Distribution agreements are where commercial strategy and competition law meet. The EU and UK each adopted new vertical block exemptions on 1 June 2022 that give a safe harbour below 30% market share but strip it from agreements that fix resale prices or block online sales. India and the UAE have strengthened their own regimes, with Indian penalties now based on global turnover and a new UAE competition law with implementing rules issued in 2025 and 2026.
The EU and UK safe harbours
Regulation (EU) 2022/720 exempts vertical agreements where the supplier and the buyer each hold no more than 30% of their relevant markets. It applies from 1 June 2022 to 31 May 2034. Germany applies the EU block exemptions to purely domestic agreements as well. The UK adopted its own Vertical Agreements Block Exemption Order on the same date, with the same 30% structure, and it ceases to have effect on 1 June 2028.
The safe harbour is lost for the whole agreement if it contains a hardcore restriction. The key ones are fixing a fixed or minimum resale price (maximum and recommended prices are allowed if not enforced through pressure or incentives), restricting where or to whom a distributor may sell beyond the permitted exceptions, and preventing effective use of the internet to sell. Exclusive distribution is possible: a supplier may restrict an exclusive distributor's active sales into territories or customer groups reserved to itself.12345678
India, the UAE and Singapore
India's 2023 amendment widened section 3(4) of the Competition Act to cover any agreement between enterprises at different levels of the chain, not only the listed types, while excluding agreements with end consumers. Penalties can reach 10% of average turnover over three years, and turnover now means global turnover from all products and services.
The UAE's Federal Decree-Law No. 36 of 2023 prohibits price fixing, collusive tendering and market sharing, and bars a dominant undertaking, meaning one with more than 40% of the relevant market, from imposing resale prices or conditions. Fines run from AED 100,000 up to 10% of UAE sales. Singapore excludes vertical agreements from its prohibition on anti-competitive agreements, except those mainly about intellectual property, though abuse of dominance rules still apply.91011121314
The United States
Section 1 of the Sherman Act makes every contract or conspiracy in restraint of trade illegal, with criminal fines of up to US$100 million for a corporation. How US courts treat resale price maintenance and territorial restrictions in distribution has developed through case law, and state antitrust laws can be stricter, so US distribution terms need specific advice.15
| Market | Instrument | Rule or threshold | Dates or penalty | Source |
|---|---|---|---|---|
| EU (and DE domestically) | Regulation (EU) 2022/720 | 30% supplier and buyer share; RPM, territorial and online-sales hardcore restrictions | 1 June 2022 to 31 May 2034 | EUR-Lex |
| United Kingdom | VABEO 2022 | 30% market share; RPM hardcore | 1 June 2022; ceases 1 June 2028 | legislation.gov.uk |
| India | Competition Act s. 3(4), s. 27 (as amended 2023) | Any vertical agreement; end-consumer agreements excluded | Up to 10% of average global turnover | CCI |
| UAE (federal) | Decree-Law 36 of 2023; Cabinet Decision 3 of 2025 | Price fixing banned; dominant firms (over 40%) may not impose resale prices | AED 100,000 to 10% of UAE sales | Ministry of Economy and Tourism |
| Singapore | Competition Act, Third Schedule | Vertical agreements excluded from s. 34 (not IP-focused ones) | Not researched | CCS |
| United States (federal) | Sherman Act s. 1 | Restraints of trade illegal | Up to US$100 million (corporations) | US Code |
Decisions to make
- Are both the supplier's and the distributor's market shares at or below 30%?15Above that level the EU and UK safe harbours do not apply and the agreement needs individual assessment.
- Does the agreement or the way it is operated fix or set a minimum resale price?6512Resale price maintenance is hardcore in the EU and UK and removes the exemption for the whole agreement.
- Does the distributor need territorial exclusivity, and how will online sales be handled?78Only active-sales restrictions into reserved territories are allowed, and blocking effective online selling is hardcore.
- Will an EU or UK agreement run beyond the expiry of the block exemption?24The UK Order ceases on 1 June 2028 and the EU Regulation on 31 May 2034.
- Is the supplier dominant in the UAE or India?131210Dominant undertakings in the UAE may not impose resale prices; Indian penalties are based on global turnover.
Documents usually needed
- Market share analysis for supplier and distributor on the relevant markets
- Distribution agreement with territorial, customer and online-sales clauses reviewed against the hardcore list
- Pricing policy and communications to distributors (recommended or maximum prices only)
- Competition compliance guidance for sales teams
Common mistakes
- Enforcing a "recommended" price through threats, delayed supplies or bonuses, turning it into a fixed price
- Banning distributors from selling online or through their own websites
- Copying an EU distribution template into India or the UAE without checking local rules
- Assuming an agreement drafted for the UK will remain exempt after 1 June 2028
- Ignoring market share growth that takes a party above 30%
Questions businesses ask
Can I recommend resale prices to distributors?
In the EU and UK, yes, as long as the recommended or maximum price does not become a fixed or minimum price through pressure or incentives.65
How long will the EU and UK vertical exemptions last?
The EU Regulation runs to 31 May 2034; the UK Order ceases to have effect on 1 June 2028.24
Are Indian competition fines based on Indian or worldwide turnover?
Since the 2023 amendment, turnover means global turnover from all products and services, with a cap of 10% of the three-year average.10
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- The EU Guidelines on vertical restraints and the CMA's VABEO guidance could not yet be checked; the module relies on the legal texts only.
- The original text of India's section 3(4) and its appreciable adverse effect test could not yet be checked.
- Saudi Arabia's competition law treatment of vertical agreements and France's specific rules on minimum resale prices were not researched.
- US federal case law on resale price maintenance and territorial restraints, and state antitrust laws, were not researched.
- Whether the UAE competition law applies in free zones was not confirmed; the text does not mention them.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
The EU vertical block exemption applies only if the supplier's market share does not exceed 30% of the market on which it sells and the buyer's share does not exceed 30% of the market on which it buys. EU; agreements capable of affecting trade between Member States. Agreements above the threshold are not presumed unlawful but need individual assessment.
The EU vertical block exemption entered into force on 1 June 2022 and expires on 31 May 2034. EU.
Germany applies the EU block exemption regulations correspondingly to agreements that are not capable of affecting trade between EU Member States, so the EU vertical rules also govern purely domestic German distribution agreements. Federal; section 2(2) of the Act against Restraints of Competition (GWB).
The UK Vertical Agreements Block Exemption Order came into force on 1 June 2022 and ceases to have effect on 1 June 2028. United Kingdom; replaced the retained EU vertical block exemption for UK competition law.
Read on the as-made version; any later amendment or extension of the expiry date was not checked.
Under the UK Order the exemption depends on the supplier's share of the relevant market not exceeding 30%, and restricting a buyer's ability to set its own sale price is a hardcore restriction unless the price is a maximum or recommended price that does not amount to a fixed or minimum price. United Kingdom; articles 6 and 8(2)(a). Article 6 also applies a 30% buyer threshold, as in the EU, which was not separately confirmed on the page read.
Under the EU vertical block exemption, restricting a buyer's ability to set its own sale price is a hardcore restriction, although a supplier may set a maximum or recommend a price provided it does not become a fixed or minimum price through pressure or incentives. EU; hardcore restrictions remove the benefit of the block exemption for the whole agreement.
Under the EU vertical block exemption, restricting where or to whom an exclusive distributor may sell is a hardcore restriction, subject to exceptions that include restricting active sales by the exclusive distributor and its direct customers into a territory or customer group reserved to the supplier. EU; Article 4(b) sets out further exceptions and conditions, including allocation to other exclusive distributors, which were not reviewed in detail. Passive (unsolicited) sales generally cannot be restricted.
Preventing the buyer or its customers from making effective use of the internet to sell the contract goods or services is a hardcore restriction under the EU vertical block exemption. EU; other restrictions on online sales and certain online advertising restrictions may still be allowed.
India's Competition (Amendment) Act, 2023 widened section 3(4) to cover any other agreement amongst enterprises or persons, including but not restricted to those at different stages of the production or supply chain, and excluded agreements between an enterprise and an end consumer. Central law. The amendment also extended tie-in, exclusive dealing and related categories to services.
The original 2002 Act text of section 3(4) and its appreciable adverse effect test could not yet be checked.
Since the 2023 amendment, the Competition Commission of India can impose a penalty of up to 10% of the average of the last three financial years' turnover or income, with turnover defined as global turnover from all products and services. Central law; section 27 as amended. For cartels the Commission may instead impose up to three times profit, or 10% of turnover, for each year of the cartel, whichever is higher.
The UAE competition law prohibits agreements between undertakings that aim or result in restricting competition, including directly or indirectly fixing selling or purchasing prices, collusive tendering and sharing markets or customers by geographical area. Federal; Article 5 of Federal Decree-Law No. 36 of 2023. Market sharing is subject to the commercial agencies law. Individual and category exemptions are possible under Articles 9 and 11.
Under the UAE competition law, an undertaking in a dominant position, or one exploiting another's economic dependence on it, may not directly or indirectly impose resale prices or conditions. Federal; Articles 6(1)(a) and 7(1). Violations of Articles 5 to 8 carry a fine of not less than AED 100,000 and up to 10% of the violator's annual sales in the State in the last financial year (Article 24).
A UAE undertaking is in a dominant position when its market share, alone or jointly with others, exceeds 40% of total transactions in the relevant market. Federal; Cabinet Decision No. 3 of 2025, Article 2. The same decision sets merger notification thresholds of AED 300 million in annual UAE sales or a 40% combined share.
Issued 20 January 2025 and effective 60 days after Official Gazette publication; the publication date was not stated in the text read.
In Singapore, vertical agreements, meaning arrangements between businesses at different levels of the production or distribution chain, are excluded from the section 34 prohibition, except agreements whose primary object relates to intellectual property rights. Third Schedule to the Competition Act 2004. The Minister may by order bring a type of vertical agreement within section 34. Abuse of dominance (section 47) can still apply.
US federal law makes every contract, combination or conspiracy in restraint of trade among the states or with foreign nations illegal, with criminal fines of up to US$100 million for a corporation and imprisonment of up to 10 years. Federal; Sherman Act section 1 (15 U.S.C. 1). How courts assess vertical price and territorial restraints (rule of reason or per se) is case law and was not researched; state antitrust laws apply in addition.
US Code text reproduced by Cornell LII; the official version at uscode.house.gov could not yet be checked.
Questions on this topic
15 statements on competition law for commercial strategy
