout for signs of joint understandings concerning minimum resale prices.
Recent cases
Isojoen Konehalli Oy (the Market Court, 11 August 2022)
- Isojoen Konehalli Oy (IKH), an importer and distributor of hardware tools and supplies, was seen engaged in RPM by setting minimum prices for its retailers and through agreements in its online store.
- The judgment emphasises that RPM is a serious violation, with no need to prove negative effects on competition.
- While the fine imposed on IKH was significantly lower than what the FCCA proposed, the case demonstrates the renewed focus of European competition authorities on vertical competition infringements, particularly in the online context.
- The Market Court imposed a fine for RPM, the first such fine in over a decade. The court's decision reflects a strict approach to RPM, considering it a violation of competition rules in itself.
- An appeal has been filed against the decision. The information on the finality of the decision should be verified with the Supreme Administrative Court.
Key contact: Mika Oinonen
Last updated: November 2023
Name and the website of the competition authority
Description of legal background
Sect. 1 of the GWB: Vertical agreements between undertakings are prohibited if they have as their object or effect the prevention, restriction or distortion of competition.
According to Sect. 2 of the GWB, restrictive agreements can be exempted from the prohibition under the general conditions of the individual exemption in Art. 101 para. 3 of the TFEU or the EU Block Exemption Regulation for vertical agreements (see below).
De minimis exemptions: The FCO has published a notice according to which it may exercise its discretion and refrain from prosecuting vertical restraints which (i) are not considered hard-core restrictions and (ii) where the parties’ individual market shares do not exceed 15%.
However, in the case of concerns in relation to cumulative market foreclosure effects due to a multitude of similar agreements covering at least 30% of a specific market, the de minimis threshold is lowered to 5%.
Sector exemptions (i.e. competition law does not apply) for:
- RPM for books, newspapers, magazines (Buchpreisbindungsgesetz, in German);
- Certain aspects of the agriculture sector (28 of the GWB), in particular for resale price maintenance concerning the sorting, labelling or packaging of agricultural products;
- Certain aspects of the public distribution and supply of water (31 of the GWB).
Link to annual reports
Can participants to vertical agreements benefit from leniency?
No. But under general discretionary rules, cooperating with the authority can result in a reduction of fines.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
The new EU Block Exemption Regulation for Vertical Agreements (Commission Regulation (EU) 2022/720 of 10 May 2022) applies also in Germany.
The FCO has issued some specific guidance on additional ways for competitors to cooperate due to the COVID and Ukraine war crises (e.g. in the automotive or sugar sectors). However, this guidance addresses primarily horizontal cooperation between competitors.
The ARC was amended by the introduction of a new provision in sect. 19a, which regulates abusive conduct of “Undertakings of Paramount Significance for Competition Across Markets”. Such undertakings will mainly be online businesses, but not only. They are under special statutory obligations and the potential control of the FCO, but these obligations are not primarily focused on vertical restraints.
Recent cases
Booking.com – the fight about narrow parity clauses
The online hotel platform booking.com offered to intermediate for hotels with guests in the booking of their rooms for a provision. Some hotels offered lower prices on their own websites than on booking.com. As a consequence, booking.com introduced a clause in its intermediation conditions which prohibits hotels from offering lower prices on their own websites (the so-called narrow “Most Favoured Nation-Clause” or parity clause). In 2015, the FCO prohibited these clauses as anti-competitive, which was finally confirmed by the Federal Supreme Court (decision dated 18 Mai 2021 – KVR 54/20). The detriments to competition (in particular from competing platforms) were considered more severe than the threat for booking.com’s business model from consumers’ freeriding, which booking.com argued to tackle with the clause. The decision dates from the time prior to the new VBER, which now generally allows narrow MFN, and it remains to be seen how German case-law will develop in this field.
Lieferando – immature markets give more leeway for MFN
Similarly to booking.com, the online platform for food delivery Lieferando required its vendors to match the prices offered on the Lieferando platform with those of their own sales channels (mostly restaurants). Here, the FCO considered market conditions and the degree of consolidation and competition to be different from the booking.com case, and it decided not to intervene, terminating its investigation in 2023.
Ordermann – a complaint alone does not make a case, MAP
Following a retailer’s complaint, the FCO investigated whether this Austrian supplier of mobile payment systems for restaurants had required its retailers to agree to RPM. The FCO did not find sufficient evidence for such a systematic approach and closed the case in 2022 without a final decision. However, it made clear in its press release that the use of Minimum Advertising Prices is generally prohibited and can amount to RPM. It also made reference to the new Vertical Guidelines of the EU Commission, stating that the promotion of resale prices is a relevant competition element for retailers and must not be restricted by the supplier.
Stihl – the risks of non-compete clauses
The leading chainsaw and gardening equipment company runs a two-tier selective distribution system. Members of the second tier “Stihl Service” benefitted from special purchase conditions but had to agree to a non-compete preventing them from selling competing products from other manufacturers. Following a complaint from a distributor, the FCO investigated the market and the distribution system. Stihl abandoned the non-compete clause 2021 before the FCO came to its decision in 2022. It found that Stihl holds market shares of more than 30% in various product segments in Germany and therefore VBER would not be applicable in this case. Given the non-compete’s term of more than five years and the overall market conditions, it also found that an individual exemption was not available. Interestingly, the FCO argued that the non-compete was apparently not indispensable for the distribution’s purposes since Stihl let it go without substitution. Therefore, the FCO rendered a retroactive decision on the anti-competitive nature of the clause “to set an example” for the entire market, which it found suspicious of additional anticompetitive practices. Stihl appealed against the FCO’s decision to the Higher Regional Court. The appeal is pending.
Key contact: Justus Herrlinger
Last updated: November 2023
Name and the website of the competition authority
Hungarian Competition Authority (GVH)
Description of legal background
Act LVII of 1996 on the Prohibition of Unfair Trading Practices and Restraints on Competition (in Hungarian).
Government Decree 306/2022. (VIII. 11.) on exempting certain categories of vertical agreements from the prohibition of restrictions on competition (in Hungarian).
Link to annual reports
Annual report to the Parliament on the Activities of the Hungarian Competition Authority in 2020.
Annual report to the Parliament on the Activities of the Hungarian Competition Authority in 2021.
Annual report to the Parliament on the Activities of the Hungarian Competition Authority in 2022.
Can participants to vertical agreements benefit from leniency?
Yes, but only resale price maintenance is covered.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
In light of the economic impact of the COVID pandemic, the GVH undertook to take account of the situation in its decisions: possible effects may include a reduction of the level of the fine and / or granting the possibility to pay fines in instalments.
The GVH launched an accelerated sector inquiry on 24 February 2022 on the domestic market for COVID-19 rapid antibody tests. Among other things, the GVH assessed whether the marketing communication towards resellers and customers corresponds with the actual performance of the products as defined by the manufacturer. As a result, the GVH recommended best practices to be followed in the context of marketing communication.
Recent cases
GVH decision No. VJ/41/2017. (Nitrogénművek) – a record HUF14.1 billion fine for RPM, import restrictions and market sharing in October 2021
Nitrogénművek, a manufacturer of artificial fertiliser, set the resale prices of its products and the scope of customers to whom resellers were permitted to sell. In order to restrict imports from abroad, Nitrogénművek also required significant annual minimum quantities and exclusivity from its resellers. The GVH found that Nitrogénművek had developed a complex system of agreements that aimed at restricting the pricing of the products that it manufactured, while specifying expected order volumes under the threat of high penalties and applying exclusivity clauses, which were intended to limit the purchase and sale of substitute products.
In addition, an affiliate of Nitrogénművek (which also engaged in the distribution of Nitrogénművek’s products) shared customers with other, independent distributors. The case is currently pending on appeal before the Hungarian courts.
GVH decision No. Vj/8/2018 (Yamaha) – HUF101 million fine for RPM in June 2022
The Competition Council imposed more than HUF101 million in fines on the parties. According to the GVH’s decision, Yamaha, a manufacturer and distributor of a wide range of musical instruments, fixed minimum resale prices for its products to its dealers, which hindered retail competition for consumers. The investigation also found that several domestic and one Slovakian musical instrument retailer coordinated their prices with each other for almost ten years in order to establish a uniform price level for consumers.
GVH decision No. VJ/41/2018. (Casio) – HUF325 million fine for RPM in June 2022
The GVH imposed a HUF325 million fine on the Hungarian distributor of Casio-branded watch and musical instrument products, as well as on the distributor’s Czech parent company, for illegally setting minimum online retail prices for their products over a period of several years. The companies had published “recommended retail prices” for their distributors - but the application of these prices was not only recommended, but rather constantly monitored and, in the case of discrepancies, online retailers were immediately warned, thereby eliminating competition for customers.
GVH decision No. Vj/97/2016 (Paradox) – HUF549 million fine for RPM and other practices in December 2019 / Hungarian Supreme Court judgment in April 2022
The GVH fined Paradox for a number of vertical infringements, including RPM, the prohibition of sales on the internet, and a restriction of passive sales by distributors and retailers. Importantly, the GVH in the end only established the infringement under Article 101 of the TFEU and not under the relevant provisions of Hungarian competition law. The reason for this is that at that time, the de minimis exception was still available for such conduct under Hungarian law, provided that the parties market share did not exceed 15%.
The GVH’s decision was challenged before the courts, and the Hungarian Supreme Court finally found that the GVH did not sufficiently prove an appreciable effect on trade between Member States, which would have been necessary for the application of Article 101 of the TFEU. The Hungarian Supreme Court took the view that in order to prove such effects (including an assessment of the relevant market shares to underpin such effects), a higher standard of proof is applicable, which was not met by the GVH’s decision.
Key contact: Zoltán Marosi, Gábor Fejes
Last updated: November 2023
Name and the website of the competition authority
The Competition and Consumer Protection Commission (CCPC)
Description of legal background
Section 4(1) of the Competition Acts 2002-2022 (the Act) prohibits anticompetitive agreements between undertakings and is the Irish domestic law equivalent to Article 101(1) of the Treaty on the Functioning of the European Union (TFEU).
Section 4(3) permits the CCPC to declare in writing that a specified category of vertical agreements, decisions or concerted practices are not prohibited by Irish competition law. The aim of a declaration is to provide useful guidance on vertical agreements, and to ensure that firms can avail of the exemption provided for by the declaration. Any declaration issued by the CCPC operates in the same way as a block exemption issued by the European Commission.
The CCPC published a Declaration in Respect of Vertical Agreements and Concerted Practices (Declaration) in March 2023. The previous declaration was published in December 2010. The Declaration is valid from 1 March 2023 until 31 December 2034. The Declaration closely resembles Commission Regulation (EU) 2022/720 (the Vertical Block Exemption Regulation, “VBER”). The European Commission has also published Guidelines on Vertical Restraints.
Article 3 of the Declaration outlines the following exemption:
This Declaration does not apply to vertical agreements entered into between competing undertakings, except where competing undertakings enter into a non-reciprocal vertical agreement and one of the following applies:
- the supplier is active at an upstream level as a manufacturer, importer, or wholesaler and at a downstream level as an importer, wholesaler or retailer of goods, while the buyer is an importer, wholesaler, or retailer at the downstream level and not a competing undertaking at the upstream level where it buys the contract goods; or
- the supplier is a provider of services at several levels of trade, while the buyer provides its services at the retail level and is not a competing undertaking at the level of trade where it purchases the contract services.
The CCPC has also issued a Notice in Respect of Vertical Agreements and Concerted Practices in order to provide guidance on how interested parties/undertakings may assess vertical agreements, so as to ensure that they can avail of the exemption provided for by the Declaration.
Link to annual reports
Can participants to vertical agreements benefit from leniency?
No, the CCPC’s Administrative Leniency Policy for Cartels is confined to horizontal agreements.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
- Previously, the CCPC only had the power to investigate a suspected breach of competition law and decide whether to initiate either civil or criminal proceedings in the courts. The CCPC regularly entered agreements or settlements with, or obtained commitments or undertakings from, businesses that it found had breached competition laws.
- In late 2023, major changes to the Competition Act are to be commenced. These will provide the CCPC with the power to find that an undertaking has breached competition law and to impose fines. On summary conviction, the CCPC may impose a fine of up to EUR5,000, however on indictment, the CCPC may now impose a fine of up to EUR50 million or 20% of an undertaking’s turnover in the previous financial year, or imprisonment for a term of no more than 10 years.
- In the realm of enforcement relevant for vertical agreements, one key change commenced in 2023 will now enable the CCPC to apply its Administrative Leniency Policy dated August 2023 (ALP) in respect of resale price maintenance (RPM). This is notable as the CCPC takes a strict view of conduct that may form RPM – and has previously enforced in this area, as illustrated below.
- Finally, it is worth noting that the Grocery Goods Undertakings Regulations 2016 (Regulations) provide additional considerations relevant for the grocery sector. The regulations are intended to prohibit certain ‘unfair’ supply chain practices by grocery retailers and suppliers and to curb abuses due to buyer power held predominantly by retailers. The unfair practices covered by the Regulations relate to the form of contracts between suppliers and retailers, including how such contracts are varied, terminated or reviewed.
Recent cases
Chairs Limited trading as Coach House (September 2021)
The CCPC initiated an investigation to determine if Coach House engaged in resale price maintenance (RPM) by enforcing suggested selling prices on four resellers of its products in the State.
Coach House denied any infringement and engaged cooperatively with the CCPC agreeing to give a commitment not to engage in RPM. In particular, Coach House agreed to refrain from imposing or agreeing any terms and conditions that placed obligations on its resellers to adhere to Coach House’s suggested, minimum or fixed resale prices for household furniture products; and from restricting the ability of resellers to independently determine the resale price of household furniture products.
Booking.com (October 2015)
The CCPC found that certain terms and conditions of Booking.com, that obliged hotels to offer their best price on the site, were disproportionate and restricted commercial freedom.
Booking.com agreed to alter its terms and conditions and signed an Agreement and Undertaking which initially took effect for a period of five years. In September 2020, the CCPC and Booking.com mutually agreed to extend the duration of the initial commitments until 1 July 2023.
Brazil Body Sportswear (April 2013)
The CCPC found that Brazil Body Sportswear (BBS) had infringed section 4 of the Act and Article 101 TFEU by implementing a policy of RPM in relation to the sale of products. Further, BBS’ terms and conditions required retailers not to sell products through mail order, internet or other electronic means without prior written consent of BBS, required retailers to resell the products only to third parties within Ireland, and prohibited sales of the products to other resellers and various specified outlets.
The CCPC was satisfied with the legally binding commitments provided by BBS, which included an undertaking to advise retailers of their freedom to price the products at their own discretion and to supply the products to any customer regardless of location.
Key contact: Darach Connolly, Emer McEntaggart, Jo Kane
Last updated: November 2023
Name and the website of the competition authority
Autorità Garante della Concorrenza e del Mercato (ICA)
Description of legal background
Article 101 of the Treaty on the Functioning of the European Union (TFEU) is directly applicable in Italy. In addition, the national competition law (i.e. Article 2 of Law No. 287/1990 – the Italian Competition Act) prohibits all agreements between undertakings which have as their object or effect the prevention, restriction or significant distortion of competition within the national market or a substantial part of it, including vertical agreements.
According to the applicable provisions, the Italian rules on competition must be interpreted in line with EU competition laws and principles, including Regulation (EU) 2022/720 and the related guidelines on vertical restraints, which apply in Italy.
Link to annual reports
Can participants to vertical agreements benefit from leniency?
According to the ICA’s guidelines on leniency programmes, the ICA considers that vertical restrictions are less difficult to identify and/or investigate and therefore leniency programmes are not applicable to such infringements. However, the ICA recognises that participants in a cartel that included some vertical elements may apply for leniency.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
In May 2023, the ICA issued a communication pertaining to settlement procedures. Although not expressly provided by the communication, it appears that the settlement procedures are, in principle, also applicable to vertical anti-competitive practices.
As for COVID-19 related issues, the ICA issued a communication on 24 April 2020 describing the criteria used in assessing agreements between undertakings aimed at tackling issues linked to the scarcity, distribution and carriage of essential goods and services during the pandemic. The communication is mainly addressed to cooperation agreements.
Recent cases
I854 Case – Fornitura di integratori alimentari (closed on 3 December 2021)
The ICA opened proceedings in order to ascertain a possible infringement of Article 101 of the TFEU by a company active in the production and marketing of pharmaceutical products, medical equipment and nutritional supplements, with reference to the relationship with its online distributors. In particular, the ICA investigated the imposition of minimum resale prices and online sales restrictions on third-party platforms. The ICA closed the proceedings with a decision obliging the investigated party: (i) not to impose, directly and/or indirectly, resale prices on its distributors; (ii) not to limit the possibility for distributors to sell the products on all available channels, including online third-party platforms; (iii) to inform its agents that resellers are free to determine the resale prices in every sale channel.
I848 Case – Problematiche concernenti l'attività di promozione nel mercato dell'editoria scolastica (closed on 24 May 2022)
The ICA opened proceedings in order to ascertain the existence of a possible infringement of Article 101 of the TFEU within the publishing sector concerning the inclusion of specific clauses in agreements between publishers and promoters likely to limit the promoters' ability to take mandates from several competing publishers. Pursuant to such clauses, promoters would not have been able to enter into an agreement with new publisher(s) without having been authorised by the publisher already represented. The ICA closed the proceedings with a decision obliging the publishers to, among other things, stop using the contested clauses.
I801AA – Servizio di prenotazione di trasporto mediante Taxi – Roma (closed on 11 January 2022) and I801BB – Servizio di prenotazione di trasporto mediante Taxi – Milano (closed on 21 September 2021)
The ICA opened proceedings I801A and I801B in order to ascertain a possible infringement of Article 101 of the TFEU and Article 2 of Law No. 287/1990 by the main radio-taxi services companies active in Rome and Milan.
The proceedings focused, among other things, on the exclusivity clauses included in the radio-taxi services companies’ regulations, which set out the conditions under which taxi drivers can access their services. With its infringement decisions issued in 2018, the ICA concluded that such exclusivity clauses amounted to an anti-competitive vertical restraint. However, the ICA did not consider the infringement serious and did not impose any fine on the radio-taxi services companies.
In 2019, the ICA’s decision was annulled by the Administrative Court of First Instance. With decisions issued in 2020, the Council of State upheld the ICA’s decision, confirming that the exclusivity clauses at issue raise “specific antitrust concerns in the presence of parallel networks of similar vertical agreements, implemented by competing suppliers or purchasers, that are likely to produce a cumulative anticompetitive effect, capable of limiting the entry of new players into the market”. Following the decisions of the Council of State, the ICA opened two proceedings in order to ascertain whether the investigated radio-taxi services companies complied with the infringement decisions in 2018. The proceedings closed in 2021 and 2022, respectively, and the ICA found that the radio-taxi services companies had not complied with the infringement decisions and imposed administrative fines of EUR 5,000 (in proceedings I801B, closed in 2021) and EUR 21.000 (in proceedings I801A, closed in 2022).
Key contact: Alessandro Boso Caretta, Domenico Gullo
Last updated: November 2023
Name and the website of the competition authority
Autoriteit Consument & Markt (ACM)
Description of legal background
Anti-competitive vertical agreements fall under the Cartel prohibition laid down in Art. 6 of the Dutch Competition Act (Mededingingswet, Mw), which can be viewed as the national equivalent of Art. 101 of the TFEU.
In July 2022, the Dutch competition authority published a (revised) guidance document on the application of the cartel prohibition to vertical agreements between suppliers and buyers (Guidelines on arrangements between suppliers and buyers).
A national de minimis exemption applies to agreements to which less than eight undertakings are a party, provided that their combined turnover is less than EUR5.5 million when they trade in goods, or less than EUR1.1 million in other cases (article 7 of the Mw).
Link to annual reports
Annual reports ACM 2020, 2021 & 2022
Can participants to vertical agreements benefit from leniency?
No
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
In September 2021, the ACM imposed a fine on Samsung Electronics for resale price maintenance, which was the ACM’s first enforcement action with respect to a vertical agreement in almost 20 years. In July 2022, the ACM published a guidance document on the application of the cartel prohibition to vertical agreements between suppliers and buyers. In this document, the ACM indicates which vertical agreements are exempted from the cartel prohibition and it provides examples on reviewing non-exempted agreements for conformity with competition law.
Recent cases
- The ACM found that online selling prices for a leading manufacturer of televisions by various retailers were impermissibly influenced for a six-year period. According to the decision, the supplier tracked retail prices through spider software and urged retailers to adjust their prices if these were considered too low. It also sometimes acted when a retailer complained about another retailer’s prices being too low.
- The ACM did not accept the defence that it had only communicated non-binding individual price recommendations to the retailers, as retailers were also informed of the recommendations made to other retailers. According to the ACM, these multilateral recommendations facilitated price increases.
- The ACM established a violation of the cartel prohibition of Art. 101 of the TFEU and Art. 6 of the Mw and imposed a EUR39,875,000 fine. The retailers were not fined.
- The appeal was lodged and the case is pending before the court of first instance.
Selective distribution case (Court of Appeal Amsterdam, 14 July 2020)
- One of the suppliers had ended its selective distribution agreement with Action Sport (Sicily, Italy) because it kept selling products through third-party platforms, while the selective distribution system in question restricts the use by distributors of third-party platforms for the sale of the contract goods.
- The Court of Appeal held that the restriction was valid, as: (i) having a selective distribution agreement under the VBER is not limited to luxury products (so it was irrelevant for the case whether products in question could be considered as luxury products); and (ii) the supplier did not maintain a total ban on online sales.
- The Court of Appeal ruled that the supplier was entitled to end the relationship with Action Sport without Action Sport being entitled to damages.
Case distribution agreement (Preliminary relief judge of the Court of Amsterdam, 22 December 2020)
- A bicycle producer wanted to end its distribution agreement because one of its dealers sold (unassembled) bicycles with a big discount on the internet. According to the producer, this ‘price dumping’ in combination with the fact that its selective distribution system only allowed for the sale of assembled bicycles were sufficient grounds for termination.
- The dealer started summary proceedings to prevent the producer from terminating the distribution agreement.
- The judge ruled that if the producer exerted pressure on its distributors to maintain a minimum resale price, this amounted to (unlawful) vertical price maintenance, which rendered the producer’s instructions null and void, so these could not be grounds for terminating the agreement.
- The judge further ruled that the requirement to only sell assembled bicycles can be justified on the grounds of quality and is valid under competition law. However, in this particular case, the distributor’s violation of this provision was considered insufficient grounds for termination, in view of the very long relationship of over 30 years, while only two single violations had been proven by the producer.
Key contact: Leon Korsten, Martijn van Wanroij
Last updated: November 2023
Name and the website of the competition authority
Konkurransetilsynet (Norwegian Competition Authority (NCA))
Description of legal background
The Norwegian Competition Act (LOV-2004-03-05-12). Section 10 corresponds to Article 101 of the TFEU.
The former Vertical Block Exemption Regulation, (EU) 330/2010, was implemented into Norwegian law as a national regulation (FOR-2010-06-21-818). This regulation expired on 31 May 2022. The revised Vertical Block Exemption Regulation (VBER), (EU) 2022/720, is currently being assessed by the EEA member states and is expected to be formally implemented into Norwegian law through the EEA Agreement. However, Norwegian authorities always interpret the enforcement of Section 10 (3) (corresponding to Article 101 (3) of the TFEU) in the light of relevant EU Regulations, which in practice means that (EU) Regulation 2022/720 is being indirectly enforced in Norway today. Accordingly, the formal position until the revised 2022 VBER is implemented into the EEA Agreement and national law is that exemptions from Section 10 (1) may only be accepted after a specific assessment of whether the relevant agreement falls within the scope of Section 10 (3).
However, as a temporary solution, the Norwegian government has adopted national regulations on the application of Section 10 (3) on certain vertical agreements, e.g. agreements on R&D (FOR-2023-03-17-349) and certain groups of specialisation agreements (FOR-2023-03-17-350). These national regulations are in force until 30 June 2023, and their content is presumed to be in line with the revised VBER.
Additionally, Norway has - through the EEA Agreement - implemented the Motor Vehicle Block Exemption Regulation (461/2010) into its national regulations (FOR-2010-08-24-1214). This regulation expires on 31 May 2023. However, it is presumed that the content of this regulation will be extended accordingly with the European Commission's extension of the Motor Vehicle Block Exemption Regulation (2023/822).
Link to annual reports
Annual report of NCA 2022 (only in Norwegian)
Annual report of NCA 2021 (only in Norwegian)
Annual report of the NCA 2020 (only in Norwegian)
Can participants to vertical agreements benefit from leniency?
Yes
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
The Norwegian government has ordered market-specific studies of the vertical integration of players within the Norwegian grocery sector, to assess whether any political measures should be implemented.
Additionally, the Norwegian government has proposed the implementation of a regulation on price discrimination for suppliers to the Norwegian grocery sector and a prohibition on restrictive covenants (in Norwegian: negative servitutter) and exclusive lease agreements for grocery chains. Both proposed regulations have been subject to a consultation process and are under currently subject to further assessment.
Apart from the above, vertical agreements do not appear to be prioritised by the NCA or legislative bodies.
However, it is worth noting that the Norwegian government has initiated a public consultation process (with the consultation feedback deadline in June 2023) concerning a new market investigation tool that the NCA may decide to use to uncover and address competition concerns. In essence, the market investigation tool will allow the NCA to conduct a market investigation and subsequently impose behavioural or structural remedies to overcome any structural impediments to competition that are uncovered in the investigated market, particularly in circumstances before a finding and/or where there has not been any finding of infringement of competition rules.
Recent cases
In one recent merger case, the NCA imposed behavioural vertical remedies, namely in Nortura SA's acquisition of Steinsland & Co AS. The NCA was concerned that the merger would lead to a significant impediment to effective competition in the market for the breeding and sale of day-old laying hens, as well as in the market for the sale of eggs to grocery and catering businesses. As part of the proposed remedies, Nortura has committed to:
- supply day-old laying chickens or pullets on non-discriminatory terms to egg manufacturers that supply competing egg packers; and
- not discriminate against consumer egg manufacturers based on which supplier or breed of hen is chosen for purchasing laying hens (duration of 10 years).
Key contact: Line Voldstad
Last updated: November 2023
Name and the website of the competition authority
Urząd Ochrony Konkurencji i Konsumentów (UOKiK) (in English: Office of Competition and Consumer Protection)
Description of legal background
The basic national legislation on competition law is the Act on Competition and Consumer Protection (in Polish: Ustawa z dnia 16 lutego 2007 r. o ochronie konkurencji I konsumentów) and the Regulation of the Council of Ministers of 22 May 2023 on the exclusion of certain types of vertical agreements from the prohibition on restrictive agreements (in Polish: Rozporządzenie Rady Ministrów z dnia 22 maja 2023 r. w sprawie wyłączenia niektórych rodzajów porozumień wertykalnych spod zakazu porozumień ograniczających konkurencję).
Another act that may be relevant in connection with competition law is the Act on Combating Unfair Competition (in Polish: Ustawa z dnia 16 kwietnia 1993 r. o zwalczaniu nieuczciwej konkurencji).
Link to annual reports
See here.
Can participants to vertical agreements benefit from leniency?
Yes, vertical agreements are covered. However, the party abetting other parties in participating in an anti-competitive agreement cannot benefit from the full exemption, e.g., UOKiK’s decision no. RKR-1/2021 of 22 April 2021. But it is possible to apply for a reduction of the fine, e.g. UOKiK’s decision no. DOK-4/2020 of 28 October 2020 (Yamaha).
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
UOKiK perceives vertical agreements as a less serious infringement of competition law than horizontal agreements, although such agreements have been challenged in the last few years, especially concerning RPM and online sales restrictions.
The main challenge of COVID-19 in terms of economic and competition law was the need to support businesses and consumers. In response to the needs of businesses, UOKiK set up a special e-mail address for the duration of the pandemic: covid-konkurencja@uokik.gov.pl. The aim was to provide informal opinions (issued by UOKiK) on the compatibility with competition law of temporary measures planned by businesses in response to COVID-19.
COVID-19 increased the UOKiK's interest in some sectors, such as medicine, pharmaceuticals, agriculture and retail (especially online sales, which became more popular as a result of the restrictions introduced due to the pandemic).
Recent cases
Yamaha Music Europe (2020)
Alleged practice concerned RPM. Initially, the prices were set by Yamaha Music Europe by using a specific mathematical formula; afterwards, an online price list was used to determine the minimum prices.
The UOKiK found that for 13 years Yamaha Music Europe had been sending its distributors catalogues setting minimum prices for music equipment sold in online shops. Yamaha imposed sanctions on any distributor that tried to sell music equipment at a lower price.
During the proceedings, the company applied for a reduction or waiver of the fine under the leniency programme. The company was not granted full immunity from fines (as the evidence showed that Yamaha solicited its business partners to participate in the anti-competitive agreement), but it was granted a 50% reduction of the final amount of the fine, and then a further 10% as it voluntarily submitted to the penalty.
The decision was issued because of cooperation between the UOKiK and national competition authorities in other EU Member States via the ECN (European Competition Network) platform. Yamaha Music Europe's practices were also investigated by antitrust authorities from Austria and the United Kingdom.
More information: UOKiK - About us - About us - News - Decision of the President of UOKiK on overpricing of Yamaha musical equpiment
Solgar Polska (2021)
Solgar Polska is a well-known manufacturer of dietary supplements, vitamins, herbs and micronutrients in Poland, and a subsidiary of the parent company, Solgar Inc, which is based in the United States.
It was found that Solgar Polska had imposed a minimum resale price on its distributors. Solgar Polska monitored the prices set by the distributors and took adverse action if any of them sold products at a price lower than Solgar Polska's suggested price. These practices continued until 2010.
The UOKiK issued a decision in which it fined Solgar Polska PLN1.2 million (approx. EUR267,000) and two members of its management board a total of more than PLN250,000 (approx. EUR55,500).
More information here.
Kärcher (2022)
According to the decision, the evidence gathered by the UOKiK showed that since the end of the 1990s, the company, in cooperation with its distributors, had been setting minimum and rigid retail prices for Kärcher cleaning devices and systems.
As result, the UOKiK imposed a fine of approx. EUR5,800,000) on the company. Karcher made a preliminary application to join the procedure for voluntary submission to penalty but, having examined the amount of the fine, it withdrew from the procedure. Karcher appealed against the decision (the proceedings are still pending).
More information here.
Merida Polska (2023)1
Merida Polska is a local Polish distributor of Merida bicycles. Between 2014 and 2020, the company banned its dealers from selling online. A retailer that had bicycles in its bricks-and-mortar range could only display products on its website and only allow remote ordering, but with personal collection.
The rules introduced by Merida made it impossible to send goods to customers and resulted in an actual, territorial market division. Consumers did not have access to more attractive online offers, which may have led to higher prices.
The UOKiK found that the anti-competitive agreement was supported by informal activities based on e-mails and telephone contacts as well as face-to-face meetings between Merida Polska and its distributors.
As a result, the UOKiK issued a decision in March 2002 imposing a fine of PLN2.4 million (approx. EUR511,738) on Merida Polska.
More information here.
1The decision itself was issued in March 2023, but the proceedings were initiated in 2021.
Key contact: Michal Orzechowski, Agnieszka Staszek
Last updated: November 2023
Name and the website of the competition authority
Description of legal background
The Portuguese Competition Authority (PCA) acts pursuant to Law 19/2012 (Competition Act), which establishes its duties, powers and overall mission. The Competition Act was subject to significant amendments in 2022. The PCA’s bylaws were also subject to amendments in 2022. The PCA is also subject to the European legal framework regulating competition in the EU, although block exemptions apply, even when trade between Member States is not affected.
Link to annual reports
The PCA publishes an annual report on its activity, management, and accounts. The 2022 report (last one published) can be found on the following link.
Can participants to vertical agreements benefit from leniency?
No, Article no. 75 of the Competition Act restricts leniency to agreements or concerted practices between two or more competing undertakings, meaning it only applies to cartels and not to vertical restrictions.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
In 2021, the PCA made the detection and investigation of any practices exploiting the pandemic situation a priority, whether those practices were vertical or horizontal. The focus on e-commerce was reinforced since its importance grew even bigger during COVID-19.
In 2022 and 2023, the PCA’s main priority has been the reinforcement of its activity in the detection and investigation of anti-competitive practices, particularly in the labour and digital markets.
During the period 2020-23, the PCA issued 10 final condemnatory decisions in the food and drinks retail sector for alleged “hub-and-spoke” schemes. According to the PCA, this practice constitutes both a vertical and a horizontal agreement, since the retailers did not communicate directly with each other, but rather used bilateral contracts with suppliers to promote or ensure that they all applied the same retail prices. These cases made the fines applied to vertical agreements grow exponentially compared to previous years.
Recent cases
Hub-and-spoke cases in the retail sector (2020-2023)
Cases PRC/2017/1, PRC/2017/3, PRC/2017/4, PRC/2017/5, PRC/2017/6, PRC/2017/7, PRC/2017/8, PRC/2017/11, PRC/2017/12, PRC/2017/13
In the last years, the PCA has issued a number of hub-and-spoke decisions against retail chains and different suppliers.
In 2020, two decisions were issued involving two drinks suppliers (Primedrinks and SCC) and several major retail chains. Both cases regard violations of Articles 101 of the TFEU and 9 of the Competition Act, with fines amounting to EUR335,248,000. The companies in question appealed against the PCA’s decision to the Competition Court.
The Constitutional Court has recently declared that the mandate used by the PCA to seize the evidence used to support its decisions in these cases was insufficient as it was not granted by a judge. The effects of this judgment on the cases have yet to be determined.
Medical Devices Distribution case (2021)
Case PRC/2020/3
The case involves a vertical agreement between Natus Medical Incorporated, a company that supplies the Portuguese market with medical devices, and its national distributors, Mundinter and Sano-Técnica.
Following the violation of Articles 101 of the TFEU and Article 9 of the Competition Act, the PCA fined Natus EUR100,000, considering the fact that the parties reached a settlement agreement with the PCA that included the admission of the facts and the waiving of the possibility of judicial review.
This case is relevant because it first showed the PCA’s focus on the medical market, particularly during the pandemic, with other cases on this market following.
Food supplements case (2022)
Case PRC/2022/1
In this case, the PCA fined Farmodiética, a supplier of food supplements on the Portuguese market, for Resale Price Maintenance.
The fine imposed by the PCA for the violation of Article 101 of the TFEU and Article 9 of the Competition Act was EUR1,258,900. The company chose not to appeal against the decision and opted for settlement proceedings during the investigation, which included accepting its responsibility for the infringement and waiving the judicial review.
This was the only decision issued by the PCA in 2022 that concerned solely a vertical agreement.
Dietetic products Case (2023)
Case PRC/2022/7
Once again, the PCA sanctioned a company, Dietmed, a relevant wholesale distributor of food supplements and healthy foods in Portugal, for fixing the resale prices of its products sold by independent distributors.
This behavior, better known as RPM - “Resale Price Maintenance” - is considered a serious infringement of competition and corresponds to the violation of articles 101 of the TFEU and 9 of the Competition Act.
The company was charged with a EUR1,040,000.00 fine.
Key contact: Miguel Pereira
Last updated: February 2024
Name and the website of the competition authority
Romanian Competition Council (Consiliul Concurentei)
Description of legal background
The main competition law act applicable in Romania is the Competition Law no. 21/1996, as further amended and supplemented. It is not available in its most recent form on the website of the Romanian Competition Council (RCC). The English version is dated 4 October 2012. The Romanian version is dated 27 February 2016.
There are no local block exemption regulations applicable in Romania. The block exemption regulations applicable are those set forth at EU level.
Link to annual reports
The synthesis of the RCC annual report for 2020
The synthesis of the RCC annual report for 2021
The synthesis of the RCC annual report for 2022
Can participants to vertical agreements benefit from leniency?
Yes, vertical agreements and/or concerted practices can benefit from leniency.
Significant legislative changes enacted in 2018/2019:
The RCC adopted new guidelines relating to conditions and criteria for the application of its leniency policy in July 2019. The main changes refer to a larger scope for leniency applications (no longer being limited to serious violations of the law), the obligation not to destroy evidence being extended to the period when the entity is contemplating making its leniency application, and a new requirement for current employees to be available for interviews and to use reasonable efforts to make former employees available. Also, the obligation of the undertaking applying for leniency to stop its involvement in the alleged anti-competitive agreement at the latest when the leniency application was filed is nuanced in the sense that such involvement may continue if, in order to ensure the integrity of the investigations/inspections, the RCC decides differently.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
- We may expect an increased use of forensic procedures by the RCC during dawn raids, including in circumstances where: (i) the undertaking disputes that a particular document originated from one of the company’s devices; or (ii) there is a risk of alteration of the data stored electronically.
- The number of leniency applications is also expected to grow as the RCC is taking active steps to promote its leniency policy towards companies.
- The number of cases where investigated parties acknowledge their alleged participation in an anti-competitive practice in order to receive reductions is also likely to remain significant.
- The RCC will likely continue to focus on bid rigging in public procurement.
- The start of the COVID-19 pandemic lead to an considerable increase in the number of complaints on the online whistleblowing platform implemented by the RCC, the edge being during the state of emergency at the very beginning of the pandemic when the main subjects of complaints referred to the commercialisation of protective masks, sanitary material, pharmaceutical products and food products.
- Many state aid measures were adopted in order to limit the negative effects of the COVID-19 pandemic and to support economic recovery.
There is currently an increased focus of the RCC on vertical agreements – two important investigations concerning vertical relationships are on-going: one concerning possible agreements and/or concerted practices for fixing selling prices on the electronic and IT&C products market in Romania by Samsung Electronics Romania SRL and its partners, including Altex Romania SRL, Flanco Retail SA and Dante International SA (launched in 2021 based on information received on the Competition Whistleblowing Platform) and another one (launched in 2022) concerning possible agreements for price fixing between Pioneer Hi-Bred Romania, DuPont Romania, Syngenta Agro, Monsanto Romania and Maisadour Semences Romani at least with the distributor Agricover Distribution as well as potential restrictions of sales between Maisadour Semences Romania and the distributor Agricover Distribution on the market for crop seeds and products for plant protection.
Before 2017, vertical restraints cases were an important point on the RCC’s agenda, as at least 25% of the investigations finalised each year related to vertical agreements. Starting in 2017, there has been a shift in the RCC’s enforcement focus from vertical agreements to cartels and abuse of dominance. As such, between 2018 and 2022, only four investigations regarding vertical agreements were finalised (based on the RCC 2022 Annual Report): two in 2018, one in 2021, and one in 2022.
Therefore, since 2018, the enforcement activity of the RCC has been mainly focused on cartels, in particular bid rigging and exchange of commercially sensitive information between competitors (especially within trade associations).
The most prominent case related to vertical restraints sanctioned by the RCC in the period 2020 – 2023 refers to the market for the distribution of new medium and hard Renault trucks (case no. 144/2022). No information has yet been published on the website of the RCC, therefore all information is based only on RCC press releases regarding the case.
Recent cases
Following an analysis, the RCC established that one of the trucks manufacturer and the distributors in its selective distribution network were parties to anti-competitive agreements in the period 2005 – 2014. These agreements referred to restrictions of the territory in which the distributors could resell new medium and hard Renault trucks and established that they should not sell them outside Romania.
Market sharing agreements were negotiated and signed by local subsidiary of the truck manufacturer in Romania with the distributors. Through these agreements, the companies no longer competed with each other and clients did not have the possibility to choose, which affected competition at the national level, as well as trade between EU Member States.
An investigation was launched following a leniency application of one of the distributors, which received immunity from being fined in exchange for cooperating with the RCC.
Following the investigation, the truck manufacturer was fined RON13.2 million (approximately EUR2.7 million).
According to publicly available information, the truck manufacturer did not appeal against the fine – it admitted the infringement of the Competition Law and, consequently, the fine imposed by the RCC was reduced.
Key contact: Alina Lacatus, Razvan Pele
Last updated: November 2023
Name and the website of the competition authority
Description of legal background
Section 4(3) of Act No. 187/2021 Coll. on the Protection of Competition and on Amendments to Certain Acts (the Act) regulates prohibited agreements that restrict competition (available in English).
Moreover, in order to minimise legal uncertainty with regard to vertical agreements and to increase the predictability of proceedings at the Office, the Office issued a communication on its view of vertical agreements (available in Slovak). The aim of the communication is to explain how the Office perceives different forms of vertical agreements and what factors are considered.
The Office applies Section 4 of the Act to vertical agreements, Art. 101 of the TFEU (the main features of agreements that restrict competition pursuant to Section 4 of the Act are practically identical to Art. 101), and the relevant European case law of the Court of Justice and the European Commission, including relevant guidelines.
Link to annual reports
Can participants to vertical agreements benefit from leniency?
No
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
In 2021, the Office issued only one decision in relation to verticals, which came into force in the same year. This decision imposed obligations due to competition concerns identified in the preliminary assessment of a possible violation of competition rules (market sharing, customers allocation) by an entity selling original ink and toner cartridges for printing devices, copiers and fax machines to public sector customers. The aim of the imposed obligations was to eliminate the possible restriction of competition. Please refer to Výročná správa PMÚ SR 2021 - Annual Report AMO SR 2021 (gov.sk).
In 2021, the Office received fewer complaints than in the previous years, but it carried out the same number of investigations and administrative proceedings as in the previous year. The largest number of vertical anti-competitive practices during the previous years concerned the sector of sale and manufacture of vehicles.
Pursuant to the published Plan of the main tasks of the Office for 2021, in terms of anticompetitive practices, the Office is to focus on cartels, vertical agreements (RPM), and bid rigging. Prioritised sectors include e-commerce, digital platforms, automotive, healthcare and IT.
Recent cases
No reported cases in the last three years.
Key contact: Daniela Koncierova
Last updated: November 2023
Name and the website of the competition authority
Comisión Nacional de los Mercados y la Competencia (CNMC)
Description of legal background
Law 15/2007 of 3 July on the Defence of Competition (Official version in Spanish; Non-official English translation by CNMC).
Royal Decree 261/2008 of 22 February, approving the Regulation on the Defence of Competition.
EU block exemptions apply (Commission Regulation (EU) 2022/720 and Guidelines on vertical restraints (2022/C 248/01)).
Link to annual reports
Can participants to vertical agreements benefit from leniency?
No, leniency only applies to cartels (horizontal agreements).
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
Vertical restraints have not been a concern for the Spanish authority in the last few years as evidenced by the lack of fines. However, the CNMC has included vertical concerns in its Strategic and Action Plan for the coming years related to vertical practices, particularly in relation to digital markets and the role of gatekeepers. Online advertisers and their vertical relationship are also going to gain relevance in Spanish supervision.
Recent cases
Even though the CNMC has not imposed fines for verticals specifically, between 2020 and 2022 it investigated five instances in which vertical practices were relevant, albeit closing those cases without imposing fines.
Three of them were settled after securing certain commitments to offset the anti-competitive effects of the alleged vertical restrictions:
- In February 2020, the CNMC agreed to close a sanctioning proceeding against one of the leading footwear and sportswear manufacturer dealing with restrictions of online sales and advertising, cross-selling and post-contractual non-compete obligations. Adidas undertook to amend its clauses and remove the ban on cross-selling between distributors / franchisees.
- In September 2021, the CNMC investigated the manufacture of agricultural machinery for allegedly fixing minimum resale prices and restricting passive sales to clients operating outside the exclusive territory assigned to distributors. The proceedings ended with a settlement after the clauses were eliminated from contracts with wholesalers.
- In December 2022, an investigation against the pharmaceutical company ISDIN was settled with commitments. The company was investigated for restricting e-commerce of sunscreen products by fixing resale prices, and its commitments included:
- implementing an objective, transparent and non-discriminatory discount system to avoid linking discounts to adherence to the pricing policy;
- improving the policy for communicating recommended prices;
- fostering an internal culture of compliance, including establishing an early warning system for potential infringements and training staff on competition issues; and
- ensuring that the commercial department does not access certain information (e.g. pharmacy sale prices and business intelligence tools to monitor resale prices).
- The CNMC closed two other investigations without imposing fines or requesting commitments. The first case involved the main food delivery companies and their parallel exclusive contracts with restaurants. The second concerned a pharmaceutical laboratory accused of applying a dual pricing scheme.
Key contact: Joaquin Hervada
Last updated: November 2023
Name and the website of the competition authority
Swedish Competition Authority (SCA)
(Sw: Konkurrensverket)
Description of legal background
The prohibitions in the Swedish Competition Act (2008:579) regarding anti-competitive cooperation between undertakings, Chapter 2 Section 1, and abuse of a dominant position, Chapter 2 Section 7, corresponds to Article 101 and 102 in the TFEU. The Swedish legislation is substantially in line with EU legislation.
Link to annual reports
Annual Report 2022 (in Swedish)
Can participants to vertical agreements benefit from leniency?
Leniency may be applicable for infringements of Chapter 2 Section 1 of the Swedish Competition Act and Article 101 of the TFEU.
A participant may benefit from leniency provided that the necessary conditions stipulated in Chapter 3 Section 12-14 of the Swedish Competition Act are met.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
The SCA published two reports concerning the fuel sector and the food industry. In the report regarding the fuel sector, the authority noted that vertical integration may influence pricing which affects effective competition. Report concerning the fuel sector (in Swedish)
The SCA also noted the vertical (and horizontal) impact on competition in the food supply chain. Report concerning the food industry (in Swedish)
In a more general sense, the strategic initiatives during 2020 - 2022 have continued focusing on competition in digital markets.
Recent cases
Regarding vertical agreements, most investigations during 2020 - 2022 have been dismissed. However, at least two prioritised cases are currently under investigation for suspected retail price maintenance in the aviation and building sectors.
Bruce (2020-07-07) (Dnr 572/2019)
The SCA made an interim decision that the company Im With Bruce AB (“Bruce”) was prohibited from applying exclusivity clauses in its agreements with several fitness studios. Bruce was offering consumers one membership which included the possibility for the consumer to visit several fitness studios without paying each fitness studio a separate membership fee. The SCA found that the exclusivity clauses in Bruce’s agreements with the fitness studios were likely to breach the Swedish Competition Act. The decision was upheld by the Patent and Market Court. In June 2020, Bruce came in with voluntary commitments whereby the company would limit the number of exclusive agreements for a period of two years. The SCA deemed the commitments sufficient to ensure that anti-competitive concerns did not arise during the stated period, and therefore decided to close the investigation against Bruce. The decision to accept the commitments was subject to penalty fines.
Markslöjd (2020-12-16) (Dnr 59/2019)
In 2018, Markslöjd AB (“Markslöjd”), a supplier of lighting products, demanded that the retailer Velltra increase its prices for its home products, otherwise Markslöjd would stop the supply of its products to the retailer. Velltra agreed on partially adjusting its prices in accordance with Markslöjd's demands. Velltra brought the unlawful conduct, and a leniency application, to the SCA's attention. Velltra's leniency application was approved, and thus their fine was annulled. The SCA concluded that Markslöjd had restricted competition and imposed a fine (Sw: avgiftsföreläggande). Until February 2021, a company could accept a that it would be fined for breaching competition rules. The provisions were repealed on 1 March 2021, when the SCA was granted power to decide on administrative fines (Sw: Konkurrensskadeavgift) for breach of competition rules.
Key contact: Erik Brändt Öfverholm
Last updated: November 2023
Name and the website of the competition authority
Antimonopoly committee of Ukraine (AMC)
Description of legal background
Law of Ukraine "On Protection of Economic Competition" dated 11 January 2001 No. 2210-III
Link to annual reports
Report of the Antimonopoly Committee of Ukraine for 2021
Report of the Antimonopoly Committee of Ukraine for 2022
Report of the Antimonopoly Committee of Ukraine for 2023
Can participants to vertical agreements benefit from leniency?
Yes, verticals are covered.
On 1 January 2024, Law of Ukraine No. 3295-IX, significantly amending the competition framework, and introducing, among others, an improved cartel leniency, came into force. Furthermore, on 6 February, the respective new leniency procedure, approved by the AMC, also became effective.
This procedure replaces the former leniency regulations by aligning them more closely with European Union standards. It covers, in particular, the following:
- Grounds for gaining full or partial immunity from fines
- The option of utilising a “marker”
- The opportunity to conduct preliminary consultations with the AMC
In order to benefit from leniency, a cartel participant must submit an application to the AMC, whereby it notifies about the existence of anticompetitive concerted actions and commits to provide the authority with any evidence or information sufficient to initiate a case, or which is sufficient to reach a decision in the case.
Full immunity from fines is applicable only if all of the following conditions are met:
- The applicant notified its participation in the anticompetitive concerted actions earlier than the other participants
- The applicant disclosed the anticompetitive concerted actions to the AMC
- The applicant provided evidence that was not available to the AMC and such evidence is (i) sufficient to initiate a case and is (ii) sufficient for reaching a decision in a case
- The applicant ended its involvement in the alleged cartel immediately following its application, except where such continued cartel participation is necessary for the case review process
- The applicant cooperated with the AMC
Additionally, all other cartel participants not able to gain full immunity are eligible to have the respective levied fines reduced by up to 50% if they disclose their involvement in the alleged cartel, promptly end their involvement in the alleged cartel, cooperate with the AMC, and provide evidence that is sufficient for reaching a decision in the case.
In this regard, the amount of the fine is reduced depending on the ranking priority of the applicants, namely:
- For the first applicant - up to 50%
- For the second - up to 30%
- For other applicants - up to 20%
If an applicant is unable to immediately provide all the relevant information to the AMC, it may alternatively apply for a so-called marker. A marker is an instrument which preserves the applicant’s status as the first party to seek immunity.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
On 1 January 2024, Law of Ukraine No. 3295-IX became effective, introducing, among others, an improved cartel leniency procedure. For more details please see the section above.
Recent cases
Novo Nordisk Case (November 2020)
Novo Nordisk Group supplied its pharmaceuticals through Novo Nordisk A/S and Novo Nordisk Health Care AG to six wholesale distributors in Ukraine.
The terms of the distribution agreements, which were applicable in 2011-2017, envisaged discounts in the form of credit notes for distributors, which caused a difference between nominal and real prices for medicines. This discount mechanism led to unlawful price increases for the products sold via public procurement tenders.
Additionally, distribution agreements provided for recommended resale prices for modern insulin and higher discounts in May 2014 - April 2015, which indicate the possibility of Novo Nordisk Group’s influence on the sale prices of medicines in the supply chain.
Finally, the AMC found that certain agreements included selective (on an individual basis) free supply of Novo Nordisk's medicines to Ukraine, which, under conditions when patients cannot easily switch from one medicine to another, provided stable demand for such medicines in the future.
AMC determined that Novo Nordisk Group companies and the distributors violated competition law by introducing a system of non-transparent pricing for the import of medicines, which led to unjustified price increases during public procurement procedures.
As a result, AMC fined all the companies UAH 188 million (equivalent of EUR5.5 million in November 2020).
The AMC's decision was upheld by the Supreme Court of Ukraine in August 2022.
In 2017-2018, LLC Grundfos Ukraine was selling pumping equipment under the trademark "GRUNDFOS" to dealers based on supply agreements.
The terms of the supply agreements envisaged a minimum level of recommended price for household goods and a minimum selling price for household goods to third parties (resellers) and sanctions for non-compliance.
The AMC found that the terms of the supply agreements contain strict vertical restrictions that directly affect the buyer's ability to establish the selling price of the goods by setting minimum selling prices for the goods and imposing sanctions for non-compliance with the relevant minimum prices.
As a result, AMC fined LLC Grundfos Ukraine and its dealers UAH5.1 million (equivalent of EUR169,000 in July 2020).
Key contact: Galyna Zagorodniuk
Last updated: April 2024
Name and the website of the competition authority
Competition and Markets Authority (CMA)
Description of legal background
Chapter 1, Competition Act 1998
The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022
Link to annual reports
No annual reports, per se; however, the CMA did publish guidance relating to the order, which they will keep under review.
Can participants to vertical agreements benefit from leniency?
For vertical arrangements, leniency is limited to those undertakings and individuals who have participated in price fixing (such as resale price maintenance) activity. However, there is some flexibility where the vertical behaviour facilitates horizontal cartel activity, as leniency is available in principle for such horizontal behaviour.
Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.
In June 2022, the Vertical Agreements Block Exemption Order (VABEO) came into force, representing the new basis for assessing a vertical agreement’s compliance with UK competition law. While the VABEO generally mirrors the EU’s Vertical Block Exemption Regulation (“VBER”), there are some areas of divergence. For example, the VBER seems to take a more relaxed approach to non-compete obligations which are tacitly renewable and retail parity clauses, while the VABEO takes a more flexible approach to selective distribution and exclusive distribution agreements. Following Brexit, for businesses seeking to make agreements which span Europe and the UK, it is therefore important to have an understanding of the varying scopes of the respective block exemptions.
Recent cases
Synthesizers and Hi-Tech equipment (July 2020)
This case concerns vertical agreements between Korg (UK) Limited and one of its resellers, promising not to advertise or sell online synthesizers and hi-tech products below a price specified by Kong UK (resale price maintenance).
This case marks the end of the CMA’s deep dive into the musical instrument industry, which has, all together, been fined GBP13.7 million for various resale price maintenance related activities.
This case emphasises the lengths the CMA will go to fulfil its duties as the country’s competition law enforcement body, creating an inhouse price monitoring software tool which automatically monitors pricing levels amongst musical instrument retailers.
The CMA in particular emphasised the increased dependence of consumers on online shopping following the Covid-19 pandemic, suggesting a renewed focus on illegal activity facilitated by online marketplaces.
In 2018, the CMA opened an investigation into Fender Europe for suspected resale price maintenance. The CMA found that not only did Fender require its guitars to be sold above a minimum price, it also enforced this policy and pressured retailers into raising their online prices once they became aware that the retailers were not following instructions. Further, the CMA found evidence that certain employees sought to conceal their anti-competitive conduct by avoiding writing down information about their activities. It is interesting to note that the origin of this resale price maintenance policy stems from reseller dissatisfaction with their margins, and complaints to Fender requesting high and stable retail pricing set.
Three months into the investigation, Fender admitted its involvement in the infringement and signed a leniency agreement, resulting in the company benefiting from a 60% leniency discount.
The GBP4.5 million fine represents the largest fine imposed in the UK for resale price maintenance.
In 2020, the CMA opened a formal investigation into a suspected competition law infringement by Dar Lighting Limited for imposing restrictions on its reseller’s ability to sell products below a specified price point (resale price maintenance).
This investigation is an interesting case study into why companies should cooperate with the CMA as early as possible. Prior to launching the investigation, the CMA sent two separate ‘warning letters’ to Dar, requesting that it check that its practices were not breaking the law. After the CMA found that Dar had not taken adequate steps to comply with the CMA warnings, the CMA applied a 35% increase on the infringement fine for failing to act on the warnings.
Separately, as part of the CMA’s settlement procedure, after admitting to acting illegally and co-operating with the CMA’s investigation, Dar’s fine was discounted by 20%.
Further, it should be noted that this investigation represents the second time that the CMA has investigated the lighting industry, with the first investigation concluding in 2017 – this shows that the CMA will maintain an active role in the sectors that it investigates.
Key contact: Sarah Smith
Last updated: November 2023
