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An Example Of Vertical Agreement

Where the other conditions of the vertical category exemption are met (including the market share of suppliers and buyers less than 30%), provided that the restrictions apply only to active sales (i.e. do not restrict passive or unsolicited sales) and the restrictions apply only to sales in areas attributed exclusively to another buyer (or supplier itself) , these agreements fall within the Safe Harbor, created by the vertical category exemption. As such, they are not considered a violation of Article 101. Where restrictions are placed on active sales in areas reserved exclusively for another buyer (or the supplier itself) in agreements between a supplier or buyer with a market share of more than 30%, these agreements do not fall within the scope of the vertical class exemption, but may nevertheless benefit from an individual exemption under Article 101. paragraph 3. The Commission`s vertical guidelines also list two very specific cases in which, looking more de-in-depth, apparently severe territorial restrictions do not fall within the scope of Article 101, paragraph 1, or qualify for an exemption under Article 101, paragraph 3. First, restrictions on passive sales by other buyers, for which a buyer is the first to sell a new brand – or the first to sell an existing brand in a new market – and make substantial investments, may lie outside of Section 101, paragraph 1, in the first two years for which the buyer sells the contract property. Second, when a buyer conducts a genuine review of a new product in a limited area, restrictions on active sales outside that area may not fall under Section 101, paragraph 1. On 13 January 2014, the Commission announced that it had opened a formal procedure for reviewing licensing agreements between several major US film studios and Europe`s largest pay-TV companies.

as licensing agreements could hinder the provision of pay-TV services beyond EU borders. In July 2016, the Commission agreed that one of the US film studios under investigation, Paramount, was not obliged to ban passive sales of a European pay-TV company outside its licence territory or to grant absolute territorial protection in that area for a period of five years. In its decision, the Commission found that the contentious clauses contained in Paramount`s licensing agreements were anti-competitive in nature, as they were intended to prohibit or limit passive cross-border sales and to grant absolute territorial exclusivity with respect to Paramount`s content. The Commission`s investigation into several other major US film studios and Europe`s largest pay-TV companies, including Canal Plus, which filed a motion in December 2016 to quash the Commission`s decision to accept Paramounts` commitment is ongoing.

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