New competition rules for supply chain agreements in the EU and UK as of 1 June 2022
To promote competition and the market benefits it brings, both the UK and the EU prohibit anti-competitive agreements and conduct by entities that constitute an abuse of a dominant market position. Anti-competitive agreements may be unenforceable, and those involved can be fined substantial sums.
The competition regime naturally applies to agreements between competitors but also applies to vertical agreements: agreements between two or more parties which each operate (for the purposes of the agreement) at different levels of the supply chain for the purpose of purchasing, supplying, or reselling goods or services. Distributors, suppliers, agents and resellers, and licensors and licensees should therefore be alert to the types of provisions restricted in vertical agreements under the competition regime.