EU jurisprudence defines horizontally e.V. as “cooperation between two or more real or potential competitors” and vertically as “cooperation between companies operating at different levels of the production or distribution chain.  At this stage of the analysis, the American and European courts define horizontal and vertical cooperation very similarly. In the United States, horizontal cooperation is generally defined as a restriction imposed by agreements between competitors and vertical restrictions imposed by enterprise-to-company agreements at different levels of a distribution chain.  Although not considered to be characterized restrictions, other provisions are not covered by the category exemption for vertical agreements. However, contrary to the restrictions, these restrictions may, as far as possible, be separated from the agreement. As a result, the category exemption continues to apply to the rest of the agreement. Careful preparation is therefore necessary to avoid one of the limited provisions being at the centre of concerns and to ensure that severance pay is possible as an alternative. While the agreement in question may be subject to another EU group exemption, the category exemption does not apply to vertical agreements. Other common class exemptions include category exemption for motor vehicles, category exemption for technology transfer, category exemption for research and development, and category exemption for specialization agreements. When it is confirmed that the parties are operating at different levels of negotiation within the meaning of an agreement and that the agreement has an “impact on trade”, the procedure for assessing the vertical agreement under Article 101 of the TFUE is, overall, the UK Competition Authority, the Competition Authority for Competition and Markets, has the power to withdraw the category exemption for vertical agreements for certain agreements. Although it is unlikely to exercise this right.
The European Commission also has the power to remove the category exemption for vertical agreements in certain situations. One way to distinguish between horizontal and vertical cooperation between the ECJ is to examine the case law. Thus, in Consten and Grundig, the ECJ did not follow the advice of the Advocate General (GA) and found that horizontal and vertical restrictions are contained in Article 101, paragraph 1. In particular, the GA argued that Article 101 of the EUTF did not apply to vertical agreements between one producer and its distributor, as they are not competitors to the other. However, the ECJ did not agree with the GA, on the grounds that the wording of Article 101 does not distinguish between horizontal and vertical agreements. Instead, the Tribunal found that the section applies to all agreements that could distort competition in the common market.