Vertical Agreements from Competition Law Perspective

Vertical agreements refer to agreements made between those entrepreneurs who are at different level of the production chain. These agreements may contain some restrictive clauses which are not compatible with competition rules and regulation. Some of them have both negative and positive effects on competition. Rule of reason and economic analysis can determine their prohibition or permission. At the same time there are some other terms which، due to their special features and inherent negative effects، are regarded as presumptively and Per se illegal and named as hardcore restrictions، such as minimum resale price maintenance and territorial restrictions. At the first part، this article discusses the concept of prohibited vertical agreements. It also examines various instances of these agreements، and analyses each instance from comparative perspective of European Union، United States and some other countries. At the second part of this article، Iranian competition law in the light of vertical restrictive clauses is examined. In doing so، some shortcomings of Iranian competition rules and regulation in respect of hardcore restrictions will be highlighted by presenting a practical and critical assessment. This article concludes by proposing some recommendations for reform of Iranian competition law as to restrictive vertical agreements.