The Transatlantic Divide on Verticals—The Underlying Reasons and the Way Forward

While the U.S. Supreme Court decision in Sylvania put an end to the debate on the treatment of vertical territorial restraints under the U.S. antitrust rules forty years ago, the debate continues in the EU. EU applies a broad presumption that such restrictions are anticompetitive. The EU schism on verticals is becoming more and more relevant for multinationals, as the European Commission has recently started a number of investigations targeting restrictions in online distribution. This article shows that the EU policy on vertical restraints is driven predominantly by the perceived need to use the competition rules to further the integration of the EU internal market. A more teleological interpretation of that objective would allow for a more flexible, effects-based analysis of vertical agreements under the EU competition rules.