Within the framework of the revision of the Vertical Block Exemption Regulation ("VBER"), and following the publication of its Staff Working Document, the Commission has initiated the second phase of the review process of the Regulation and its guidelines: the impact assessment phase. At the end of October, the Commission published its inception impact assessment in which it outlines the first policy options considered to resolve the issues identified during the evaluation phase.

Broadly speaking, the Commission indicates that the existing rules should be clarified and simplified, in particular by incorporating recent case law, in order to avoid possible divergent interpretations. Notably, it refers to restrictions that have emerged or become more prevalent over the last ten years (such as restrictions on the use of price comparison websites or online advertising) and to new market players, such as online platforms.

The Commission then evokes some areas identified as problematic in the evaluation and that will have to be addressed in the new version of the Regulation. These include (i) indirect measures restricting online sales, (ii) dual distribution, (iii) active sales restrictions and (iv) parity obligations. For each of these topics, the Commission proposes several alternatives to the policies it is considering.

1. Regarding indirect measures restricting online sales, the Commission notes first that online sales have developed into a well-functioning sales channel over the last decade, whereas physical stores are facing increasing pressure. It further states that the evaluation highlighted several concerns, in particular regarding: (i) the impossibility of implementing dual pricing (charging the same distributor a higher wholesale price for products intended to be sold online than for products sold offline) or (ii) the obligation to impose criteria for online sales equivalent to those required for offline ("brick-and-mortar") shops (the "equivalence principle") in the context of selective distribution.

The Commission proposes the following policy options (Options 2 and 3 may be introduced cumulatively):

Option 1: baseline scenario - no policy change.

Option 2: no longer regarding dual pricing as a hardcore restriction, with safeguards to be defined in line with the case law.

Option 3: no longer regarding the imposition of criteria for online sales that are not overall equivalent to the criteria imposed in brick and mortar shops in a selective distribution system as a hardcore restriction, with safeguards to be defined in line with the case law.

2. Regarding active sales restrictions, the evaluation identified various concerns about the complexity and scope of the current rules and proposes the following policies:

Option 1: baseline scenario - no policy change.

Option 2: expanding the exceptions for active sales restrictions to give suppliers more flexibility to design their distribution systems according to their needs.

Option 3: ensuring more effective protection of selective distribution systems by allowing restrictions on sales from outside the territory in which the selective distribution system is operated to unauthorized distributors inside that territory.

3. Regarding dual distribution (i.e. a supplier sells its goods and services to distributors and also directly to end customers), the evaluation highlighted risks that the existing exception in the VBER may be too wide and exclude certain scenarios comparable to dual distribution. It proposes the following policies:

Option 1: baseline scenario - no policy change.

Option 2: limiting the scope of the exception to scenarios that are unlikely to raise horizontal concerns (e.g. introducing a threshold based on the parties’ market shares in the retail market).

Option 3: extending the exception to dual distribution by wholesalers and/or importers.

Option 4: removing the exception from the VBER, thus requiring an individual assessment in all dual distribution cases.

Finally, the Commission indicates that it aims to improve clarity in relation to the treatment of possible efficiencies resulting from resale price maintenance (RPM), in particular through exchanges with businesses on concrete instances regarding the conditions under which efficiencies for RPM can be claimed.

Stakeholders may comment on this impact assessment before 20 November 2020. Towards the end of 2020, the Commission intends to launch a public consultation to gather feedback on the policy options.

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