Online sales and the Vertical Block Exemption Regulation (VBER)-EU Regulation 2022/720-

By Margherita Barletta

As of June 1, 2022, the new EU Regulation 2022/720 (hereinafter "VBER") became effective. This regulation was adapted to the altered business model, which is now closely linked to e-commerce and online sales. The updating process could not disregard a preliminary analysis of the former 2010 Regulation (EU) 330/2010 - VBER 2010-.

The Regulation covers vertical agreements, i.e., agreements between two or more undertakings operating at different levels of the production or distribution chain, which concern the conditions under which the parties may purchase, sell or resell certain goods or services.

Article 101(1) TFEU prohibits agreements between undertakings that restrict competition. Under Article 101(3) TFEU, such agreements may be considered compatible with the single market provided that they contribute to improving the production or distribution of goods or to promoting technical or economic progress by reserving for users a fair share of the resulting benefit without eliminating competition.

The VBER provides an exemption from the prohibition in Article 101(1) TFEU for vertical agreements that meet certain conditions, thereby creating a safe harbor for such agreements. A safety zone that is too wide would not comply with Article 101 TFEU. On the other hand, too small a safety zone would increase compliance costs for companies.

In a press release last May, the Commission specified that the new rules:

- narrow the scope of the safe harbor with regard to (i) dual distribution, which is a situation in which a supplier sells its goods or services through independent distributors but also directly to end customers, and (ii) parity obligations, which are obligations that require the seller to offer the counterparty the same-or better-conditions than those offered on third-party sales channels, such as on other platforms, and/or on the seller's direct sales channels, such as on its website. This means that certain aspects of dual distribution and certain types of parity obligations will no longer be exempted under the new VBER, but will have to be assessed individually, in light of Article 101 TFEU;

- broaden the scope of the safe harbor with respect to (i) certain restrictions on the buyer's ability to actively solicit individual customers, i.e., active sales, and (ii) certain practices regarding online sales, in particular the ability to charge the same distributor different wholesale prices for products intended for online and offline sales and the ability to impose different conditions for online and offline sales in selective distribution systems. Such restrictions are now exempted under the new VBER, provided all other conditions relating to exemption are met.

The changes are numerous and affect, for example, exclusive distribution, selective distribution, pricing, and non-compete obligations.

For what is important, it seems useful to focus on the changes concerning online sales:

If the previous system provided for the so-called equivalence criterion (prohibition for the supplier to impose different criteria for online and offline sales), with Regulation 2022/720, it is no longer necessary that the criteria imposed on distributors are, on the whole, equivalent to the criteria imposed on the physical point of sale. The only condition is that the non-equivalence is not intended to hinder online sales.

Another change in this area is dual pricing.

The 2010 VBER considered dual pricing prohibited. The reversal of that state of affairs is now a fact: with respect to the same distributor, it is possible to set different prices depending on whether online and physical sales are involved, if that difference is the result of the different costs of operating the physical store versus the online store.

To understand all the new features related to the VBER please refer to the Commission's Guidelines.

For more information please contact Paula Vega at the following e-mail address:

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