HOTREC comments on draft revised Vertical Block Exemption Regulation and Vertical Guidelines

On 9 July 2021, the European Commission launched a  public consultation  inviting all interested parties to comment on the draft revised Vertical Block Exemption Regulation ("VBER") and Vertical Guidelines. The VBER draft put forward by the European Commission still enables OTAs to apply narrow price parity clauses on hotels, but clarifies that the application of wide price parity clauses is not authorised anymore.

The draft revised VBER and Vertical Guidelines follow a thorough review process launched in October 2018. This aims at adapting the current rules in specific areas where the evaluation pointed to a lack of clarity or the existence of gaps, or where the current rules are no longer suited to the market realities. This opportunity to comment the Commission's draft represents the final milestone for stakeholders to provide written input before publication of a definitive legislative proposal.

HOTREC comments

The European Commission will welcome comments on the draft revised VBER from interested parties received by 17 September 2021. HOTREC aims to provide comments, in particular to address the fact that narrow price parity clauses would remain authorised. Furthermore, HOTREC's response covers the issue of brewery contracts which are problematic in Belgium and in the Netherlands, upon request by HorecaVlaanderen and KHN.

HOTREC's draft response is available here for comment by Members:

HOTREC Members are invited to provide their feedback on HOTREC's draft response by Wednesday 8 September 2021. Please send your feedback by email to [email protected]. Comments provided as track changes to the draft HOTREC response document would be particularly appreciated.

Please note that contrarily to previous public consultations, to which HOTREC replied and 2021 (view response), this latest round of consultation is open and not structured by a questionnaire. From a content perspective, bearing in mind that HOTREC has already provided very detailed and substantial arguments in the context of the March 2021 public consultation, HOTREC's draft response focuses on the the importance of the Bundeskartellamt decision of May 2021, which banned narrow price parity clauses in Germany based on an assessment of German and EU law, and which was adopted after the closure of the March 2021 public consultation.

The proposed changes

As set out in more detail in the background note accompanying the draft revised VBER and Vertical Guidelines, the proposed changes aim to:  

• Readjust the safe harbour provided by the VBER to its intended scope, as regards the four areas of dual distribution, parity obligations, active sales restrictions, and certain indirect measures restricting online sales.
• Provide stakeholders with up-to-date guidance for a business environment reshaped by the growth of e-commerce and online platforms and ensuring a more harmonised application of the vertical rules across the EU. In particular, the application of the VBER and the Vertical guidelines to online sales and advertising restrictions, will be clarified further and specific rules and guidance relating to the platform economy will be included; and
• Reduce compliance costs for businesses, notably small and medium-sized enterprises, by simplifying and clarifying certain provisions perceived as particularly complex and difficult to implement.

Next steps

Interested parties are invited to submit their comments on the draft rules by 17 September 2021.

More information including on how to submit a contribution is available  here .

On the basis of the overall body of evidence gathered during the impact assessment phase, including stakeholder comments on the draft revised VBER and Vertical Guidelines, the Commission will finalise the impact assessment and revise the drafts published today with a view to having new rules in place when the current VBER will expire.

Background on the review process

In September 2020, the Commission published a  Staff Working Document  setting out the results of the evaluation of the current VBER and the Vertical Guidelines. The evaluation showed that they are both useful tools that significantly facilitate the self-assessment of vertical agreements and help reduce compliance costs for businesses entering into such agreements. However, it also provided indications that the current rules need to be adapted to market developments that have occurred since their adoption in 2010.

Following this evaluation, in October 2020 the Commission launched the impact assessment, during which it gathered further evidence on the areas for improvement, including through an  open public consultation, discussions with interested parties and national competition authorities, as well as through targeted expert reports.

In June 2021, the Commission published the results of the open public consultation, including a  summary of the contributions  received. At the same time, a  summary of the contributions of the National Competition Authorities  to the impact assessment of the Vertical Block Exemption Regulation, as well as the  expert report on active sales restrictions  and the  expert report on online sales and online advertising restrictions

Background on the VBER

Vertical agreements are agreements entered into between two or more undertakings operating at different levels of the production or distribution chain, and relating to 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. However, under Article 101(3) TFEU, such agreements can be declared compatible with the Single Market, provided they contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits without eliminating competition.

The VBER (Commission Regulation (EU) No 330/2010) exempts vertical agreements that meet certain conditions from the prohibition in Article 101(1) TFEU, thus creating a safe harbour for those agreements. Together with the VBER, the Commission also adopted the  Guidelines on Vertical Restraints . These provide guidance on how to interpret and apply the VBER and how to assess vertical agreements falling outside the safe harbour of the VBER.

For More Information

See the  dedicated webpage of DG Competition, which contains all stakeholder contributions submitted in the context of the evaluation and the impact assessment, summaries of the different consultation activities, the Staff Working Document on the evaluation and the expert reports prepared for the impact assessment.