PublishedMay 10, 2022

New EU Distribution Rules Will Allow Discrimination Against Online Commerce

Brussels, BELGIUM — The European Commission published the revised Vertical Block Exemption Regulation and associated Guidelines (VBER) today. This update sets the terms of trading between suppliers and their retailers or distributors for the next decade, both offline and online. The VBER is set to replace the current rules on 1 June 2022.

The Computer & Communications Industry Association (CCIA Europe) notes that the new guidelines mark a u-turn from the Commission’s earlier insistence that what is illegal offline should also be illegal online by allowing restrictions of competition online, that are illegal offline.

In particular, the new rules make it easier for big brands and suppliers to discriminate against online sales channels; notably with respect to pricing, selective distribution systems, and other restrictions of competition which were previously prohibited. In addition to increasing prices for consumers and reducing competition, the revised VBER is likely to bring greater uncertainty and harm to small and medium-sized merchants in Europe.

CCIA Europe is committed to supporting the digitisation of the EU economy and deepening of the digital single market, as such it has participated in European Commission consultations over the past years. Throughout this process, the Association expressed concerns that, the proposed changes would facilitate discrimination against online sellers to the detriment of consumers and smaller merchants. 

The following can be attributed to CCIA Policy Manager, Mathilde Adjutor:

“During the COVID lockdowns, many traditional businesses found their way online. Now the Commission wants them to move back offline again. The reversal of existing policy will increase prices, reduce consumer choice, and slow Europe’s digital transformation.”

“With these changes, anticompetitive agreements that would be illegal for big brands and large merchants offline will become effectively legal online. CCIA Europe cautions against giving big manufacturers and brands more leverage to discriminate against online sales channels.”

“Using competition tools to favour big brands will likely have negative consequences, particularly for consumers and small businesses who benefit from the competition that online distribution channels have created.”

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