Specialisation Agreements Block Exemption

In December 2010, the European Commission published updated guidelines on the application of Article 101 to horizontal cooperation agreements (Guidelines).1 At the same time, revised block exemption regulations were adopted, providing for an automatic exemption under Article 101(3) for certain types of specialisation agreements2 and “research and development agreements”3. The parties to a specialisation or production agreement must give consumers an appropriate share of the benefits resulting from the efficiency gains observed (e.g. B by lower prices, higher product quality or greater product diversity). In other words, efficiency gains that only benefit the parties are not sufficient to justify cooperation between competitors. As a general rule, the higher the common market share and hence the market power of the parties, the less likely it is that a fair share of the benefit will be passed on to consumers. For the application of Article 101(3) of the EC Treaty by means of a regulation, it is not necessary to define the agreements which may be covered by Article 101(1) of the Treaty. The individual assessment of the agreements referred to in Article 101(1) TFEU must take into account several factors, in particular the structure of the relevant market. Market share shall be calculated on the basis of the sales value of the market or, if such data are not available, estimates may be used on the basis of other reliable market information to determine the market share of the parties. If, after a certain period of time, the market share exceeds the 20% threshold but remains below 25%, the exemption is valid for two years. However, if the market share exceeds 25%, the exemption will only apply for the following year. `horizontal cooperation` means an agreement or understanding between undertakings operating at the same level of the supply chain, i.e. actual (or potential) competitors, for example. B a joint R&D project of competing technology companies or a sales and marketing joint venture between competitors.

In contrast, “vertical” agreements are agreements between companies operating at different levels of the supply chain, for example. B a supply contract from a supplier of raw materials to a manufacturer or a distribution agreement between a producer and a retailer4 If the provisions relating to the duration of the exemption are complex, the exemption applies in practice as long as the parties` combined market share remains below 25%. If the market share is greater than 25%, the exemption shall apply for a further two years after the year in which the threshold was exceeded. If the market share exceeds 30%, the exemption is only valid for another year. BER specialisation strikes a balance between the Commission`s desire to ensure effective competition; and (ii) to provide companies with regulatory certainty – through “safe ports” – with regard to joint specialisation and production agreements, which are considered in net terms to promote competition. While overtaking the safe harbor is certainly not the alpha and omega of the case in assessing compliance with a particular agreement under competition law, many companies will consider that a certain degree of regulatory certainty is particularly important, given that non-compliant joint specialisation or production agreements are likely to result in allegations of antitrust behaviour for participants. The new guidelines, which entered into force on 14 January 2011 with their publication in the Official Journal, essentially add a chapter on the exchange of information and introduce expanded guidance on standard conditions in agreements. . . .