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.
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References in periodicals archive ?
Chisholm has advised clients on multiple high-profile UK and EU mergers, vertical agreements, and dominance cases since joining CRA in December 2015.
Since the landmark Grundig/Consten case, it has been firmly established that Article 101 TFEU covers both horizontal and vertical agreements. (4) In addition, the requirement that interstate competition must be affected has been interpreted very broadly: also agreements between undertakings (manufacturers and retailers) located in the same EU member-state may come within the scope of the prohibition, particularly when a network of restrictions creates a cumulative effect hindering interstate trade.
Vertical agreements or restraints are defined by antitrust regulation as "agreements for the sale and purchase of goods or services which are entered into between companies operating at different levels of the production or distribution chain" (European Commission 2010, note 9).
In particular, the language in the 2010 Guidelines generally appears closer than the previous version to the view that firms should be free to select their own distribution strategies, including the use of various kinds of vertical agreements, and that consumers can benefit from these, especially when firms do not have high market power.
In those circumstances, several individual vertical agreements can be perceived as parts of a broader horizontal agreement among the suppliers, either instigated or merely facilitated by the reseller-customer.
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.
For the Luxembourg-based court, vertical agreements of this kind - ie agreements concluded between non-competing companies - can indeed restrict competition.
It is about Regulation 1400/2002 of exemptions by category in the automobile sector concerning the application of Article 81, Paragraph 3 of the treaty for categories of vertical agreements' and practices.
Under the bill, anti-competitive agreements could be either "horizontal" or "vertical." The former refers to agreements "entered into between two or more enterprises operating at the same level in the market." Vertical agreements cover those "at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services."
1207, 1219 (2008) ("Antitrust law draws a fundamental distinction between so-called horizontal and vertical agreements.").