Vertical agreement

For instance, a manufacturer of consumer electronics might have a vertical agreement with a retailer according to which the latter would promote their products in return for lower prices.

Franchising is a form of vertical agreement, and under European Union competition law this falls within the scope of Article 101.

[1] Whether a vertical agreement actually restricts competition and whether in that case the benefits outweigh the anti-competitive effects will often depend on the market structure.

The inclusion of a 'hardcore' restraint automatically removes the potential benefit of the Block Exemption safe harbour to the whole agreement.

Only where a contextual assessment reveals a 'sufficiently harmful' effect on competition (or a lack of any credible redeeming virtues) can an agreement be legally characterised as ‘by object’ within the meaning of Article 101(1) TFEU.

Nevertheless some of these arrangements might raise concerns under Article 102 TFEU (or its Member State equivalent) where the party imposing the restraint is dominant.