The UK Competition and Markets Authority (CMA) has published for consultation its much-anticipated draft guidance on vertical agreements (Draft Guidance).

The EU Vertical Block Exemption Regulation (VBER) exempts certain categories of vertical arrangement (agreements between businesses at different levels of the supply chain) from the prohibition on anti-competitive agreements. The VBER, which was retained into UK law post-Brexit, is due to expire on 31 May 2022 in the UK and the EU. Regulators in both jurisdictions have been separately consulting on whether to extend it and, if so, how it and its associated vertical guidelines should be updated. Both jurisdictions propose to renew and update the application of the block exemption once it expires.

The UK government released a draft of the proposed Vertical Agreements Block Exemption Order (VABEO) in February 2022. The Draft Guidance, published on 31 March, provides guidelines on how businesses should apply the proposed VABEO as well as how to assess vertical arrangements that do not fall within its scope. When finalised, the VABEO and the Draft Guidance will, in the UK, supersede the VBER and the European Commission’s vertical guidelines. Companies with activities across the UK and EU will need to ensure that they are compliant with both sets of rules.

Our alert highlights the main changes proposed in the UK, and how they compare with the planned approach of the EC.