Insights Competition and Markets Authority consults on draft guidance to accompany Vertical Agreements Block Exemption Order

The draft guidance follows the CMA’s final recommendation to the Secretary of State at the Department for Business, Energy and Industrial Strategy (BEIS) regarding the retained Vertical Agreements Block Exemption Regulation (VABER).

The CMA explains that under the Chapter I prohibition in the Competition Act 1998, agreements between businesses that restrict competition in the UK are prohibited, unless they meet the conditions for exemption in s 9(1) of the 1998 Act or are otherwise excluded. An agreement is exempt from the Chapter I prohibition if it creates sufficient efficiencies and benefits to outweigh any anti-competitive effects. A Block Exemption Order automatically exempts agreements of a certain category from the Chapter I prohibition if the agreement satisfies the conditions set out in the Order.

The purpose of the guidance is to explain how the CMA applies the Chapter I prohibition to vertical agreements, i.e., agreements between businesses operating at different levels of the supply chain. It describes the application of the proposed Vertical Agreements Block Exemption Order to vertical agreements and is intended to help businesses assess vertical agreements to establish whether they fall within its scope.

The CMA says that responses to the consultation may be shared with BEIS in order to facilitate the preparation of the final version of the Vertical Agreements Block Exemption Order.

The CMA is seeking responses by 5.00 pm on 5 May 2022. To access the draft guidance and for details on how to respond to the consultation, click here.