Article 10 Excluded restrictionsI1

United Kingdom

(1)

The block exemption applies to the agreement on condition that it does not contain an excluded restriction.

(2)

Subject to paragraphs (3) and (4), an excluded restriction means—

(a)

any non-compete obligation, the duration of which is indefinite or exceeds five years (and a non-compete obligation which is automatically renewable beyond a period of five years is deemed to have been concluded for an indefinite duration);

(b)

any direct or indirect obligation causing the buyer, after termination of the agreement, not to manufacture, purchase, sell or resell any goods or services;

(c)

any direct or indirect obligation causing the members of a selective distribution system not to sell the brands of particular competing suppliers.

(3)

The time limitation of five years in paragraph (2)(a) does not apply where the contract goods or services are sold by the buyer from premises, land or a vehicle owned by the supplier or leased by the supplier from third parties not connected with the buyer, provided that the duration of the non-compete obligation does not exceed the period of occupancy of the premises or land, or possession of the vehicle, by the buyer.

(4)

As regards paragraph (2)(b)—

(a)

any direct or indirect obligation causing the buyer, after termination of the agreement, not to manufacture, purchase, sell or resell goods or services is not an excluded restriction, provided that the following conditions are fulfilled—

(i)

the obligation relates to goods or services which compete with the contract goods or services,

(ii)

the obligation is limited to the premises, land or vehicle from which the buyer has operated during the contract period,

(iii)

the obligation is indispensable to protect know-how transferred by the supplier to the buyer, and

(iv)

the duration of the obligation is limited to a period of one year after termination of the agreement, and

(b)

any restriction which is indispensable to protect know-how transferred by the supplier to the buyer which has not entered the public domain, whether or not it is time limited, is not an excluded restriction.

(5)

In this article, “non-compete obligation” means any direct or indirect obligation causing the buyer not to manufacture, purchase, sell or resell goods or services which compete with the contract goods or services, or any direct or indirect obligation on the buyer to purchase from the supplier or from another undertaking designated by the supplier more than 80% of the buyer’s total purchases of the contract goods or services and their substitutes on the relevant market, calculated on the basis of the value or, where such is standard industry practice, the volume of its purchases in the preceding calendar year.

Annotations

Commencement

I1: Art. 10 in force at 1.6.2022, see art. 1(b)