Vertical Agreement

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Vertical Agreement

An agreement between two companies at different levels of the supply chain to work together. At its worst, a vertical agreement can indicate collusion. However, this is ordinarily not the case; a franchise contract, for example, is a vertical agreement.
References in periodicals archive ?
3 of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector ( hereinafter referred to as block exemption 461/2010).
Among the greatest threats identified were vertical agreements (with suppliers and competitors) and cartel behavior a distant second.
KZK concluded that the suppliers of bottled refined sunflower oil and their distributors had concluded vertical agreements which hampered or restricted competition on the wholesale bottled sunflower oil market.
From June 2013 there will no longer be sector-specific regulations, and vertical agreements will only be protected by Europe's general Block Exemption policy for all industries (330/2010).
To ensure certainty in the marketplace a Block Exemption was passed meaning the Act did not apply to vertical agreements or land agreements.
These new provisions are the latest step in the European Commission's programme to update all competition law legislation and guidance and follow the new block exemption for vertical agreements which came into force earlier this year.
In 1999, the commission issued a new general regulation which provides a "safe harbor" from the application of antitrust law in the EU for all types of "vertical" agreement provided that the supplier's (franchisor's) market share did not exceed 30 percent (the Vertical Agreements Block Exemption Regulation.
2790/99 on the application of Article 81(3) of the Treaty to Vertical Agreements and Concerted Practices7, OJ [1999], L336/21.
They can also be analyzed in economic terms as a set of vertical agreements whose precise terms and conditions influence both the efficiency of sporting competition (according to some agreed welfare criterion) and the distribution of rents between the participants.
Under the spotlight are the vertical agreements between wholesalers and publishers and the 1994 newspaper code of practice.
Since June 2000, explains Hildebrand, new European competitive rules on distribution and supply agreements--vertical agreements--focus on the economic impact rather than on formal structural arrangements, and companies are required to do a self-assessment of the possible economic consequences of their vertical agreements.
The report indicates that the level of market protection afforded by the breweries may diminish as new rules on vertical agreements change the level of control they can wield.