Vertical agreements are unlawful under Article 101, paragraph 2 of the TFUE, where the agreement has a restrictive “object” or “restrictive effect” within the meaning of Article 101, paragraph 1, of the TFUE. However, if the parties can demonstrate that it is covered by a potentially applicable category exemption or that it may be expressly justified for reasons of effectiveness within the meaning of Section 101, paragraph 3, of the TFUE, it may be exempt from the tax. There are cases where certain types of agreements do not automatically fall within the scope of Article 101 of the TFUE, for example. B: Even where a category exemption does not apply, a vertical agreement may continue to benefit from an individual exemption. The parties are authorized to conduct a self-assessment to determine whether the restrictive vertical competition agreement meets the requirements for the individual exemption. Like the EU competition regime, the conditions for individual exemption are: (i) the agreement must contribute to improving the production or distribution of products or to promoting technical or economic progress; (ii) it must give consumers an appropriate share of the resulting benefit; (iii) it should not impose restrictions on the companies concerned that are not necessary to achieve these objectives; and (iv) it should not allow the parties to eliminate competition on a substantial portion of the products concerned. This is not an alternative test and all individual exemption requirements must be met. In addition, vertical agreements appear to be more effective in commercial activity. The most common vertical restrictions are: Vertical pricing is an agreement linked to vertical agreements. The courts have held that vertical pricing is subject to cartel and abuse legislation and should be assessed on the basis of the explanatory statement.
“Vertical agreement.” Merriam-Webster.com Legal Dictionary, Merriam-Webster, www.merriam-webster.com/legal/vertical%20agreement. Access 27 Nov 2020. Contracting parties may include restrictions or contractual obligations in vertical agreements to protect an investment or simply to ensure day-to-day activity (for example. B, sales, supply or purchase agreements). Article 101, paragraph 1 of the TFUE prohibits agreements between companies with the purpose or effect of restricting, preventing or distorting competition within the Union and affecting trade between EU Member States. This prohibition is relevant to all agreements between two or more companies, whether they are competitors.