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Summaries of EU Legislation

Guidelines on the application of Article 101(3) TFEU (formerly Article 81(3) TEC)

SUMMARY OF:

Guidelines on the application of Article 81(3) of the Treaty

WHAT IS THE AIM OF THE COMMUNICATION?

  • Article 101 of the Treaty on the Functioning of the European Union (TFEU) (formerly Article 81 of the Treaty establishing the European Community) prohibits trade practices between EU countries which could prevent, restrict or distort competition. The European Commission guidelines recognise, however, that some restrictive agreements could lead to economic benefits that outweigh the negative effects of the restriction of competition.
  • The guidelines set out an interpretation of how exemptions can be determined and provide guidance on how to apply Article 101(3) in individual cases.

KEY POINTS

Article 101(1) TFEU prohibits any agreements between undertakings, decisions made by associations of undertakings, or concerted practices affecting trade between EU countries which could prevent, restrict or distort competition. Article 101(3) acknowledges that some restrictive agreements may generate objective economic benefits that outweigh the negative effects of the restriction of competition, and exempts those agreements from these prohibitions.

Article 101(3) can be applied in individual cases or to categories of agreements and concerted practices through block exemption regulation.

The guidelines focus on individual cases and provides for each of the 4 conditions to satisfy Article 101(3) indications as to how they will be applied.

These 4 conditions are:

  • it must contribute to improving the production or distribution of goods or to promoting technical or economic progress;
  • consumers must receive a fair share of the resulting benefits;
  • the restrictions must be essential to achieving these objectives; and
  • the agreement must not give the parties any possibility of eliminating competition in respect of substantial elements of the products in question.

FROM WHEN DOES THE COMMUNICATION APPLY?

It has applied since .

BACKGROUND

See also:

MAIN DOCUMENT

Communication from the Commission — Notice — Guidelines on the application of Article 81(3) of the Treaty (OJ C 101, , pp. 97-118)

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