UK Vertical Agreements After Competition Law Reform 2026: Practical Steps for Suppliers and Distributors

Vertical agreements UK compliance has moved to the top of the corporate risk agenda in 2026, and every supplier, distributor and reseller operating in Britain needs to act. After reading this article you will be able to identify which of your distribution contracts require immediate redlining, understand how the Competition and Markets Authority is prioritising enforcement of resale price maintenance and online marketplace conduct, and run a structured compliance programme that reduces your exposure to investigation and penalty. The 2026 reform environment, combined with a more assertive CMA, has changed the calculus for commercial teams who previously treated pricing and territorial clauses as routine boilerplate.

This is a practical playbook, checklists, sample redlines and a project timeline, not an academic survey.

Why suppliers and distributors must act now on vertical agreements UK

The commercial reality is straightforward: vertical agreements, contracts between businesses operating at different levels of the supply chain, such as a manufacturer and its distributor, carry real competition-law risk when they restrain how a buyer resells goods or services. The prohibition on anti-competitive agreements set out in Chapter I of the Competition Act 1998 applies to vertical restraints, and the CMA has consistently treated the most serious vertical infringements, such as resale price maintenance, as enforcement priorities. In 2026, heightened attention across the profession, evident from the agenda of the Law Society Competition Conference 2026, has sharpened the focus on distribution practices, online sales restrictions and pricing policies.

For in-house counsel and commercial teams, the message is that the cost of doing nothing has risen. A single unlawful resale price maintenance clause, or an unmanaged marketplace pricing policy, can trigger an investigation, financial penalty and reputational damage. The good news is that the remedial work is well within reach: most of it involves disciplined contract review, clear internal policy and staff training. This article gives you the concrete steps to update your vertical agreements UK arrangements before the CMA comes knocking.

1. What the 2026 reform changes for vertical agreements

The direction of travel in 2026 is toward stronger enforcement tooling and clearer expectations of businesses. To understand what has changed, it helps to separate the enduring legal framework from the reform overlay that shapes how that framework is enforced.

Key legal changes affecting vertical restraints UK

The core prohibitions have not been repealed, they have been reinforced. The essential architecture remains:

• Chapter I prohibition. The Competition Act 1998 prohibits agreements between undertakings that have as their object or effect the prevention, restriction or distortion of competition within the UK. This is the provision that captures unlawful vertical restraints such as resale price maintenance and absolute territorial protection.
• The retained Vertical Agreements Block Exemption. The UK operates its own block exemption for qualifying vertical agreements, the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022, which came into force on 1 June 2022, replacing the retained EU regime. Agreements that fall within its conditions (including relevant market-share thresholds and the absence of hardcore restrictions) benefit from exemption; those containing hardcore restraints do not.
• Enforcement and investigatory powers. The framework in the Competition Act 1998, together with more recent reforms to the CMA’s powers, provides the machinery for investigations, information-gathering and, in the most serious cases, individual accountability.
• The CMA’s expanded operational focus. As the UK’s principal competition regulator, the Competition and Markets Authority sets its enforcement priorities and allocates resources through its annual planning process. The reform environment of 2026 has been accompanied by clearer public signalling that distribution and pricing practices are within scope.

For comparative context, practitioners familiar with the EU regime will recognise the same doctrinal building blocks, the treatment of hardcore restraints, the analysis of online sales restrictions and the framework for exemption, that inform the European Commission’s approach to vertical agreements. While the UK now sets its own rules following the end of the Brexit transition period, the underlying economic logic and much of the risk taxonomy remain closely aligned, which is useful when designing multi-jurisdictional compliance.

Which parts create immediate compliance obligations

Not every element requires action tomorrow, but several do. The clauses that carry immediate obligations are those touching on price and market partitioning:

• Resale price maintenance (RPM). Any contractual or practical obligation on a distributor to sell at, or above, a minimum or fixed price is treated as a hardcore restriction and one of the most serious vertical infringements. This is the highest-priority review item.
• Online sales restrictions. Terms that prevent distributors from effectively using the internet to sell, including outright bans on online selling, are hardcore restrictions and attract close scrutiny.
• Territorial and customer restrictions. Restrictions on passive sales into other territories, or on supplying certain customer groups, generally require careful justification and narrow drafting, and can be hardcore in some configurations.
• Most-favoured-nation (MFN) and parity clauses. Provisions that lock pricing or terms across channels, particularly wide “across-platform” parity clauses, are increasingly viewed as capable of restricting competition.

The practical effect of the 2026 reform environment, in the assessment of many practitioners, is less that the substantive law has transformed and more that the probability and consequences of enforcement have increased. That shifts the compliance calculation decisively toward proactive review of your vertical agreements UK portfolio now.

2. CMA enforcement priorities for 2026, RPM and online marketplaces

Understanding how the CMA is likely to deploy its resources helps commercial teams prioritise. Two themes dominate: resale price maintenance and conduct affecting online marketplaces.

Resale price maintenance: how the CMA treats RPM post-reform

Resale price maintenance remains a serious infringement and a persistent CMA enforcement priority. The regulator has taken action against suppliers who fixed the minimum prices at which their products could be resold, and its published decisions in this area have resulted in financial penalties. The reason RPM is treated so seriously is that it removes the retailer’s freedom to compete on price, potentially harming consumers directly.

The critical distinction for commercial teams is between prohibited price-fixing and permissible pricing guidance. A supplier is generally free to recommend a resale price, or to set a maximum resale price, provided the distributor retains genuine freedom to sell below that level. Problems arise where a recommendation is, in substance, an obligation, for example, where it is backed by threats, withheld supply, financial incentives conditioned on compliance, or systematic monitoring and pressure. Red-flag indicators the CMA looks for include:

• Emails or messages “reminding” distributors to hold prices, or complaining about discounting.
• Supply being delayed or withdrawn from distributors who cut prices.
• Rebates, marketing support or listing benefits made contingent on price adherence.
• Software or manual monitoring used to police resale prices and follow up on deviations.
• Distributors complaining to the supplier about a rival’s low pricing, followed by supplier intervention.

Online marketplaces and platform rules: practical signals

Online marketplaces competition UK issues have become a focal point because e-commerce has multiplied both the volume of resale activity and the ease of monitoring it. Minimum advertised price (MAP) policies, marketplace bans and platform parity clauses all sit in the enforcement spotlight. Suppliers who prohibit distributors from selling on third-party marketplaces, or who impose binding MAP rules that operate as RPM, risk crossing into unlawful territory.

The practical signals suppliers should heed are these: MAP policies must be framed as genuinely non-binding guidance rather than enforced obligations; broad marketplace bans require careful justification and should be approached with caution; and parity or MFN clauses that require a seller to match its lowest price across all channels are high-risk. For businesses managing large distributor networks through digital tools, the very monitoring infrastructure that supports efficient supply-chain management can, if misused, become the evidence of an RPM scheme. Governance of that infrastructure is therefore central to vertical agreements UK compliance in 2026.

3. Do you need to update your distribution or reseller agreements? Practical checklist

The short answer, for most suppliers and distributors, is yes, at least to the extent of a targeted review. Whether that review produces urgent redlines or a lighter refresh depends on what your contracts currently contain. Use the decision flow below.

Immediate vs medium-term updates

Run each of your distribution agreements UK through this binary triage:

1. Does the agreement contain any obligation, incentive or mechanism tied to a minimum or fixed resale price? If yes, this is an immediate update. Remove the obligation, delete the enforcement mechanism and reframe any pricing reference as a genuine recommendation.
2. Does it restrict online sales or ban marketplace selling? If yes, immediate review. Narrow or remove the restriction and preserve the distributor’s online freedom.
3. Does it contain MFN or parity clauses across channels? If yes, medium-term review with legal input to assess objective justification and add a review mechanism.
4. Does it impose territorial or customer restrictions? If yes, medium-term review to ensure any exclusivity is narrow, justified and does not prohibit passive sales.
5. None of the above? Schedule a routine refresh and document that the review took place.

Contract clause checklist for updating distribution contracts

When you open the contract for revision, work systematically through the high-risk clause categories:

• Pricing. Confirm the distributor is free to set its own resale prices. Recast any minimum-price language as a non-binding recommendation.
• MAP / recommended pricing. State expressly that MAP or recommended prices are guidance only, with no sanction for departure.
• MFN / parity. Remove broad cross-channel parity obligations; retain only narrowly justified provisions with a periodic review clause.
• Online sales. Preserve the distributor’s right to sell via its own website and, absent strong justification, via marketplaces.
• Territory and customers. Ensure any exclusivity is limited and does not prevent passive or cross-border online sales.
• Notice and audit rights. Keep audit rights proportionate, with clear scope, reasonable notice and confidentiality protections.

Two short sample redlines illustrate the direction of travel. From the supplier’s side: replace “The Distributor shall not sell the Products below the minimum price notified by the Supplier” with “The Supplier may from time to time recommend resale prices; the Distributor remains entirely free to determine its own resale prices.” From the distributor’s side: insert “Nothing in this Agreement obliges the Distributor to observe any recommended or advertised price, and the Distributor retains full freedom to set prices and choose sales channels, including online marketplaces.” These snippets are illustrative starting points and should be adapted with legal advice to your specific arrangements.

4. Practical compliance steps now, policy, training and monitoring

Contract redlines are necessary but not sufficient. Supplier distributor compliance depends on the behaviour of the people who negotiate, sell and manage relationships day to day. A robust programme wraps policy, training and monitoring around the revised contracts.

Compliance programme checklist

Build the programme around clear ownership and repeatable workflows:

1. Adopt a written pricing and distribution policy that states plainly what staff may and may not do, for example, that they must never require, pressure or incentivise a distributor to hold prices.
2. Establish an approval workflow so that any new pricing initiative, MAP policy or distribution restriction is signed off by legal before launch.
3. Assign an accountable owner, typically in-house counsel or a compliance officer, with authority to halt non-compliant practices.
4. Create template contract language so commercial teams start from compliant clauses rather than drafting from scratch.
5. Maintain a document-management protocol that reinforces careful, accurate internal communications.

Monitoring and escalation

Because enforcement risk often crystallises in informal channels, monitoring is essential:

• Pricing dashboards. Track your own recommended prices separately from any measure of distributor compliance, and never use dashboards to police resale prices.
• E-commerce and marketplace scanning. Where you monitor online listings for legitimate purposes such as brand protection or counterfeit detection, document that legitimate purpose and firewall it from pricing enforcement.
• CRM flags. Configure customer-relationship systems to flag communications that reference distributor pricing, discounting complaints or supply threats, so they can be reviewed.
• Escalation routes. Give staff a clear, confidential channel to raise concerns about potentially unlawful conduct.

Internal investigation playbook

If a concern surfaces, internally or through a CMA contact, a short, disciplined play protects the business:

1. Notify legal immediately and pause any conduct in question.
2. Preserve documents and suspend routine deletion.
3. Scope the issue quickly under legal privilege before drawing conclusions.
4. Assess whether remediation, notification or cooperation is appropriate.
5. Record decisions and rationale contemporaneously.

Embedding these steps into standard operating procedure is one of the most cost-effective ways to reduce CMA enforcement vertical agreements risk across a large network.

5. Draft redlines and sample clauses for vertical agreements UK

This section brings the drafting guidance together. The three snippets below, supplier-focused, distributor-focused and marketplace-seller focused, are short illustrative examples. Treat them as drafting prompts, not off-the-shelf clauses, and have them reviewed by competition counsel before use.

Supplier-focused redlines

The supplier’s objective is to preserve legitimate commercial control, brand standards, quality, recommended pricing, without crossing into RPM or unjustified restraints. A compliant pricing clause reads along these lines: “The Supplier may issue recommended resale prices for guidance only. The Distributor is free at all times to set its own resale prices and no benefit, supply decision or sanction shall be linked to the prices the Distributor charges.” Where the supplier wishes to protect a brand online, tie the language to objective quality criteria applied consistently, not to price.

Distributor-focused redlines

The distributor’s objective is to secure and document its commercial freedom. Useful insertions include an explicit statement of pricing autonomy and channel freedom: “The Distributor retains complete discretion over its resale prices, promotional activity and choice of sales channels, including its own website and third-party online marketplaces. Any recommended or advertised price communicated by the Supplier is non-binding guidance.” Distributors should also seek to limit the scope and frequency of audit rights and require confidentiality and redaction of commercially sensitive data.

Online marketplace seller terms

For sellers operating on platforms, and for suppliers whose products reach consumers via marketplaces, the drafting focus is on avoiding binding price parity and unjustified marketplace bans. Marketplace-facing terms should confirm that any MAP policy is advisory, that enforcement of platform pricing rules follows a transparent and appealable process, and that data accessed through the platform is used for defined, limited purposes rather than resale-price policing.

Comparison table: what to include and what to avoid

The recurring theme across all three perspectives is the separation of legitimate quality and brand controls from anything that fixes or polices resale prices. Bespoke drafting should always account for the parties’ relative market positions, the sector concerned and any objective efficiency justifications available for a given restraint.

6. Remediation, cooperation and risk management in a CMA inquiry

If the CMA opens an inquiry, or makes contact about your distribution practices, the early hours and days matter. The CMA’s investigatory and sanctioning powers derive principally from the Competition Act 1998, as supplemented by later reforms to its powers, and a considered response protects both your legal position and your relationship with the regulator.

Early engagement and cooperation basics

• Engage legal counsel immediately and route all regulator communication through them.
• Preserve all relevant documents and suspend automatic deletion the moment an inquiry is anticipated.
• Protect privilege by conducting factual review under appropriate legal supervision and marking privileged material carefully.
• Consider cooperation. Constructive engagement and, where available, leniency or settlement mechanisms can materially affect the outcome and level of any penalty. Assess this promptly with counsel because timing can be decisive.

Detailed CMA procedures and guidance on investigations and settlements are published by the Competition and Markets Authority, and any response strategy should be built around the current published guidance.

7. Implementation timeline and costs, a project plan

Turning the above into action benefits from a phased plan with clear owners across legal, commercial, sales and IT. The stakeholder map is simple: legal leads the substantive review and sign-off; commercial and sales own template adoption and behavioural change; IT supports monitoring configuration and document retention.

90-day, 6-month and 12-month checklists for vertical agreements UK

• Days 0–30. Inventory all distribution and reseller agreements; triage for RPM, online restrictions and MFN clauses; issue an interim instruction to sales teams to stop any price-policing conduct.
• Days 31–90. Redline and renegotiate the highest-risk contracts; adopt the written pricing and distribution policy; roll out first-round staff training; configure CRM flags and separate legitimate monitoring from pricing enforcement.
• Months 3–6. Complete medium-term contract updates including MFN and territorial clauses; embed the approval workflow; run a compliance audit of communications and marketplace terms.
• Months 6–12. Refresh training; review dashboards and escalation logs; test the internal investigation playbook; document the whole programme so it can be evidenced to the regulator if needed.

Budget and time will vary with network size, but the largest cost is usually senior legal review time in the first 90 days; monitoring tooling and training are comparatively modest and highly cost-effective relative to the penalties a serious infringement can attract.

Conclusion and next steps

Vertical agreements UK compliance in 2026 is a manageable project with an outsized payoff: disciplined contract review, a clear pricing and distribution policy, targeted staff training and well-governed monitoring will substantially reduce your exposure to CMA enforcement. Start with the 90-day triage, remove any resale price maintenance mechanisms and online sales bans first, then work through MFN, territorial and audit provisions on a medium-term horizon. For the wider legislative context, read the UK competition law reform 2026, GLE guide, and use the checklists and redline prompts above as the backbone of your implementation plan.

The practical tip that matters most: separate every legitimate brand or quality control from anything that touches a distributor’s freedom to set its own resale price, and document that you have done so. Businesses that treat vertical agreements UK compliance as an ongoing programme rather than a one-off fix will be best placed as enforcement intensifies.

Sources

1. Competition Act 1998
2. Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022
3. Competition and Markets Authority
4. European Commission, Vertical Block Exemption Regulation
5. Law Society, Competition Conference 2026