When it is confirmed that the parties are acting at different trade levels within the meaning of an agreement and that the agreement has an `impact on trade`, the procedure for assessing the vertical agreement under Article 101 of the Treaty on the functioning of the European Union is, on the whole, as follows: some vertical agreements may contain restrictions that do not comply with Article 101 of the Treaty. These are agreements that contain provisions: however, vertical agreements may involve competitive risks if there is a possibility. B to increase barriers to entry, reduce or mitigate competition, and avoid other opportunities in the event of horizontal agreements.  Vertical agreements that meet the exemption requirements and do not contain so-called “strict” restrictions on competition are exempt from the prohibition under Article 101, paragraph 1 of the Treaty on the Functioning of the European Union by Regulation (EC) No. 330/2010 . The main exception concerns vehicle distribution agreements which, until 31 May 2013, are subject to a three-year extension of the Council`s Regulation (EC) (EC) No. 461/2010 (Regulation (EC) No. 1400/2002 .  Although the latter regulation applies Regulation (EC) No. 330/2010 to motor vehicle repair and spare parts agreements as of June 1, 2013, it also complements Regulation 330 with three additional “hardcore” clauses A vertical agreement is a term used in competition law to refer to agreements between companies at different levels of the supply chain. For example, a consumer electronics manufacturer could have a vertical agreement with a retailer to promote its products in exchange for lower prices.
Franchising is a form of vertical agreement and, according to EU competition law, this falls within the scope of Article 101.  The vertical agreement is illegal under Article 101, paragraph 2, of the TFUE where the agreement has a restrictive “object” or a restrictive “effect” within the meaning of Article 101, paragraph 1, of the EUTS. However, if the parties can demonstrate that it is covered by a potentially applicable category exemption or that it may be expressly justified for reasons of effectiveness within the meaning of Section 101, paragraph 3, of the TFUE, it may be exempt from the tax. Whether a vertical agreement actually restricts competition and whether, in this case, cartels predominate often depends on the structure of the market. Vertical agreements are widely accepted because they are less likely to solve competition problems than horizontal agreements. Horizontal agreements are concluded between two current or potential competitors. Competition problems arise when competition is not sufficient at one or more commercial levels. Compared to other vertical agreements, there is more flexibility.