If you`re a business owner or a marketer, you may have heard the term “vertical agreements notice" being thrown around. But what does it actually refer to, and why is it important to pay attention to?

A vertical agreement is a contract between two or more parties operating at different levels of the supply chain. It typically involves an agreement between a manufacturer and a distributor or a retailer. Vertical agreements can cover a wide range of topics, including pricing, distribution, marketing, and promotions.

The European Union has specific regulations governing vertical agreements, which are designed to promote competition and prevent anti-competitive behavior. Whenever a company enters into a vertical agreement, it must provide a Vertical Agreements Notice (VAN) to the European Commission.

The VAN is a notification to the commission that the company has entered into a vertical agreement and outlines the terms of the agreement. The commission then evaluates the agreement to ensure that it does not violate EU competition law.

The purpose of the VAN is to provide transparency and ensure that companies are not using vertical agreements to create unfair advantages in the market. By reviewing these agreements, the commission can identify potential competition issues and take action to maintain a level playing field.

If a company fails to provide a VAN, or if the commission finds the agreement in violation of competition law, it can face significant fines and penalties. For example, in 2018, the commission imposed a €111 million fine on Nike for engaging in anti-competitive behavior through its distribution agreements.

In addition, companies may also face reputational damage if they are found to be violating competition law. This can have long-term effects on their brand, customer loyalty, and market position.

Therefore, it is essential for businesses to ensure that they comply with EU regulations and provide a VAN whenever they enter into a vertical agreement. By doing so, they can avoid potential legal and financial consequences and maintain a fair and competitive market.

In conclusion, the vertical agreements notice is a critical component of EU competition law designed to promote transparency and prevent anti-competitive behavior. Businesses must comply with these regulations and provide a VAN whenever they enter into a vertical agreement to avoid legal and financial consequences.