There Is A New Vertical Exemption On The Block

Summary

The European Commission published the new Vertical Block Exemption Regulation and related guidelines on May 10, 2022. The purpose of the block exemption is to generally exempt agreements between market players at different levels of the supply chain from the EU's prohibition on anticompetitive agreements if certain market share thresholds are met and provided the agreement does not contain certain prohibited restrictions. This client alert describes the five main changes in the new block exemption relating to dual distribution, most favored nation clauses, sales restrictions in distribution systems, restrictions of online sales, and non-compete clauses. It also highlights a few key areas of divergence with the proposed UK regime.