However, the overall number of decisions recorded in our dataset (72) was the highest in recent years. This indicates that authorities are increasingly willing to take a more conciliatory approach to penalizing vertical infringements, with 61% of decisions in 2023 involving settlement or other forms of cooperation (up from 42% in 2022 and 26% in 2021). 

Key statistics

Consumer & retail continues to be the key focus for enforcement against vertical restrictions

There continued to be a high volume of decisions recorded in the consumer and retail sector, rising from 26 in 2022 to 38 in 2023. Fine levels remained generally low, with the median penalty imposed being only USD0.5m, however their potential impact is still significant given the smaller scale of businesses active in the segment.

Authorities look to cure pricing arrangements in the life sciences sector

Authorities across the world raised concerns with vertical restrictions in the life sciences sector in 2023. Over 85% of decisions reached in the sector focused on retail price maintenance, and although the associated fines added up to just USD8.3m, remedies were imposed in 9 out of the 14 cases. This is perhaps driven by a sector-specific goal of addressing problematic conduct as quickly as possible – the average length of investigation across these 9 cases was just 138 calendar days, less than one-quarter of the overall average for non-cartel decisions in 2023.

Key themes in vertical and other non-cartel enforcement

Luxury goods in the spotlight for online and territorial sales restrictions

Decisions focusing on online sales restrictions accounted for 53% of global fines in 2023 (albeit only 5% by number of cases). This was largely driven by the standout EUR91.6m penalty imposed on a Swiss luxury watch maker for preventing retailers from sending watches to customers in the post, and thereby effectively ruling out online sales. It was the second such restriction penalized by the French authority in 2023 – the agency also fined a luxury tea seller EUR4m for prohibiting online sales of its branded products for a period of 15 years.

Elsewhere in Europe, the EC issued a statement of objections accusing a clothing company and its licensee of restricting cross-border and online sales, and the Polish competition authority fined a bicycle manufacturer USD0.6m for prohibiting its retailers from selling bicycles online.

RPM continues to be the most common form of vertical conduct red flagged across the world 

Resale price maintenance (RPM) was a key focus for authorities across the world, with total fines of USD76.3m.

The Czech Republic’s UOHS issued 12 infringement decisions for RPM, all targeted at businesses in the consumer and retail sector. However, it agreed settlements in 11 of these cases, and fines were reduced significantly – up to 70% in some instances – where the infringing firms undertook to introduce new compliance programmes (or strengthen existing ones).

Outside of Europe, Australia's Competition and Consumer Commission (ACCC) persuaded courts to levy a record USD10m fine on a power tool supplier for contractually restricting sales below a specific minimum price, and enforcing these agreements by warning – and in some cases refusing to supply to – dealers that offered to sell or sold the products below this price. In Turkey, nine cosmetic companies agreed to pay USD12.5m to settle resale price maintenance allegations put forward by the Turkish competition authority (TCA). The TCA also imposed fines of USD26.3m on four homeware appliance companies for imposing minimum prices on its distributors, ending a long investigation that had initially focused on alleged online sales restrictions.

Key legal developments relating to restrictions on vertical agreements

Not so “hardcore” after all? ECJ makes clear that authorities must always look at the full picture

The European Court of Justice (ECJ) ruled in June 2023 that authorities cannot automatically conclude that agreements categorized as “hardcore restrictions” for the purposes of the “block exemption regulations” should be treated as “by object” infringements under general competition rules. Instead, before penalizing such conduct, authorities need to analyze whether the agreement presents a sufficient degree of harm to competition, taking into account the content of an agreement’s provisions, its objectives, and the economic and legal context of which it forms a part. The ECJ ruling followed a referral from the Lisbon Court of Appeal in its review of the Portuguese competition authority’s (PCA) fine against Super Bock for RPM.

The ECJ’s ruling cuts across the standard working assumptions of most competition authorities across Europe – including, most notably, the recently revised vertical guidelines published by the EC in 2022, which state that hardcore restrictions for the purposes of the block exemption regulation are generally restrictions of competition by object.

Similar discrepancies between guidance and case law have been seen in recent years in the UK – the Competition Appeal Tribunal (CAT)’s 2022 ruling in Compare the Market found that wide MFNs do not necessarily have an anti-competitive effect, which was seemingly at odds with the CMA’s decision to characterize such provisions as “hardcore restrictions” in its revamped vertical regulations and guidance.

While these developments indicate that firms may be able to raise defenses against conduct that was previously thought of as a clear red flag, the argument is unlikely to be an easy one to win. Indeed, despite the ECJ’s ruling, Super Bock was not able to successfully avoid a penalty – with the Lisbon Court of Appeal ultimately deciding to re-impose the record EUR24m fine initially issued by the PCA.