The UK Approach to Vertical Restraints of Competition: Report to the XVIIth International Congress of Comparative Law, July 2006

Many systems of competition law have adopted an ambivalent approach to vertical agreements. In the main, such agreements—for example, distribution agreements, purchasing agreements, or franchising agreements—are considered to be pro-competitive. Under specific circumstances, however, it is thought that they may yet cause harm to consumer welfare. On the introduction of the new competition regime in the UK under the Competition Act 1998, this ambivalence was reflected in the exclusion of vertical agreements from the ambit of the Chapter I prohibition (that on anti-competitive agreements) to leave them potentially subject to challenge only when utilised by dominant firms (under Chapter II). This arrangement has since been revised. The aim of this survey is to review and explain the current UK approach, as influenced by the equivalent EC law, to the assessment of vertical agreements.