The European Union`s new Block Exemption Regulation for vertical agreements is set to take effect on June 1, 2022. This new regulation will replace the existing Vertical Block Exemption Regulation (VBER) and associated guidelines, which were introduced back in 2010.

Vertical agreements refer to agreements made between businesses operating at different levels of the supply chain, such as between a manufacturer and a distributor. These agreements typically involve issues such as pricing, territorial restrictions, and exclusivity. The new Block Exemption Regulation governs these types of agreements and specifies the circumstances under which they will be deemed anti-competitive.

Under the new regulation, companies engaging in vertical agreements will need to ensure that their agreements do not restrict competition in the market. To do so, businesses will need to analyze the effects of their agreements and ensure that they comply with the new regulation`s requirements.

The new regulation`s key changes include an updated definition of the relevant market and a new approach to assessing restrictions on online sales. The updated definition of the relevant market takes into account the rise of e-commerce and other digital channels, which have significantly impacted the way businesses operate and compete with each other.

Additionally, the new regulation introduces a new approach to assessing restrictions on online sales. This approach recognizes the increasing importance of online sales channels and allows businesses to impose certain restrictions to protect their brand and ensure their products are not sold on unauthorized websites.

One of the most significant benefits of the new Block Exemption Regulation is its simplified approach to competition law compliance. The new regulation provides greater certainty and clarity for businesses, making it easier to navigate the complex web of competition law rules and regulations.

However, it`s important to note that the new regulation does not provide a complete exemption from competition law rules. Businesses must still conduct a careful analysis of their agreements and ensure that they comply with the regulation`s requirements.

Overall, the new Block Exemption Regulation for vertical agreements is an important development in competition law and will have significant implications for businesses operating in the European Union. Companies should start preparing for the new regulation`s implementation by reviewing their existing agreements, assessing the potential impact of the new regulation, and updating their compliance policies accordingly.