Vertical agreement Definition

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Practical considerations when arranging an international franchise—checklist

Practical considerations when arranging an international franchise—checklist This Checklist sets out the practical considerations for a franchisor when setting up an international franchise business. A franchisor may want to expand its network overseas to exploit new territories and developing markets usually by entering into an international franchise agreement or an international development agreement. However, the agreement and the set up of the international arrangement may also create challenges. This Checklist sets out some of the practical issues that a franchisor planning to expand overseas might face. Issues • The franchise agreement will provide that the franchisee must operate the business in accordance with the franchisor’s operations manual. However the business method as set out in the operations manual may not have been tried and tested in the overseas territory. The business method will have been created on the basis of certain assumptions that are relevant to the local market. A franchisee may therefore find it difficult to implement the business method in the overseas territory based upon existing assumptions. •...

Vertical agreements—checklist

Vertical agreements—checklist This Checklist can be used to help assess compliance of vertical agreements with EU competition law, including under the Vertical Block Exemption Regulation 2022/720 (VBER 2022). For an assessment of the VBER 2022, see further, Introduction to the application of Article 101 TFEU to vertical agreements and The Vertical Block Exemption Regulation 2022/720 Framework for assessment When considering the application of EU law to vertical agreements, it is necessary to consider: • The competition rules under Article 101 TFEU: ◦ Whether the agreement is caught by Article 101(1) TFEU at all (although in practice the VBER 2022 (and other block exemptions) may often be considered before Article 101 TFEU). ◦ Whether the agreement restricts competition at all (this is often overlooked)—some forms of agreement may not be restrictive of competition. Also, agency will fall outside Article 101 TFEU where there is a genuine agency situation (caution is advised here as restrictions in an agency agreement may still fall foul of Article 101 TFEU). See further, Introduction to...

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Analysing vertical agreements under EU competition law [Archived]

ARCHIVED: This Practice Note has been archived and is not maintained. On 10 May 2022, the Commission adopted a new Vertical Block Exemption Regulation 2022/720 (VBER 2022). The VBER 2022 replaced the previous Vertical Restraints Block Regulation 330/2010 (VBER 2010, also referred to as the VRBE in this Practice Note) on 1 June 2022. This Practice Note was drafted for the VBER 2010.NOTE—The VBER 2010 expired on 31 May 2022 and was replaced by the VBER 2022 with effect from 1 June 2022. Under Article 10 VBER 2022, there was a 12 month transition period (ending on 31 May 2023) to accommodate pre-existing vertical agreements already in force on 31 May 2022 which satisfied the conditions for exemption provided in the VBER 2010 on 31 May 2022 but which did not satisfy the conditions for exemption provided in the VBER 2022. This Practice Note is therefore for background information only.For an assessment of the VBER 2022, see further, Introduction to the application of Article 101 TFEU to vertical agreements and...

The Vertical Restraints Block Exemption 2010 [Archived]

ARCHIVED: This Practice Note has been archived and is not maintained. On 10 May 2022, the Commission adopted a new Vertical Block Exemption Regulation 2022/720 (VBER 2022). The VBER 2022 replaced the previous Vertical Restraints Block Regulation 330/2010 (VBER 2010, also referred to as the VRBE in this Practice Note) on 1 June 2022. This Practice Note was drafted for the VBER 2010.NOTE—The VBER 2010 expired on 31 May 2022 and was replaced by the VBER 2022 with effect from 1 June 2022. Under Article 10 VBER 2022, there was a 12 month transition period (ending on 31 May 2023) to accommodate pre-existing vertical agreements already in force on 31 May 2022 which satisfied the conditions for exemption provided in the VBER 2010 on 31 May 2022 but which did not satisfy the conditions for exemption provided in the VBER 2022. This Practice Note is therefore for background information only.For an assessment of the VBER 2022, see further, Introduction to the application of Article 101 TFEU to vertical agreements and...

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Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory under UK and EU competition law?

Can a non-exclusive distributor appointed to a territory be prevented from selling outside that territory under UK and EU competition law? Agreements between entities operating at different levels in the supply chain are often called ‘vertical agreements’. Distribution agreements are a type of vertical agreement. For more information, see: Distribution—overview and Lexology Panoramic: Distribution And Agency. There are several different types of distribution arrangement that can be utilised in a supply chain, including exclusive, non-exclusive (or ‘free’) and selective distribution. In the UK and EU, distribution agreements may benefit from an exemption from competition law restraints, provided they do not contain any prohibited or hardcore restrictions. Distribution and UK Competition Law Chapter I of the Competition Act 1998 and the vertical restraints block exemption order Chapter I of the Competition Act 1998 (CA 1998) prohibits agreements which prevent, restrict or distort competition within the UK. For further information, see Practice Notes: Chapter I prohibition and Introduction to the application of Chapter I to vertical agreements. Anti-competitive...

Can a supplier prevent or restrict an exclusive or non-exclusive distributor from making any sales of products via website or any other internet based platform?

Can a supplier prevent or restrict an exclusive or non-exclusive distributor from making any sales of products via website or any other internet based platform? This Q&A assumes that the query refers to a UK based manufacturer and distributor appointed in respect of UK territories. Any agreement which affects trade or restricts competition in the UK may be subject to the prohibition on anti-competitive agreements under the provisions of Chapter I of the Competition Act 1998 (CA 1998). However, an agreement will not be prohibited if it: • can be explicitly justified on efficiency grounds (under CA 1998, s 9), or • benefits from a relevant block exemption With effect from 1 June 2022, the relevant block exemption providing a ‘safe harbour’ in the UK is the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (UK VABEO), SI 2022/516. The UK VABEO is supplemented by CMA guidance. The existence of any of the hardcore restrictions set out in UK VABEO, SI 2022/516, art 8 will remove the benefit of the...

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Court implies 'horizontal' arbitration agreement and grants stay of proceedings (Alrubie v Chelsea Football Club Ltd and another)

Arbitration analysis: This case involved a successful application by the second defendant to stay proceedings in the London Circuit Commercial Court. In the court claim, the claimant alleged that the second defendant had induced the first defendant to breach a contract between the claimant and the first defendant. The claimant argued that the contract entitled him to receive a commission in relation to the transfer of a player from the first defendant, Chelsea Football Club Ltd (Chelsea), to West Ham United Football Club (West Ham). In granting the application for a stay, the court was required to consider whether there was a valid arbitration agreement between the claimant and the second defendant, who were both 'Participants' under the Rules issued and promulgated by Football Association Ltd (the FA Rules). The FA Rules contained an arbitration agreement which clearly applied to disputes between Participants and the Football Association, however there was no express agreement between the claimant and the second defendant. Nonetheless, the judge found that there was an implied 'horizontal'...

EU Competition law—daily round-up (05/12/2024)

A round-up of EU competition law developments, including the Court of Justice’s judgment in a national reference from Latvia concerning Article 101 TFEU restrictions in car warranties.