Did you know that your business could well have a "vertical agreement"? Indeed, your business could be entirely dependent on so-called "vertical agreements".

A vertical agreement is one between businesses at different levels of the economic chain.

Examples would include distribution, purchasing, franchise or other sales/purchasing arrangements.

It is vertical because one party is at one point in the economic chain (e.g., a manufacturer) and the other party is further down the chain (e.g., a distributor).

The new rules matter.

For example, if you are a distributor but your distribution agreements breach competition law then they are void and unenforceable – legally worthless. You couldn't easily sell your business because the distribution contracts are not legally robust.

Equally, the new rules apply to many online sales arrangements.

There have been EU competition rules in this area for almost half a century. Businesses which breach the rules have found themselves fined heavily and now executives can be personally exposed under some national laws (e.g., Ireland).

On 10 May 2022, the European Commission adopted a new set of rules embodied in Regulation 2022/720. The European Commission has published guidance on this new regime.

On 11 May 2022, those rules were published in the EU's Official Journal (OJ 2022 L134/4).

Business executives need to know these rules because they enter into force on 1 June 2022 and set out the roadmap until 31 May 2034.

The block exemption regulation is informally known as the new VBER - the new vertical block exemption regulation.

There is a one year transition to 31 May 2023 for existing deals which, on 31 May 2022, meet the criteria of the old/existing measure, Reg.330/2010. Otherwise a new world, new rules for verticals!