In many industries, vertical agreements are fundamental to the way companies distribute their products to consumers. They have also been the focus for vigorous economic debate on the extent to which they might, in principle, give rise to anti-competitive effects. It is therefore an area in which form-based rules have been largely discredited and the case for detailed economic analysis is firmly established as central to the legal assessment.

RBB Economics has been involved in vertical cases considered at the European level under both Article 101 and Article 102 TFEU, as well as numerous national cases. We have analysed vertical restraints in sectors including new cars, beer, petrol retailing, chemicals, tobacco products, fine fragrances and luxury goods, toys and games and impulse ice cream.

	Economic analysis of restrictions
	Many vertical agreements contain meaningful restraints on commercial freedoms that do not amount to a restriction of competition in the sense intended by Article 101(1). The effects-based enforcement regime that is now being applied across Europe provides wide scope for employing economic arguments to establish that vertical restraints do not fall foul of the legal prohibition on anti-competitive restraints. We have wide experience of analysing the impact of restraints on competition.
	Applicability of the verticals restraints block exemption
	The EC vertical restraints block exemption provides a safe harbour for vertical restraints entered into by upstream firms whose market share falls below the 30% threshold. RBB Economics has wide experience in advising on market definition and market shares in order to assess the applicability of the block exemption. We have also advised extensively on the various exceptions and grey areas surrounding the block exemption.
	Individual exemptions
	Even where the terms of general or sector-specific block exemptions do not apply in a particular case, individual exemption may be obtained under Article 101(3). The European Commission has published guidelines on the factors relevant to such exemptions that require specific economic analysis. Our economists have worked with companies on a case-by-case basis to analyse the markets in which they operate, often focusing on the appropriate interpretation of relatively substantial market shares, and the precise effects of their distribution arrangements on competition, prices and consumer welfare.
	Vertical restraints in the presence of market power
	Competition authorities frequently raise concerns about the potential for dominant firms’ relationships with their distributors and suppliers to result in foreclosure of competitors. However, whilst market power is a necessary condition for most theories of harm from vertical restraints, firms with market power may still have pro-competitive motivations for imposing such terms. We have worked with clients to develop objective economic analyses of the impact of particular vertical restraints, such as exclusivity arrangements, in order to evaluate allegations of abuse against a robust economic framework.