The current block exemption Regulation, which exempts certain types of vertical agreements from the Article 81 EC Treaty prohibition on anti-competitive agreements (Regulation 2790/99), is due to expire in 2010. The European Commission (Commission) is currently consulting on a revised Vertical Agreements Block Exemption and accompanying Guidelines. The draft amendments are anticipated to update and modernise the block exemption in light of the growth of internet sales, and developments in economic theory. The most significant of the proposed changes is that the "safe harbour" threshold of 30% would apply to the market share of both the supplier and the buyer in all cases. The change is intended to deal with concerns over the buying power of some significant distributors and retailers (e.g. large supermarket chains). The proposed revisions to the Guidelines on Vertical Agreements include further guidance on: the distinction between "active" and "passive" sales, particularly in relation to the use of distributor websites; and occasions when Resale Price Maintenance may be eligible for an individual exemption.

To read the Commission's draft Regulation and Guidelines click here.