Vertical Agreements Under EU Competition Law: Proposals for Pushing Article 101 Analysis, and the Modernization Process, to a Logical Conclusion

D Healey and M Jacbos (eds), Handbook of Research Methods of Competition Law (Edward Elgar, Forthcoming)

TLI Think! Paper 59/2017

King's College London Law School Research Paper No. 2017-23

37 Pages Posted: 6 Apr 2017 Last revised: 8 Mar 2018

See all articles by Miguel de la Mano

Miguel de la Mano

Compass Lexecon

Alison Jones

King's College London – The Dickson Poon School of Law

Date Written: March 10, 2017

Abstract

This paper examines how vertical agreements are analysed under Article 101 of the Treaty on the Functioning of the European Union. It observes that, in spite of modernization and the Commission’s promise to adopt a more ‘effects-based’ approach towards vertical agreements, Article 101 analysis has not evolved as might have been anticipated. Rather, it argues that the legal system still fails adequately to reflect, and is out of kilter with, the economic logic of vertical restraints. Not only does it continue to rely heavily on broad presumptions of illegality which are not justified by economic theory or experience (creating a risk of Type I errors), but the dearth of decided cases has meant that a transparent structure for analysing and balancing the competitive harms and benefits of vertical arrangements (especially new online distribution practices) has not developed. This uncertainty has been compounded by the disparities in approach to enforcement emerging at the national level.

The paper considers how best to align EU law with mainstream economic thinking and proposes an approach which focuses more closely on the concepts underpinning the rules than the historic categories of analysis that have, to date, been relied upon. It also suggests how these changes might be effected and an administrable system governing vertical restraints put in place. It argues that, in order to achieve this change, the Commission should publish some carefully selected decisions in relation to vertical agreements, especially more complex effects cases. Such decisions will provide the opportunity for scrutiny of the Commission’s policy by the EU courts and ensure that the law in this important area is elucidated, particularly as distribution practices adapt to the challenges presented by the online environment and growth of e-commerce. These decisions, along with the information gathered in the course of the Commission’s e-commerce sector inquiry, may provide the crucial foundations for a necessary review and revision of the current regime and guidelines governing vertical agreements in the EU.

Keywords: Vertical Agreements, Hardcore Restraints, Antitrust Analysis

JEL Classification: K21, L40, L42

Suggested Citation

de la Mano, Miguel and Jones, Alison, Vertical Agreements Under EU Competition Law: Proposals for Pushing Article 101 Analysis, and the Modernization Process, to a Logical Conclusion (March 10, 2017). TLI Think! Paper 59/2017; D Healey and M Jacbos (eds), Handbook of Research Methods of Competition Law (Edward Elgar, Forthcoming); TLI Think! Paper 59/2017; King's College London Law School Research Paper No. 2017-23. Available at SSRN: https://ssrn.com/abstract=2930943

Miguel De la Mano

Compass Lexecon ( email )

23 Square de Meeus
Bruxelles, 1000
Belgium

Alison Jones (Contact Author)

King's College London – The Dickson Poon School of Law ( email )

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

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