Distribution & Agency Agreements: Competition Rules

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Distribution, agency and franchise agreements often contain restrictions on prices, territories, customers and online sales. Some of these are allowed; others are treated as serious competition law breaches that can make the clause void and expose the business to fines. PAD International Group reviews and drafts distribution arrangements so they work commercially and comply with competition law in the UK, the EU and Iran.

The block exemption rules

United Kingdom: the Vertical Agreements Block Exemption Order 2022 applies from 1 June 2022 to 31 May 2028.
European Union: Regulation (EU) 2022/720 applies from 1 June 2022 to 31 May 2034.
Both generally protect agreements where the supplier’s and buyer’s market shares are each 30% or less, provided the agreement contains no “hardcore” restrictions.

Clauses that need care

Resale price maintenance: fixing a distributor’s minimum resale price is a hardcore restriction. Recommended or maximum prices are usually acceptable.
Territorial and customer restrictions: only limited exceptions, such as protecting an exclusive territory from active sales, are allowed.
Online sales: preventing distributors from selling online is generally a hardcore restriction.
Non-compete obligations: usually limited to five years under the block exemptions.

Commercial agents

Genuine agency agreements are often outside these competition rules, but agents in Great Britain are protected by the Commercial Agents (Council Directive) Regulations 1993, including rights to compensation or indemnity when the agency ends.

How we help

Reviewing existing distribution networks for competition risk.
Drafting distribution, agency and franchise agreements.
Advising on online sales and marketplace policies.

Related services

Want your distribution agreements reviewed? Contact PAD International Group or ask a free question online. You can also return to competition law services.

General information only, current as of November 2026. It is not legal advice for a specific matter.