Under vertical agreements, one of the crucial aspects is the allocation of responsibility and burden of proof. When such agreements impact competition, parties involved must ensure that they adhere to antitrust laws. The burden of proof, in particular, is a legal requirement that one party must meet to prove their innocence.
Under vertical agreements, the burden of proof typically lies with the party that is accused of anti-competitive conduct. This means that if someone claims that the agreement has caused harm to competition, the party responsible for the practices must prove that their actions were lawful.
Vertical agreements are contracts between businesses at different levels of the same supply chain. They aim to regulate aspects such as pricing, distribution, and provision of services. These types of agreements are generally not considered inappropriate unless they affect competition in a negative way.
The burden of proof in vertical agreements is an essential tool for ensuring fair competition. It helps to prevent anti-competitive conduct and encourages market players to comply with antitrust laws. It also ensures that companies that engage in anti-competitive conduct bear the responsibility of proving their innocence.
For example, if a supplier and a distributor agree to fix the resale price of a product, it is presumed that the agreement is anti-competitive. The burden of proof, in this case, lies with the parties involved in the agreement, to prove that the agreement did not harm competition.
There are two categories of vertical agreements: hardcore restrictions and non-hardcore restrictions. Hardcore restrictions, such as price-fixing, territorial restraints, and customer allocation, are presumed anti-competitive and are prohibited. Non-hardcore restrictions, such as exclusive distribution agreements, are allowed as long as they do not harm competition.
The burden of proof in vertical agreements applies to both hardcore and non-hardcore types. When it comes to non-hardcore restrictions, the burden of proof lies with the party alleging harm to competition. However, in the case of hardcore restrictions, the burden of proof always lies with the party responsible for the practices.
In conclusion, under vertical agreements, the burden of proof is an essential requirement for ensuring fair competition. It ensures that parties responsible for anti-competitive conduct bear the responsibility of proving their innocence. For parties involved in vertical agreements, it is essential to understand the legal requirements surrounding burden of proof and ensure compliance with antitrust laws.
