Structuring Third Party Reseller Agreements under Regional Data Laws
Reseller agreements must decouple commercial list ownership from statutory data control, enforcing flow-down DPAs and uncapped breach indemnities.
VBER Compliance
Meaning
European antitrust standards for distribution networks exempt certain vertical agreements from the general ban on anti-competitive practices. To achieve vber compliance, a vendor must ensure that their selective distribution or pricing policies do not contain hard core restrictions. This standard protects the vendor from facing massive antitrust penalties in the European Union.
Pricing Constraint
The regulation strictly bans resale price maintenance, which is when a vendor sets a minimum price that resellers must charge. However, vendors are allowed to set maximum prices or recommend retail prices, provided this does not result in a fixed price. This allows for some pricing discipline while still allowing resellers to compete on price.
It also helps to prevent price gouging by distributors during times of high demand.
Territorial Restriction
A vendor can restrict where a reseller can actively seek out customers, but they cannot stop them from selling to customers who approach them from other regions. These rules prevent vendors from splitting the European market into independent national zones and help to keep prices fair for consumers across the continent.
Exemption Threshold
The exemption only applies if the vendor’s and the distributor’s market shares are below thirty percent. If either company exceeds this limit, the agreement is no longer automatically exempt and must be evaluated under general competition rules. This keeps the market open and prevents dominant firms from using these rules to block competition.