New UK Framework for Vertical Agreements Finalised

On July 12, the CMA published its final guidance (the Guidance) accompanying the UK’s block exemption for vertical agreements.

The VABEO came into force on June 1, replacing the retained EU framework. The Guidance supplements the VABEO for agreements not covered by the block exemption.  The VABEO and the Guidance largely maintain the status quo, with a few important divergences from the previous EU rules.

The Guidance aims to help businesses self-assess whether their vertical agreements comply with competition law.  If a vertical agreement meets the conditions of the VABEO, it benefits from an automatic exemption from competition law scrutiny.  Vertical agreements that do not meet the conditions for the block exemption must instead be individually assessed.

The publication of the VABEO and the Guidance follows a year-long consultation.  The CMA published draft versions and invited comments earlier this year.  The Government explained in its response to the consultation that changes made to the draft version of the VABEO were only minor points of technical drafting.  But there are in fact a few interesting amendments in the CMA’s final Guidance, including new areas of divergence from EU rules on vertical agreements.

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