Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Friday, July 23, 2010

The New EC Block Exemption for Vertical Restraints: A Step Forward and a Missed Opportunity

Posted by D. Daniel Sokol

Paul Lugard (TILEC) & Theon van Dijk (Lexonomics) have mixed comments on EU policy in their piece The New EC Block Exemption for Vertical Restraints: A Step Forward and a Missed Opportunity.

ABSTRACT: Today, more than 10 years after the adoption of Regulation 2790/1999, much has changed. First, while the adoption of Regulation 279/1999 marked a more favorable reception of economic insights in EU competition law, those insights have, to some extent, subsequently been laid down in the Article 81(3) Notice of 2004 and have nowadays become commonplace. This is despite a somewhat ill-defined preference for empirical research (as opposed to theoretical insights), in particular in the area of resale price maintenance, and the continuing treatment of a number of specific vertical restraints as hardcore restrictions that do not necessarily decrease consumer welfare.

Second, following the adoption of Regulation 1/2003, the enforcement of competition law in the area of vertical restraints has become predominantly a matter for national competition agencies. In fact, since the entry into force of Regulation 2790/1999, there have only been a few Commission decisions specifically dealing with vertical restraints. But with the decentralizing of the overview of these types of restraints to national competition agencies, the risk of diverging analytical approaches and prioritization approaches increases. For instance, during the discussions on what would become Regulation 330/2010, four member states questioned whether resale price maintenance should continue to be treated as a hardcore violation.

Three additional developments seem to have had a clear impact on the new regime for vertical restraints.

http://lawprofessors.typepad.com/antitrustprof_blog/2010/07/the-new-ec-block-exemption-for-vertical-restraints-a-step-forward-and-a-missed-opportunity.html

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