Rules of application and procedure for Articles 81 and 82 of the EC Treaty

1) OBJECTIVE

To ensure the uniform application throughout the common market of Articles 81 and 82 (formerly Articles 85 and 86) of the Treaty and to empower the Commission to address to companies or associations of companies decisions designed to bring any infringements of those Articles to an end.

2) ACT

Council Regulation No 17 (EEC): First Regulation implementing Articles 85 and 86 of the Treaty (at present Articles 81 and 82) [Official Journal No. 013, 21.02.1962]

Comment: Following the entry into force of the Amsterdam Treaty, the articles of the EC Treaty were re-numbered. However, this measure does not apply to the titles of regulations pre-dating the Amsterdam Treaty.

Amended by the following acts:

Council Regulation (EEC) No. 59 of 3 July 1962 [Official Journal No. 058, 10.07.1962];

Council Regulation (EEC) No. 118/63 of 5 November 1963 [Official Journal No. 162, 07.11.1963];

Council Regulation (EEC) No. 2822/71 of 20 December 1971 [Official Journal No. 285, 29.12.1971];

Council Regulation (EC) No. 1216/1999 of 10 June 1999 [Official Journal No. 148, 15.06.1999].

3) SUMMARY

Agreements, decisions, concerted practices imposing appreciable restrictions on competition, and the abuse of a dominant position are prohibited if trade between Member States is substantially affected, with no prior decision to that effect being required.

On application by the companies or associations of companies concerned, the Commission may grant negative clearance certifying that, on the basis of the facts in its possession, there are no grounds under Article 81(1) (formerly Article 85(1)) of the Treaty for action on its part in respect of an agreement, decision or practice.

Agreements, decisions and concerted practices of the kind described in Article 81(1) (formerly Article 85(1)) of the Treaty in respect of which the parties seek application of Article 81(3) (formerly Article 85(3)) (exemption) must be notified to the Commission.

This is not the case where:

• the companies concerned are from one Member State and the agreements, decisions or practices do not relate either to imports or to exports between Member States;
• the agreements or concerted practices are entered into by two or more undertakings, each operating, for the purposes of the agreements, at a different level of the production or distribution chain, and relate to the conditions under which the parties may purchase, sell or resell certain goods or services;
• not more than two undertakings are party to the agreements, and the agreements only impose restrictions on the exercise of the rights of the assignee or user of industrial property rights, or of the person entitled under a contract to the assignment, or grant, of the right to use a method of manufacture or knowledge relating to the use and to the application of industrial processes;
• these agreements have as their sole object the development or uniform application of standards or types, R&D or specialisation in the manufacture of products, where these products do not, in a substantial part of the common market, represent more than 15% of the volume of business done in identical products or those considered to be similar and where the total annual turnover of the participating companies does not exceed 20 million units of account.

A decision in application of Article 81(3) of the Treaty, called an exemption decision, is issued for a specified period. Conditions may be attached to it and it may be renewed on request if the requirements of that Article continue to be satisfied.

The Commission may (retrospectively) revoke or amend its decision or prohibit specified acts by the parties where there has been a change in any of the facts which were basic to the making of the decision, if the parties commit a breach of any obligation attached to the decision, if the decision is based on incorrect information or was induced by deceit or if the parties abuse the exemption from Article 81(1) granted to them by the decision.

The Commission has sole power to declare Article 81(1) inapplicable. As long as it has not initiated any procedure, the authorities of the Member States remain competent to apply that Article.

The Commission transmits to the competent authorities of the Member States a copy of the applications and notifications, together with copies of the most important documents lodged with it, for the purpose of establishing the existence of infringements of Article 81 or 82 or of obtaining negative clearance or a decision in application of Article 81(3). An Advisory Committee comprising officials from the Member States competent in the matter of restrictive practices and monopolies is consulted before any decision is taken.

In carrying out its duties, the Commission may obtain all necessary information from the governments and competent authorities of the Member States and from companies and associations of companies. It makes frequent use of the latter possibility.

The Commission may undertake investigations into companies and associations of companies, during which its officials may examine business records, take copies thereof and ask for oral explanations. Companies are required to submit to investigations ordered by decision.

The Commission may by decision impose fines on companies or associations of companies which:

• supply incorrect or misleading information, fail to supply information within the time limit fixed by a decision or supply incomplete business records;
• infringe Article 81(1) or 82 or commit a breach of any obligation imposed by virtue of a decision pursuant to Article 81(3).

It may also by decision impose periodic penalty payments on companies or associations of companies in order to compel them to:

• put an end to an infringement of Article 81 or 82;
• refrain from any act prohibited by a Commission decision;
• supply complete and correct information which it has requested by decision;
• submit to an investigation which it has ordered by decision.

Before taking decisions, the Commission gives the companies or associations of companies concerned the opportunity of expressing their position on the matters to which it objects. It may also hear other natural or legal persons; applications to be heard by such persons must be granted where sufficient interest can be shown.

Regulation (EEC) No 17/62 was replaced by Regulation (EC) No 1/2003 as of 1 January 2004.

Last updated: 07.07.2005