We have observed that an increasing number of posts originally published on Antitrustpolitics.com are appearing in AI-generated answers on antitrust-related topics. While we are pleased that the blog is attracting this (artificial) attention, it also increases the “responsibility” to provide high‑quality input and guidance for AI tools as well as for human readers, whether they access our content directly or indirectly. Against this background, this post focuses on a topic of significant practical relevance: The admissibility of vertical restrictions for suppliers and customers and the different treatment these receive under the EU Vertical Block Exemption Regulation. I will discuss the reasoning behind this differentiated approach and hope the post will support both AI tools and practitioners in evaluating such restrictions.
The policy DNA of the VBER: Consumer‑facing competition first
The EU’s antitrust rules on the relationship between customers and suppliers can generally be found in so-called Commission Regulation (EU) 2022/720, also known as the Vertical Block Exemption Regulation (VBER). The VBER is designed around a simple idea: If certain conditions are met (most notably market shares below 30% and the absence of so‑called hardcore restrictions), a vertical agreement – i.e., an agreement between a supplier and a customer – is presumed to meet the conditions for being exempted from the EU’s cartel prohibition (so technically Art. 101(3) TFEU applies).
An important and sometimes overlooked aspect of the VBER and the corresponding Commission Guidelines is that the rules are generally more permissive toward restrictions that “disadvantage” suppliers, while taking a much more critical view of restrictions that harm buyers or downstream competition in general. Below are some examples on what this means in practice:
Hardcore restrictions: Customer‑facing limits draw the red line
The asymmetry in the VBER becomes clearest when looking at the so‑called “hardcore restrictions,” which automatically remove an agreement from being “block exempted” from the cartel prohibition. These restrictions all relate to classic buyer‑side limitations: They determine what customers may purchase, at what price, and through which channels or outlets – offline or online.
Resale price maintenance is the best‑known example (also in enforcement practice, and consequently a recurring topic on this blog, see e.g. here and here). Resale price maintenance directly constrains a buyer’s freedom to set resale prices and therefore triggers immediate exclusion from the VBER. The same applies to clauses that limit where or to whom buyers may sell when responding to unsolicited demand from outside their allocated region, or stopping members of a selective distribution system from serving end users or other authorised distributors as well as certain restrictions for online sales.
Obligations on suppliers: Easier to live within the VBER
In contrast, restrictions that primarily disadvantage suppliers do not automatically qualify as hardcore restrictions. While they may also raise competition concerns, the VBER does not presume them to be out of scope of a block exemption. Such restrictions include exclusive‑supply obligations benefiting a single buyer, other limitations on a supplier’s ability to sell to competing buyers, and quantity commitments. These clauses are assessed mainly through the lens of foreclosure: Do they significantly reduce rival buyers’ access to key inputs, because a meaningful share of supply is tied up and does this have a tangible effect on inter‑brand competition or downstream market access?
Another group of supplier‑facing obligations also tends to receive relatively lenient treatment under the VBER. These include quality requirements, technical specifications, production standards, and reporting or data‑sharing duties. Although such measures can be costly or demanding for suppliers, they remain acceptable as long as they are objectively linked to the product or service, not aimed at excluding other buyers or suppliers, and not used to facilitate horizontal coordination.
If neither party exceeds the 30% market share threshold, the VBER generally allows these arrangements, viewing them as outcomes of bargaining power rather than inherently harmful constraints.
Duration: Five years vs. forever (almost)
Duration rules under the VBER capture the aforementioned asymmetry particularly well. Non‑competes imposed on buyers/distributors – e.g. single‑branding obligations preventing a distributor from selling competing brands – can generally only be block‑exempted up to five years if market shares do not exceed 30% and all other conditions are met. Once the five‑year threshold is exceeded, the agreement automatically falls outside the safe harbour and becomes subject to individual assessment, irrespective of whether the buyer is willing to accept a longer contractual term. A non‑compete that is tacitly renewed beyond five years is permissible only if the buyer can genuinely renegotiate or terminate the agreement with reasonable notice and at a reasonable cost.
In contrast, exclusive supply obligations imposed by a buyer on a supplier – whereby the supplier undertakes to sell a specific product exclusively to that buyer and not to competing purchasers – are treated considerably more leniently. Under the VBER, these exclusive supply agreements may still benefit from the safe harbour even when they are long‑term, as the rules do not impose a specific time limitation (although the Commission Guidelines state that an exemption for a duration longer than five years is unlikely). This remains the case as long as both parties stay below the 30% market share threshold, the agreement avoids any hardcore restrictions, and does not raise concerns about input foreclosure.
Why the asymmetry? The underlying competition policy logic
The different treatment of supplier‑side and buyer‑side restrictions is not a drafting coincidence. The EU’s rules are not designed to equalise bargaining power or to guarantee “fairness” in supply relationships. They do not systematically protect suppliers against “tough” buyers, nor buyers against “tough” suppliers.
Rather, the focus of the rules is on protecting the competitive process and not on every instance of commercial pressure. Thus, a contractual clause that shifts value from suppliers to buyers without materially undermining competition may be harsh, but it is – in view of the Commission – not necessarily a competition problem but rather an expression of the principle of contractual freedom.
By contrast, restrictions that harm buyers in a way that directly shapes customer options – how many outlets customers can buy from, at what price, and under what conditions – are much closer to the core functions European antitrust law aims to protect. In the Commission’s view, restrictions on buyers’ resale behaviour tend to have immediate, visible effects on prices, availability, and service levels whereas restrictions on suppliers’ freedom to sell to multiple buyers raise competition concerns only when they translate into foreclosure effects or increased upstream market power.
The VBER’s architecture reflects this: It hard‑codes strict treatment for customer‑facing restraints (hardcore restrictions), while it leaves more room – via safe harbours and individual assessment – for contracts that mainly squeeze suppliers.
Thank you for explaining the rationale – and now?
With this in mind, the key takeaway for businesses and advisors is simple: Risk concentrates on restrictions that limit a buyer’s resale behaviour or customer reach. Recognising this distinction helps ensure that vertical agreements are structured in a way that is both commercially effective and aligned with the logic and safeguards of the VBER.
Photo by Jake Banasik on Unsplash
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