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Entry into force of new EC rules on distribution

United Kingdom
01/06/2000
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The new EC rules on vertical agreements are now in force. Set out in the EC Block Exemption Regulation on Vertical Agreements of 22 December 1999 and the accompanying Guidelines adopted on 24 May 2000, the new rules indicate how the Commission will apply the general exemption in Article 81(3) EC Treaty to vertical agreements, that is agreements for the sale or purchase of goods or services between companies operating at different levels of the production or distribution chain.

Moving from a formalistic regulatory approach towards a more economic approach, the Commission's new regime aims to simplify the rules for assessing vertical agreements under the EC competition rules, to reduce the regulatory burden for companies lacking market power, whilst ensuring effective control of agreements entered into by companies holding significant market power.

The new Regulation and Guidelines replace three old block exemption regulations on exclusive distribution, exclusive purchasing and franchising agreements. Agreements existing on 31 May 2000 will continue to benefit from the old regulations until the end of 2001.

For a detailed explanation of the Block Exemption Regulation and the Guidelines, please go to LawNow and search under the competition category of the LawNow archive. The articles are dated 5 January 2000 and 30 May 2000.

For further information, please contact Sue Hankey in our London office on Tel: +44 (0)20 7367 2960 or e-mail: [email protected] or Richard Eccles in our Brussels office on Tel: +00 32 2 627 5020 or e-mail: [email protected]

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