VBER Public Consultation

Over the past two years, we have been involved in providing feedback to the European Commission on different topics, including the proposed revision of the Vertical Block Exemption Regulation (VBER). 

The EU proposed a revision of the VBER due to changes seen in markets since introducing the original rules. The EU wants to gather feedback from stakeholders and assess whether they need to change the VBER and if so, what needs to change. 

The VBER in a nutshell

The VBER covers vertical agreements between companies in the production/distribution chain. The VBER is a sort of “safe harbour” for agreements that are compliant with cartel law. It lays down certain situations in which an agreement (which would otherwise not be allowed) is deemed compliant with cartel law. The VBER is not sector-specific and has a broad scope, e.g. distribution agreements, franchise agreements, spare parts supply agreements, etc. 

Nonetheless, the VBER is very relevant for independent companies in the marine engine (after)market, especially for SMEs. The most relevant part is the so-called “hardcore restrictions” i.e. clauses which parties are not allowed to agree upon. These restrictions bring legal certainty. Coupled with a robust set of rules, they could make it more difficult for monopolisation to develop in the vertical supply chain. 

As EMISA, our feedback focused mainly on:

• The threats that digitalisation brings to the vertical supply chain, e.g. passwords on ship ECUs, no access to data generated from the engine, etc.
• The vertical integration of engine manufacturers into the spare parts aftermarket, where they are becoming direct competitors to independent companies. 

Consultation

It all started with a public consultation initiative of the European Commission. The consultation consisted of a questionnaire and an optional submission. The questionnaire contained specific questions addressing the different rules laid down in the VBER and our view of the challenges with vertical relations in the spare parts aftermarket. 

This initial stage was a great way to present our position to the Commission and influence the future text of the VBER. Our main goal was to include hardcore restrictions regarding digitalisation, access to data, and vertical integration in the revised version of the Regulation. 

The Brussels Workshop and our submission

In November 2019, the European Commission invited our team to a workshop in Brussels. The attendees were stakeholders that answered the questionnaire. In the end, one of our ideas made it to the top 10 of the workshop. It concerned adding a rule that provides access to machine-generated data to enable an end-user to maintain/service their product or choose their service provider.

After the workshop, our team also met with the Deputy Head of Unit “Antitrust Case Support & Policy” at the European Commission’s Directorate-General for Competition. We agreed to send in a submission on the VBER, which you can find here under the “Evaluation Phase” sub-heading. 

Results

The European Commission eventually produced a report on the revision of the VBER, which included some of our ideas on how to improve the VBER. This was a great success for EMISA and the result of many hours of hard work. 

From the very beginning, we were involved in this revision process, ensuring our voice is heard. As all of our goals related to influencing the rules, this is a long term one. It may take time, but having our feedback considered by the EU is a big step for the association and hopefully for all independent companies. 

Our activities are not limited to guiding our members. We are constantly in contact with the EU, IMO, and other relevant organisations and institutions, representing the interest of our members as independent manufacturers, suppliers, and service providers in the marine engine (after)market.