Brussels, 14 December 2010
Competition: Commission adopts revised competition rules on horizontal co-operation agreements
The European Commission has revised its rules for the assessment of co-operation agreements between competitors, so called horizontal co-operation agreements. As it is often vital for companies to work together to achieve synergies, there exist a vast number of horizontal co-operation agreements in many industries. The texts update and further clarify the application of competition rules in this area so that companies can better assess whether their co-operation agreements are in line with those rules. Modifications concern mainly the areas of standardisation, information exchange, and research and development (R&D).
Commission Vice President in charge of competition policy Joaquín Almunia stated: 'One of the overarching goals of the new rules is to contribute to the Commission's Europe 2020 strategy, in particular by promoting innovation and competitiveness. The new Guidelines and Block Exemption Regulations will give companies the necessary freedom to co-operate in a globalised market place, while at the same time minimising the risk of agreements that are harmful to industry and to consumers.'
Today the Commission has adopted a revised set of Guidelines and two Regulations which describe how competitors can co-operate without infringing EU competition rules. The 'Horizontal Guidelines' provide a framework for the analysis of the most common forms of horizontal co-operation such as agreements in the areas of R&D, production, purchasing, commercialisation, standardisation, standard terms, and information exchange. The two Regulations exempt from the competition rules certain R&D, specialisation and production agreements that are unlikely to raise competition concerns.
Two key features of the reform are a new chapter on information exchange in the Horizontal Guidelines and a substantial revision of the chapter on standardisation agreements.
The Guidelines promote a standard-setting system that is open and transparent and thereby increases the transparency of licensing costs for intellectual property rights (IPRs) used in standards. The revised standardisation chapter sets out the criteria under which the Commission will not take issue with a standard-setting agreement ('safe harbour'). Moreover, the chapter gives detailed guidance on standardisation agreements that do not fulfil the safe harbour criteria, to allow companies to assess whether they are in line with EU competition law.
Standard-setting organisations may wish to provide for their members to unilaterally disclose, prior to setting a standard, the maximum rate that they would charge for their intellectual property rights (IPRs) if those were to be included in a standard. Such a system could enable a standard-setting organisation and the industry to take an informed choice on quality and price when selecting which technology should be included in a standard. The revised rules clarify that such a system would normally not infringe EU competition rules.
Information exchange can be pro-competitive, for example, when it enables companies to gather market data that allow them to become more efficient and better serve customers. However, there are also situations where the exchange of market information can be harmful for competition, for instance when companies use sensitive information to align their prices. The Guidelines give clear and comprehensive guidance on how to assess the compatibility of information exchanges with EU competition law.
With a view to facilitating innovation in Europe, the Commission has considerably extended the scope of the R&D Block Exemption Regulation, which now not only covers R&D activities carried out jointly but also so-called 'paid-for research" agreements where one party finances the R&D activities carried out by the other party. In addition, the new Regulation gives parties more scope to jointly exploit the R&D results.
The Horizontal Guidelines will enter into force as soon as they have been published in the Official Journal of the EU, which should take place in the coming days. The two Regulations will enter into force on 1 January 2011, with a transitional period of two years, during which the previous Regulations will remain in force for such agreements that fulfil the conditions of those Regulations but do not fall under the new Regulations.
The issue of 'patent ambush' was investigated by the Commission in Rambus (see IP/09/1897).
The new rules replace the previous Horizontal Guidelines and the two Block Exemption Regulations for R&D and for specialisation and joint production agreements, which entered into force in 2001.
Drafts of the new rules were published in May 2010 for public consultation. Feedback from stakeholders was generally positive. Subsequently, the drafts were revised to take account of stakeholder comments.
The new Horizontal Guidelines and Regulations can be found at:
For further details, please see Q&A MEMO/10/676.