The new Vertical Block Exemption Regulation (VBER) provides companies with up-to-date guidance on how to assess their vertical agreements under the EU competition rules. The Dutch Authority for Consumers and Markets (ACM) has similarly adapted its Guidelines on arrangements between suppliers and buyers. The new VBER is stricter on dual distribution and cross-platform retail parity obligations than the old one, but is more lenient towards active sales and online sales restrictions (see our June 2022 newsletter).
Even so, the new VBER has left some loose ends that should be tied up by the courts soon. A question whether price parity clauses can be regarded as ancillary restraints and consequently be exempted from application of the EU competition rules is currently pending at the European Court of Justice. Similarly, the ACM’s first-ever vertical price coordination fine (see our October 2021 newsletter) is now put to the test in a Dutch court. The upcoming ruling will likely set clearer boundaries between anti-competitive resale price maintenance and legitimate recommended resale prices for companies to go by.
Companies should beware that the authorities’ vertical restraints crusade seems far from over. The ACM’s warning letters to suppliers to stop meddling with their retailers’ prices could be the prelude to further investigations into vertical mishaps. The ongoing investigation into food producer Mondelĕz and the recently launched investigation into fashion house Pierre Cardin and its licensee Ahlers underline the Commission’s determination to tackle cross-border sales restrictions (see also our earlier February 2021 newsletter).
‘Social’ aspects – Sustainability
Another fashion-related investigation may be forthcoming. The Commission raided several companies active in the fashion sector, suspecting that their efforts to go ‘green’ may have led to anti-competitive information exchange and price coordination. Just one example of how sustainability efforts seem to be trickling through in more ‘traditional’ cartel busting efforts (other examples include the metal packaging cartel settlement and, possibly, the inspections in the automotive sector).
Companies evidently need to walk a thin line between legitimate cooperation and anti-competitive collusion (as explained in our August 2021 newsletter). Buying cartels remain a particularly hot topic in this context. The Commission imposed a fine of EUR 157 million for alleged collusion on purchase price negations and information exchange in the styrene monomer merchant market and sent a Statement of Objections to Alcogroup and Agroetanol about alleged collusion to influence the wholesale price formation mechanism for ethanol. The ACM’s investigation into a potential purchasing cartel in the agricultural sector is still ongoing.
More clarity on the antitrust leeway between cooperation and collusion is also relevant for companies embarking on ‘green’ collaborations. The Commission’s eagerly awaited Horizontal Guidelines are likely to relieve the current tension between the Commission’s and the ACM’s preferred approach to the ‘fair share’ assessment to green-light these collaborations (see our March 2022 newsletter). For now, companies will have to make do with the ACM’s guidance and ‘informal blessings’ or a guidance letter from the Commission for comfort (see our October 2022 newsletter).
‘Social’ aspects – Labour
Solo self-employed persons have already had their antitrust safe harbour clarified. Both the Commission and the ACM published guidance to distinguish between (illegal) wage-fixing and (legal) collective bargaining by solo self-employed people. Within these guidelines’ boundaries, solo self-employed persons, including digital labour platform workers, can collectively take a stand against their counterparties to achieve better working conditions (see our November 2022 newsletter).
Employers should realise that sound (employed and self-employed) working conditions are top of mind. The Commission and the ACM are on the look-out for wage-fixing arrangements and no-poach agreements. Information exchange on, for instance, wages or non-competes is also on the radar (see our March 2022 newsletter).
The Commission tooled up its kit with the Digital Markets Act (DMA) to level the playing field in the digital sector (see our November 2022 newsletter). The DMA’s ex ante system runs parallel to investigations under the EU and national competition rules (see our April 2022 newsletter). Amazon planned ahead and matched the DMA’s obligations in its commitments to resolve the Amazon Marketplace and Amazon Buy Box investigations. Still, the Commission has its hands full with ongoing digital investigations into, for instance, Google, Meta and Apple (while taking the EU courts’ rulings in Intel, Qualcomm and Google Android in its stride).
However, this may change soon. The DMA’s upfront rules and obligations may reduce the current ‘overload’ on digital antitrust enforcers over time. The revision of Regulation 1/2003 may further result in speedier solutions to these “traditional” investigations. In addition, the revised market definition notice will provide more clarity on how to define product and geographic markets in digital sectors.
Catching ‘killer acquisitions’
The Commission certainly needs this ‘freed up’ time, given its keenness to catch ‘killer acquisitions’ flying under the radar of EU and national merger notification thresholds by stimulating member states to refer those cases for review to Brussels (see our August 2022 newsletter). On top of gun jumping risks and outright merger prohibitions resulting from this upward referral policy, companies should be aware of the possibility that the prohibition on abuse of dominance may be applied as a potential ‘back-up plan’ where mergers are not subject to ex ante review (see our October 2022 newsletter).
The Commission’s plan to simplify its EU merger control procedures will be of no comfort to companies in this respect.
‘Level playing field’ and ‘fairness’ are the buzzwords to sum up the 2022 competition developments. Apart from a brand new tool (the DMA) to level the digital sector playing field, the concept of ‘fairness’ has been re-introduced into competition policy through the sustainability and labour developments (see our November 2022 newsletter). Gun jumping cases may flare up: even without any ‘freed up’ time, gun jumping is likely to remain a focal point for the Commission and the ACM in 2023 (see our June 2022 newsletter).
Key dates & periods
Adoption of merger simplification package.
Adoption of market definition notice.
02 May 2023
Full application of the DMA.
31 May 2023
Companies have until 31 May 2023 to amend their existing distribution agreements to the new VBER.
30 June 2023
Expiry of the validity of the Horizontal Block Exemption Regulations and Horizontal Guidelines.
03 July 2023
DMA Notification deadline.
06 September 2023
Commission’s decision on DMA gatekeeper designation (within 45 workings days after notification).
06 March 2024
DMA’s obligations apply (within six months after gatekeeper designation).
This article was published in the Competition Newsletter of January 2023. Other articles in this newsletter: