Vertical Agreement

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Description of Vertical Agreement. Explanation.


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Definition Vertical Agreement. Description.

A Vertical Agreement is an arrangement or concerted practice between two or more companies operating at different levels of the production, distribution or supply chain. These arrangements can, but not per se,  substantially prevent or lessen competition and as a result potentially violate antitrust laws. Restrictive vertical agreements may be permitted if parties to the agreement can demonstrate that any technological or efficiency gains resulting from that agreement outweigh any anti-competitive effect.

A fundamental principle of EU competition law is that agreements which may affect trade between EU Member States and have as their object or effect the prevention, restriction or distortion of competition are prohibited. The prohibition extends to agreements governing imports into the EU from third countries.

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Usage (application): Difference Between Vertical Integration and Horizontal Integration

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Compare with: Vertical Merger  |  Vertical Integration  |  Vendor Managed Inventory  |  Alliance Network  |  Horizontal Agreement  |  Cartel  |  Horizontal Merger  |  Horizontal Integration  |  Oligopoly  |  Five Forces

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