ANTICOMPETITIVE PRICE FIXING IN DISTRIBUTION AGREEMENTS – ECJ C-211/22, SUPER BOCK V. PORTUGUESE COMPETITION AUTHORITY

Abstract

On June 29, 2023, the judgment concerning the case C-211/22, Super Bock v. Portuguese Competition Authority, was released by the European Court of Justice (“ECJ”). This judgment delivers a comprehensive review of fundamental competition law principles pertaining to vertical agreements. In this judgement was examined the business approach of Super Bock, a manufacturing Portuguese company. The preliminary ruling emphasizes to the court referring the case the vital distinction between hardcore restrictions as defined by the Vertical Block Exemption Regulation (VBER) and competition-constraining practices falling within the purview of Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). Furthermore, the ruling clarifies the expansive scope of the term “agreement” according to Article 101(1) of the TFEU, while also highlighting the array of (both direct and indirect) evidence that can substantiate the identification of an agreement. In alignment with established legal precedents, ECJ reinforces the principle that an agreement encompassing nearly the entire geographical expanse, though not entirely exhaustive, of a Member State can still impact the inter-member trade. Vertical agreements involve relationships between entities at various levels of the supply chain, such as manufacturers and distributors. The key aspects addressed in this judgment have direct relevance to how manufacturers interact with their distribution networks and set pricing policies, which in turn can affect market dynamics and competition within the manufacturing industry. The Super Bock v. Portuguese Competition Authority judgment serves as a pivotal milestone in clarifying the legal framework governing vertical agreements in the European Union. Its comprehensive analysis of competition law principles provides valuable guidance to businesses operating within the EU, ensuring a more transparent and predictable regulatory environment for vertical agreements and, consequently, fostering healthy competition in the market. The ECJ confirmed for the first time the established EU law principles regarding vertical price-fixing agreements. It emphasizes that an agreement should not rigidly be classified by actions without considering the broader context. Although deviating from stricter framework centered on the primary purpose and severe restrictions may complicate the application of the law, this ruling encourages a more thoughtful evaluation of vertical agreements and their overlap with competition law.