Horizontal Agreements Block Exemption

The article 101, paragraph 3 evaluation of the EUTF is carried out by a market analysis that carefully balances the anti-competitive and anti-competitive economic effects of an agreement. Only if the positive effects outweigh the negative effects will a company be able to benefit from an exemption from the prohibition of cartels, despite high market share. In addition to the above articles, these types of agreements and/or practices of horizontal cooperation have been addressed in two Commission regulations, known as “horizontal category exemption regulations”: given the diversity of cooperation agreements in some markets, the EC should consider a much broader category exemption for horizontal cooperation beyond the R and AMP; D and specialization, like the category exemption of vertical restrictions. The new guidelines, which came into force on January 14, 2011 when they were published in the Official Journal, essentially add a chapter on information exchange and make broader recommendations on standard terms in the agreements. Article 101, paragraph 1, of the Treaty on the Functioning of the European Union (`treaty`) prohibits agreements between companies that limit competition, unless they generate efficiencies in accordance with Article 101, paragraph 3, of the Treaty. This occurs when they contribute to the improvement of the production or distribution of goods or services or to the promotion of technical or economic progress and allow consumers to enjoy a fair share of the benefits that flow from them; they only place essential restrictions on achieving these objectives and do not eliminate competition for a substantial part of the product concerned. The prohibition under Article 101, paragraph 1 of the treaty concerns, among other things, agreements between real or potential competitors (“horizontal agreements”). However, to the extent that vertical agreements are concluded between competitors, they must be evaluated in accord with the principles applicable to horizontal agreements. It is therefore part of this consultation.

The new horizontal guidelines revised existing guidelines on the applicability of Article 101 of the TFUE to cooperation agreements and set out a framework for the analysis of the most common forms of horizontal cooperation agreements. While these guidelines are not binding on the courts, they provide valuable insight into the relevant criteria to be considered when self-assessing horizontal agreements. Although these cooperation agreements are in principle considered anti-competitive and therefore prohibited, they may benefit from an exemption under Article 101, paragraph 3, of the Treaty if they meet the following four cumulative conditions: the new BERs came into force on 1 January 2011 and are valid until 31 December 2022. There will be a two-year transition period for agreements that are exempt until December 31, 2012 and that benefit from the exemption until December 31, 2012. Sustainability and digitization are the two most important trends for respondents in terms of the application of horizontal rules. However, joint valuation agreements were also examined. The Commission has introduced additional flexibility by adding joint operating agreements with exclusive licences. Therefore, a scenario in which only one party can manufacture and distribute products subject to the cooperation agreement on the basis of an exclusive license granted by the other parties is now covered.

The Commission did not consider that BER`s specialisation should be fundamentally changed. The most important change is that the new category exemption for specialization specifies that where the products affected by a specialization or joint production agreement are intermediate products that use one or more of the parties in captivity for the manufacture of certain downstream products that they also sell, the exemption is conditional on the fact that it falls within the relevant additional time frame of market share. Essentially, this consultation is aimed at any form of accor

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