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Competition: Commission consults on review of rules applicable to horizontal co-operation agreements

European Commission - IP/10/489   04/05/2010

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IP/10/489

Brussels, 4 May 2010

Competition: Commission consults on review of rules applicable to horizontal co-operation agreements

The European Commission has published draft Regulations and Guidelines for the assessment of co-operation agreements between competitors, so called horizontal co-operation agreements. The objective of these proposals is to update and further clarify the application of competition rules in this area and to ensure their continuing relevance in the changing economy of today. Interested parties can submit comments until 25 June 2010. After the public consultation and taking full account of stakeholder input, the Commission will adopt final texts at the end of this year.

Competition Commissioner Joaquin Almunia, Vice-President of the Commission stated: 'Innovation and competitiveness are fundamental to the Commission's Europe 2020 strategy. Efficiency enhancing co-operation agreements between competitors, and in particular R&D and standardisation agreements, can further innovation and competitiveness in Europe. An updated set of rules in this area will ensure that we are facilitating competitor collaboration where it contributes to economic welfare without creating a risk for competition.'

Competition is one of the key tools for achieving a more competitive, connected, greener, knowledge based and inclusive society. Greater prosperity results from innovation and from using resources better, with knowledge as the key input. To make this transformation happen, Europe needs to use a number of tools, including competition to drive companies to innovate and co-operate in efficiency enhancing projects. Competition enforcement can only be effective if its policy instruments and in particular those impacting on horizontal co-operation agreements are kept up to date and brought in line with market developments.

Guidance for the assessment of horizontal co-operation agreements is currently given by way of two 'block exemption' Regulations (Commission Regulation (EC) No. 2659/2000 on research and development (R&D) agreements and Commission Regulation (EC) No. 2658/2000 on specialisation agreements) and the accompanying 'Horizontal Guidelines'. The two Regulations exempt research and development as well as specialisation and joint production agreements from the EU's general ban on restrictive business practices, provided they meet all conditions set out in the Regulations. The Horizontal Guidelines provide an analytical framework for the assessment of the most common types of horizontal co-operation agreements such as research and development agreements, production agreements, purchasing agreement, commercialisation agreements and standardisation agreements.

As the two current Regulations will expire on 31 December 2010, the Commission has started to review the rules applicable to horizontal co-operation agreements in December 2008 with a wide-ranging consultation of European companies and Member States' competition authorities. It showed that the current regime was regarded as working well but that some areas would merit a revision.

To this end, the Horizontal Guidelines have been extensively revised in order to help companies to assess with greater certainty whether or not an agreement is restrictive of competition and, if so, whether it would qualify for an exemption.

A key issue addressed are standard-setting arrangements. Standards are becoming increasingly important in facilitating innovation (in particular in the IT sector) but an efficient, open and transparent standard-setting process is key to ensure effective competition. In particular, the revision of the standardisation chapter – drawing on recent case related experience in the field – aims at ensuring that standards are set in such a way that the specific benefits of standard-setting are realised and passed on to European consumers.

Other main proposals for changes to the existing set of rules include:

In the guidelines:

The inclusion of a chapter on the assessment of information exchange between companies;

Guidance on standard terms in the chapter on standardisation;

Clarification of the application of the competition rules to agreements between joint ventures and their parents.

In the two Regulations:

Disclosure of relevant intellectual property rights and readjustment of the 'hardcore' restrictions (in the R&D block exemption Regulation);

Introduction of a second market share threshold for specialisation and joint production agreements pertaining to products used for internal consumption (in the Specialisation block Exemption Regulation);

Clarifications to the notion of "potential competitor", with the introduction of a three year timeframe for future market entry (in both Regulations).

The revised texts are intended to replace the expiring Regulations and the current version of the Horizontal Guidelines. They are available on the Internet at the following address:

http://ec.europa.eu/competition/consultations/2010_horizontals/index.html

Comments can be addressed to the Commission up to 25th June 2010.

Background

Examples of horizontal co-operation agreements investigated by the Commission include Ship Classification (see IP/09/1513) or IPCom (see IP/09/549).

The adoption of the draft rules applicable to horizontal co-operation agreements follow the adoption of the new competition rules for distribution agreements (see IP/10/445) and precede the adoption of new rules for the car sector which is foreseen for the end of this month.


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