Prohibited Vertical Agreements

The Commission`s vertical class exemption provides a safe haven for certain agreements with vertical restrictions. Safe port means that, where an agreement fulfils the conditions of the vertical category exemption, neither the Commission, nor the competition authorities, nor the jurisdictions of the Member States can find that the agreement is contrary to Article 101, unless a prior decision is taken (with a forward-looking effect) to « remove » the benefit of the vertical category exemption from the agreement. The explanatory notes of the new version of the vertical class exemption (adopted in 2010) also state that vertical agreements, provided that the relevant market share thresholds are not exceeded, can lead to « improvements in production or distribution (in the absence of significant restrictions) and allow consumers to enjoy a fair share of the benefits that flow from them. » As noted above, resale pricing is one of the vertical restrictions expressly prohibited by competition law, and has been the case for many years. However, since January 2012, this prohibition on setting the resale price is subject to the exception of the maximum resale price that can be set by the seller. Unfortunately, since the introduction of this derogation from the regulator, there have been few official guidelines on the limits of its application. There is only an implicit restriction on the use of maximum resale prices: it should not be set by the seller at a level that creates a high probability that the buyer will set the resale price at the level of the maximum resale prices, as it would in this case be equivalent to setting a resale price. Although there are no specific guidelines for the possible links between resale pricing and other forms of vertical restrictions, the FAS has sometimes identified links in its implementation practices such as upstream exclusivity, which SAF believes has helped to set the resale price. There have been a few instances where the FAS has found that exclusive delivery agreements (i.e. the supplier has only one buyer) between a supplier with a significant market share and a buyer have resulted in price increases due to limited competition between distributors of the supplier`s product. In these cases, the FAS concluded that, even in the absence of explicit agreements on the resale price between the supplier and its distributor, the mere fact of exclusive de facto agreements between them led to an effective fixing of the resale price, which is prohibited by the Competition Act. It is important to note that courts sometimes do not support such an approach to FAS. Thus, in the 2011 decision of the Moscow Regional Court of Arbitration, in the context of the proceedings against the Russian fertilizer producer OJSC Sylvinite, it was concluded that there could be no setting of the resale price unless an agreement or an explicit agreement was made. Yes, yes.

The Commission`s vertical guidelines state that « the negative effects of vertical restrictions are reinforced when multiple suppliers and their customers organize their exchanges in a similar manner, resulting in so-called cumulative effects. »