Draft VABEO Guidance
Detail of outcome
Final Guidance
12 July 2022: the CMA has published guidance to accompany the Vertical Agreements Block Exemption Order (VABEO).
VABEO comes into force
1 June 2022: The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (the VABEO) has come into force.
This Order is a block exemption Order under section 6 of the Competition Act 1998 (‘CA98’). It gives effect to the CMA recommendation that certain vertical agreements (as defined in the Order) constitute a category of agreements which are likely to be exempt agreements as a result of section 9 of the CA98. Agreements which fall within the category specified in the VABEO are exempt from the prohibition in Chapter 1 of the CA98.
The recommendation was made by the CMA following consultation in accordance with section 8(1) of the CA98.
The block exemption applies from 1st June 2022 and will cease to have effect on 1st June 2028.
Feedback received
Original consultation
Consultation description
This consultation ran from 31 March 2022 to 5pm on 5 May 2022
The CMA is launching its consultation on draft guidance to accompany the Vertical Agreements Block Exemption Order (VABEO). This follows on from the CMA’s final recommendation to the Secretary of State at the Department for Business, Energy and Industrial Strategy regarding the retained Vertical Agreements Block Exemption Regulation (VABER). The CMA is seeking responses by 5 May 2022 at 5:00pm.
The Competition Act 1998 (CA98) prohibits agreements between businesses that restrict competition in the UK (unless they meet the conditions for exemption in section 9(1) of the CA98 or are otherwise excluded). This is known as the Chapter I prohibition. 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 block exemption order. In this way, a block exemption order provides legal certainty for businesses.
The purpose of this guidance is to explain how the CMA applies the Chapter I prohibition in CA98 to vertical agreements, ie agreements between businesses operating at different levels of the supply chain. In particular, it describes the application of the proposed VABEO to vertical agreements and is intended to help businesses assess vertical agreements to establish whether they fall within the scope of the VABEO.
In accordance with our policy of openness and transparency, we will publish non-confidential versions of responses on our webpages. If your response contains any information that you regard as sensitive and that you would not wish to be published, please provide at the same time a non-confidential version for publication on our webpages which omits that material and which explains why you regard it as sensitive. When submitting your response please also let us know if you wish to remain anonymous.
The responses to the present consultation may be shared with Department for Business, Energy and Industrial Strategy in order to facilitate the preparation of the final version of the VABEO.
Please email your response to vberreview@cma.gov.uk. You can also contact us with any queries using this email address.
Personal Data
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For more information about the CMA’s statutory functions, how the CMA processes personal data and your rights relating to that personal data (including your right to complain), please see the CMA’s Personal Information Charter.
Documents
Updates to this page
Last updated 12 July 2022 + show all updates
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Detail of outcome and responses to consultation published.
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Update added to the page following The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 coming into force on 1 June 2022.
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First published.