- Vertical agreement
A vertical agreement is a term used in
competition law to denote agreements between firms up or down the supply chain from one another. For instance, between a manufacturer of electronic gadgets likeSony might have a vertical agreement with and a retailer likeBing Lee to do special Sony promotions in return for cheaper prices.Franchising is a form of vertical agreement, and underEC competition law this falls under the scope of Article 81. ["Consten v. Grudig]Car dealership
One prominent category of vertical agreement is car dealership. In the EU this field is ruled by Commission Regulation (EC) NO 1400/2002 of 31 July 20021, on the application of article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the
motor vehicle sector.In the Member States of the European Union, motor vehicle and
spare part manufacturers distribute their products through networks of distributors. As far as motor vehicles are concerned, these distributors are commonly known as dealers. Motor vehicle manufacturers and other s also operate networks of authorisedrepairer s. Such a distribution or repair network consists of a bundle of similar agreements between the manufacturer and the individual distributors or repairers. For the purposes of EU competition law, these agreements are referred to asvertical agreement s, as the manufacturer and distributor or repairer each operate at different levels of the production or distribution chain.Whether a vertical agreement actually restricts competition and whether in that case the benefits the anti-
competitive effects will often depend on the market structure.The new Regulation 1400/2002, which entered into force on 1 October 2002, introduces a number of substantial changes as regards the exemption of distribution agreements for new motor vehicles and spare parts. It also introduces major changes as regards the exemption of agreements for the provision of repair and maintenance services by authorised and independent repairers and other independent operators, such as
onroad assistance operator s, distributors of spare parts and providers of training for repairers.ee also
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Horizontal agreement
*Collusion
*Cartel References
External links
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