Vertical agreement
From Wikipedia, the free encyclopedia
 |
| Competition law |
|---|
| Basic concepts |
| Anti-competitive practices |
| Laws and doctrines |
Europe Australia |
| Enforcement authorities and organizations |
| edit box |
A vertical agreement is a term used in competition law to denote agreements between firms up or down the supply chain from one another. For instance, between a manufacturer of electronic gadgets like Sony might have a vertical agreement with and a retailer like Bing Lee to do special Sony promotions in return for cheaper prices. Franchising is a form of vertical agreement, and under EC competition law this falls under the scope of Article 81.[1]
Contents |
[edit] Car dealership
One prominent category of vertical agreement is car dealership. In the EU this field is ruled by Commission Regulation (EC) NO 1400/2002 of 31 July 20021, on the application of article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector.
In the Member States of the European Union, motor vehicle and spare part manufacturers distribute their products through networks of distributors. As far as motor vehicles are concerned, these distributors are commonly known as dealers. Motor vehicle manufacturers and other undertakings also operate networks of authorised repairers. Such a distribution or repair network consists of a bundle of similar agreements between the manufacturer and the individual distributors or repairers. For the purposes of EU competition law, these agreements are referred to as vertical agreements, as the manufacturer and distributor or repairer each operate at different levels of the production or distribution chain.
Whether a vertical agreement actually restricts competition and whether in that case the benefits outweigh the anti-competitive effects will often depend on the market structure.
The new Regulation 1400/2002, which entered into force on 1 October 2002, introduces a number of substantial changes as regards the exemption of distribution agreements for new motor vehicles and spare parts. It also introduces major changes as regards the exemption of agreements for the provision of repair and maintenance services by authorised and independent repairers and other independent operators, such as onroad assistance operators, distributors of spare parts and providers of training for repairers.
[edit] See also
[edit] References
- ^ Consten v. Grudig
