Whose Regulation, Which Competition?
- ASCOLA Competition Law series
Edited by Hanns Ullrich
Chapter 5: Vertical Agreements: 4 Years of Liberalisation by Regulation n. 2790/99 After 40 Years of Legal (Block) Regulation
Denis Waelbroeck* I INTRODUCTION On 1 June 2000 the new regulation on vertical restraints (‘Regulation 2790/99’)1 entered into force and replaced the three former block exemption regulations applicable respectively to exclusive distribution, exclusive purchasing and franchise agreements. This new regulation initiated the first step in the Community’s review and modernisation of its rules on competition. The aim was to simplify the rules and reduce the regulatory burden for companies, whilst ensuring a more effective control of vertical restraints implemented by companies holding significant market power. The Commission claimed that the new rules embodied a shift from the more formalistic regulatory approach underlying the old legislation towards an increased emphasis on economics in the assessment of vertical agreements under the EC competition rules. This new policy was designed to increase the companies’ right to devise their contracts entirely to their own choosing as long as they have no market power, thereby removing the strait-jacket previously imposed on them by the former block exemption regulations. Regulation 2790/99 therefore provides a safe harbour whenever the supplier has a market share below 30 per cent, under which he is free to agree any restriction he wishes, as long as his agreements do not contain so-called * Partner, Ashtrust Brussels, Professor of EC Competition law at the Université Libre de Bruxelles and the College of Europe, Bruges. The author is grateful to David Mamane and Vanig Kasparian for their assistance in drafting the present report. 1 Commission Regulation (EC) No 2790/1999 of 22 December 1999...
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