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09 Aug

VBER DEEP DIVE - Hybrid platforms

After a short summer break, we are happy to be back with a new VBER Deep Dive, this week focussing on hybrid platforms.

Hybrid platforms are a new concept in the VBER. They are related to 'online intermediation services', another new concept in the VBER.
Online intermediation services are services that allow companies to offer goods or services to other companies or final consumers and that in so doing facilitate the initiation of direct B2B or B2C transactions. Examples are online marketplaces, app stores, price comparison tools and social media services used by companies (e.g., LinkedIn or Instagram).

A provider of online intermediation services can be a competitor on the relevant market for the sale of the intermediated goods or services. This is when the provider has a hybrid function, and its platform is a hybrid platform. Amazon is the most well-known example: Amazon is a provider of online intermediation services, allowing third parties to use its online marketplace to offer their products for sale (first vertical relation); Amazon itself may also distribute the products of those parties via its marketplace (second vertical relation).

What are the most important rules on hybrid platforms under the VBER?

- Starting point: A provider of online intermediation services is a supplier under the VBER. 

- Safe harbour? No. The dual distribution exception does not apply to hybrid platforms. In dual distribution, the supplier competes at the downstream level with its buyers. Dual distribution is covered by the VBER although it is an agreement between competitors. The safe harbour of the VBER however does not extend to hybrid platforms. 

- Why? Providers with a hybrid function may want to favour their own sales and may have the ability to influence the outcome of competition between companies that use their online intermediation services.

- Consequence? Vertical agreements relating to the provision of online intermediation services require an individual exemption if they are concluded by a provider with a hybrid function. 

- Enforcement priority? Not necessarily, in the Vertical Guidelines, the Commission says that it will not prioritize enforcement against hybrid platforms if the supplier only allows its buyers to use its web shop but not to offer competing brands of products and the supplier is not otherwise active on the relevant market for the provision of online intermediation services. This is useful to know for suppliers with a web shop for their own products that offer their buyers, which do not necessarily have their own web shop, to use the web shop of the supplier to sell online. 

DLC Seminar
19 Jul

VBER DEEP DIVE - Resale price maintenance

Is it still prohibited for a supplier to impose fixed and minimum resale prices on its distributors?

The resale price maintenance regime remains largely unchanged. Under the new VBER, a supplier is still allowed to communicate recommended resale prices and impose maximum resale prices. Imposing fixed and minimum resale prices remains a hardcore restriction, and thus one of the most serious breaches of competition law. Although the general principles are not modified, the following additions and clarifications in the new VBER regime are worth noting:

- A provider of online intermediation services qualifies as a supplier, and may therefore not impose fixed or minimum sales prices for the transactions it intermediates.

- The new Vertical Guidelines provide an additional example of RPM that may lead to efficiencies and may therefore be allowed: a supplier may impose a minimum resale price or minimum advertised price (MAP) to prevent a particular distributor from regularly using a product as a loss leader, so as to avoid that the distributor’s behaviour would damage the brand image of the supplier.

- For the execution of a fulfilment contract, the supplier is allowed to impose a resale price on the company fulfilling the contract, if that company is selected by the supplier and not by the customer. Where the customer selects the company providing the fulfilment services, the imposition of a resale price by the supplier may restrict the competition for the provision of the fulfilment services and may amount to RPM.

DLC Seminar
12 Jul

VBER DEEP DIVE - Online advertising

Can a supplier restrict the online advertising activities of its buyers?

The prohibition to restrict online sales has been upgraded to the list of hardcore restrictions. As a result, a supplier should be very careful when restricting its buyers in promoting the contract products online. By imposing such restrictions, the supplier may indirectly prevent the effective use of the internet by the buyer or its customers to sell the contract goods or services!

- Restrictions that have the object of preventing the use of an entire online advertising channel, such as search engines or price comparison sites, amount to a hardcore restriction of online sales, and are therefore prohibited.

- Prohibiting the use of particular price comparison services or search engines is generally not a hardcore restriction, as the buyer may in such a case still use other online advertising services to promote its online sales activities. However, prohibiting the use of the most widely used advertising service may amount to a hardcore restriction if the remaining services are not capable of attracting customers to the buyer’s own webshop.

- The use of online advertising channels targeting customers in a territory or customer group that is allocated exclusively to other buyers or is reserved exclusively to the supplier can be restricted, as such a restriction can benefit from the VBER pursuant to the exception of active sales restrictions in the context of exclusive distribution.

DLC Seminar
05 Jul

VBER DEEP DIVE - Online sales

Must a supplier permit online sales by its buyers?

The prohibition to restrict online sales remains under the new VBER regime and has even been upgraded to the list of hardcore restrictions:

- A supplier may not prevent the effective use of the internet by the buyer or its customers to sell the contract goods or services, otherwise he would be imposing an illegal customer or territorial restriction.
- A restriction or ban of sales on online marketplaces only restricts the use of a specific online sales channel. If other online sales channels remain available to the buyer, such restriction or ban does not prevent the effective use of the internet and is therefore not an illegal customer or territorial restriction.
- Exclusive distributors must be protected against active sales by all other buyers of the supplier in the EU. That protection includes protection against active online sales, which are now defined in the VBER itself.

DLC Seminar
04 Jul

Use of languages in corporate matters

Time for change! Bart Bellen, Ine Schockaert and Marthe Wouters published a new Dutch-French article regarding the use of languages in corporate matters in Tax Audit & Accountancy (TAA). Given the particular relevance to the audit profession, they revisited the topic with an additional focus on specific aspects that are pertinent to auditors.

Want to find out more? Have a look at the article here (page 45).

30 Jun

ITP - Better protection in consumer sales

Read our latest In The Picture, written by counsel Milena Varga and associate Berto Pals, and find out more about the better protection in consumer sales provided by Directive 2019/771!

29 Jun

New NDA generator

The BVA | Belgian Venture Capital & Private Equity Association has just launched a new "NDA Generator". Several fully automated non-disclosure agreement ("NDA") templates were developed under the guidance of the BVA's Tax & Legal Committee. Via contract automation software, the tool will allow much quicker and smoother drafting of non-disclosure agreements. Discover it here!

27 Jun

VBER DEEP DIVE - Market share limits

Do the same market share limits apply under the new VBER? And what happens if you exceed those limits?

The double market share limit of 30% is withheld in the new VBER. This means that in order for a distribution agreement to benefit from the safe haven of the VBER, two cumulative market share thresholds still have to be met:

✨ The market share of the supplier may not exceed 30% on the relevant sales market.
✨ The market share of the buyer may not exceed 30% on the relevant purchasing market.

In other words, when the market share of at least one of the parties is above the limit of 30%, the distribution agreement will not benefit from the VBER. This does however not mean that the distribution agreement is forbidden, but parties will have to self-assess whether any restriction included in the distribution agreement can benefit from an individual exemption.

The good news is that the European Commission did simplify the rules in case a market share is initially below 30%, but subsequently rises above that level. In that case, the new VBER continues to apply for a period of two consecutive calendar years following the year in which the 30% limit was first exceeded.

Interested in really deep-diving into the new VBER?

✨Join one of our interactive workshops 
✨Read the Distribution Law Center’s wrap-up countdown 

Seminar DLC
17 Jun

VPG webinar

Join us at the VPG webinar next Tuesday. Filip Tuytschaever, partner at contrast and professor of European competition law at the VUB, and Lise Ryckaert, lawyer at contrast and DLC-coordinator, will guide you through the new regime on vertical agreements by means of a top 10. Register here and receive 2 OVB credits.

01 Jun

VBER and VGL enter into force

Today the new Vertical Block Exemption Regulation (VBER) and Vertical Guidelines (VGL) enter into force. These new rules will have an impact on the daily business of millions of European companies. Discover the new VBER regime in the DLC wrap up or join one of our VBER workshops (in English, French and Dutch).

DLC Event Seminar