Clifford Chance

Market Power and Retail Agreements Under Scrutiny: Lessons from Cabo v MGA

24 September 2025

The recent High Court judgment in Cabo Concepts Limited v MGA Entertainment (UK) Limited reinforces the principle that firms with market power must act with caution when facing competitive threats, as exclusionary or coercive tactics are likely to be deemed abusive. The judgment provides practical guidance on the structuring of distribution agreements, distinguishing between general non-compete obligations and brand-specific restrictions. This clarity will assist in designing commercial arrangements that comply with competition law, particularly as UK courts transition from the EU’s VBER to the UK’s own Vertical Agreements Block Exemption Order (VABEO).

For those entering into vertical agreements, the case highlights the importance of ongoing vigilance to ensure compliance with the evolving UK framework. Cabo v MGA is a timely reminder that while commercial strategies are essential, they must always be balanced against the responsibilities that come with market dominance.

This article was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ in the European Competition Law Review as " Market Power and Retail Agreements Under Scrutiny: Lessons from Cabo v MGA" in (2025) 46 E.C.L.R., Issue 9 pages N-195-N197 and is reproduced by agreement with the publishers.

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