Vertical Agreements In Competition Policy

For example, a consumer electronics manufacturer could have a vertical agreement with a retailer that would sell and promote the retailer`s products, possibly in exchange for lower prices. Such agreements could lead to a division of markets and/or the creation and maintenance of territorial restrictions. Similar vertical restrictions may be covered by the section 4 prohibition, unless they fall under a class exemption or individual exemption. Section 4 of Competition Protection Act 4054 (the “Competition Act”) prohibits any agreement between companies with the purpose or effect of preventing, restricting or distorting competition. The types of agreements mentioned above include vertical agreements. Vertical restrictions such as resale price maintenance (RPM), most advantageous clauses for customers, exclusive transactions, discount schemes, non-competition clauses and reverse non-competition clauses are often a success in the history of competition law enforcement in Turkey. Regulation (EC) No. 330/2010 [4] exempts vertical agreements from the prohibition in Article 101, paragraph 1 of the Treaty on the Functioning of the European Union, which meet the requirements for the exemption and do not contain so-called “strict” restrictions on competition. The main exception concerns vehicle distribution agreements which, until 31 May 2013, are subject to a three-year extension of the Council`s Regulation (EC) (EC) No. 461/2010 (Regulation (EC) No. 1400/2002 [5]. [6] Although the latter regulation applies Regulation (EC) No.

330/2010 to motor vehicle repair and spare parts agreements as of June 1, 2013, it also complements Regulation 330 with three additional “hardcore” clauses Even where a category exemption is not applicable, a vertical agreement may continue to benefit from an individual exemption. The parties are authorized to conduct a self-assessment to determine whether the restrictive vertical competition agreement meets the requirements for the individual exemption. Like the EU competition regime, the conditions for individual exemption are: (i) the agreement must contribute to improving the production or distribution of products or to promoting technical or economic progress; (ii) it must give consumers an appropriate share of the resulting benefit; (iii) it should not impose restrictions on the companies concerned that are not necessary to achieve these objectives; and (iv) it should not allow the parties to eliminate competition on a substantial portion of the products concerned. This is not an alternative test and all individual exemption requirements must be met. In addition, vertical agreements appear to be more effective in commercial activity.