Review Horizontal Cooperation Agreements

Geplaatst door MCautreels op 12 april 2021

Essentially, this consultation covers any form of cooperation agreement between real or potential competitors, known as `horizontal cooperation agreements`, which are, in principle, prohibited by Article 101, paragraph 1, of the Treaty on the Functioning of the European Union (hereafter the Treaty), because they are considered to be agreements between companies that restrict competition. In addition to the above articles, these types of horizontal cooperation agreements and/or practices have been dealt with further in two Commission regulations, known as “horizontal category exemption regulations”: if an agreement does not have a category exemption, it does not necessarily mean that it is illegal. The agreement may continue to benefit from an “individual” exemption under Article 101, paragraph 3 of the EU Treaty (“TFUE”), which provides for a four-point test (see summary here). It is up to the company and its advisors to decide whether the test is completed when challenged by a court or regulator. The HGL serves as a tool to help them in this task. The GLT also contains other guidelines for the application of horizontal class exemptions, which are currently under further review. 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 next planned step in the Commission`s review was a stakeholder workshop in the second quarter of 2020. A similar exercise, aimed at stimulating debate among a large number of stakeholders, took place in Brussels in the fourth quarter of 2019 as part of a new consultation procedure on competition law.

If the blocking conditions do not allow for a physical meeting, I think it is likely (in my opinion) that the Commission will reformulate the workshop as a virtual event. The Commission will be very interested in moving to the impact assessment phase of the review and the entry into force of the revised framework before the expiry of the two BERRs at the end of 2022. The new BER specialisation, Regulation 1218/2010, concerns the applicability of Article 101, paragraph 3, from the TFUE to certain categories of specialisation agreements. Legislation for horizontal agreements. In a joint letter to the European Commission`s Directorate-General for Competition, a group of associations whose members generate EUR 2.200 billion in annual revenues has called for a revision of the guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements (horizontal guidelines) in order to promote a healthy European innovation ecosystem by guaranteeing a balanced framework for the authorisation of SEPS. It is essential that companies and their advisors be able to assess whether a proposed form of cooperation is contrary to competition law. If companies break the law, they could be fined up to 10% of the group`s global turnover, and face unseeded agreements and private actions. On the other hand, legal uncertainty and fear of such effects could be to delay or remove plans or practices that would improve the well-being as a whole. For them, it is essential to have certainties about how the law applies to their projects.