—

research and development agreements, including guidance on the application of Commission Regulation (EU) No […] of […] December 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to certain categories of research and development agreements (hereinafter referred to as ‘R&D BER’) (Chapter 2),

—

production agreements including guidance on the application of Commission Regulation (EU) No […] of […] December 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to certain categories of specialisation agreements (hereinafter referred to as ‘Specialisation BER’) (Chapter 3),

—

purchasing agreements (Chapter 4),

—

commercialisation agreements (Chapter 5),

—

information exchange (Chapter 6),

—

standardisation agreements (Chapter 7),

—

standard terms (Chapter 8).

—

the centre of gravity of a horizontal cooperation agreement involving both joint R&D and joint production of the results would be the joint R&D if the joint production will only take place if the joint R&D is successful. This means that the results of the joint R&D are decisive for the subsequent joint production. The guidance in the Chapter on R&D agreements prevails in this case. The outcome of the assessment of the centre of gravity would be different if the parties would have engaged in the joint production in any event, that is to say, irrespective of the joint R&D. This means that such agreements should instead be assessed as joint production agreements and the guidance in the Chapter on production agreements prevails. If the agreement provides for a full integration in the area of production and only a partial integration of some R&D activities, the centre of gravity of the cooperation would also be the joint production;

—

similarly, the centre of gravity of a horizontal cooperation agreement involving both specialisation and joint commercialisation of the results, would normally be the specialisation, as the joint commercialisation will only take place because of the cooperation in the specialisation activity;

—

the centre of gravity of a horizontal cooperation agreement involving joint production and joint commercialisation of the products, would normally be the joint production, as the joint commercialisation generally will only take place because of the cooperation in the main activity of joint production.

—

The first Chapter is an introduction, that sets out the context in which Article 101 applies to horizontal cooperation agreements. This Chapter also provides information on the relationship between these Guidelines and other legislation and guidance affecting horizontal cooperation agreements.

—

In Chapters 2 to 8, guidance is provided to facilitate the self-assessment under Article 101 for the most common horizontal cooperation agreements. Chapter 9 provides additional guidance in case these agreements pursue sustainability objectives. The guidance in Chapters 2 to 9 complements the more general guidance given in this introduction. It is therefore recommended to always read the introduction first and then refer to the specific chapters.

—

between the parents to create the joint venture;

—

between the parents to alter the scope of the joint venture;

—

between the parents and the joint venture outside the product and geographic scope of the activity of the joint venture; and

—

between the parents without involvement of the joint venture, even concerning the relevant market where the joint venture is active.

—

the parties to the agreement have high market shares;

—

they are actual or potential competitors;

—

the customers have sufficient possibilities of switching suppliers;

—

competitors are likely to increase supply if prices increase, and

—

one of the parties to the agreement is an important competitive force.

—

the parties to the agreement have high market shares;

—

they are actual or potential competitors;

—

the market characteristics are conducive to coordination;

—

the area of cooperation accounts for a high proportion of the parties’ variable costs in a given market; and

—

the parties combine their activities in the area of cooperation to a significant extent. This could, for instance, be the case, where they jointly manufacture or purchase an important intermediate product or jointly manufacture or distribute a high proportion of their total output of a final product.

—

the content of the agreement,

—

the objectives it seeks to attain,

—

the economic and legal context of which it forms part.

—

the nature of the goods or services affected,

—

the real conditions of the functioning and structure of the market or markets in question (29).

—

The nature and content of the agreement;

—

the actual context in which the cooperation occurs, in particular the economic and legal context in which the undertakings concerned operate, the nature of the goods or services affected, as well as the real conditions of the functioning and the structure of the market or markets in question (34);

—

the extent to which the parties individually or jointly have or obtain some degree of market power and the extent to which the agreement contributes to the creation, maintenance or strengthening of that market power or allows the parties to exploit such market power (35);

—

the restrictive effects on competition may be actual and potential, but they must, in any event, be sufficiently appreciable (36).

—

the agreement must contribute to improving the production or distribution of products or contribute to promoting technical or economic progress, that is to say, lead to efficiency gains;

—

the restrictions must be indispensable to the attainment of those objectives, that is to say, the efficiency gains;

—

consumers must receive a fair share of the resulting benefits, that is to say, the efficiency gains, including qualitative efficiency gains, attained by the indispensable restrictions must be sufficiently passed on to consumers so that they are at least compensated for the restrictive effects of the agreement. Hence, efficiencies only accruing to the parties to the agreement will not suffice. For the purposes of these Guidelines, the concept of ‘consumers’ encompasses the customers, potential and/or actual, of the parties to the agreement (44); and

—

the agreement must not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question.

—

the aggregate market share of the parties on any relevant market within the Union affected by the agreement does not exceed 5 %, and

—

the aggregate annual Union turnover of the undertakings concerned in the products covered by the agreement does not exceed EUR 40 million (49).

—

In the case of agreements concerning the joint buying of products, the relevant turnover shall be the parties’ combined purchases of the products covered by the agreement. The Commission may rebut the presumption if an analysis of the characteristics of the agreement and its economic context demonstrates the contrary.

(a)

joint R&D of contract products or contract technologies which includes or excludes joint exploitation of the results of that R&D; or

(b)

paid-for R&D of contract products or contract technologies which includes or excludes joint exploitation of the results of that R&D; or

(c)

joint exploitation of the results of R&D of contract products or contract technologies carried out pursuant to a prior agreement pursuing joint R&D (as defined in point (a) above) between the same parties; or

(d)

joint exploitation of the results of R&D of contract products or contract technologies carried out pursuant to a prior agreement pursuing paid-for R&D (as defined in point (b) above) between the same parties.

(a)

‘contract product’ (84) means a product (85) arising out of the joint or paid-for R&D or produced or provided applying the contract technologies. This includes products obtained through an R&D pole as well as new products (86);

(b)

‘contract technology’ (87) means a technology or process arising out of the joint or paid-for R&D. This includes technologies or processes obtained through an R&D pole as well as new technologies or processes.

(a)

the R&D activities are carried out by a joint team, organisation or undertaking;

(b)

the parties jointly entrust a third party with the R&D activities; or

(c)

the parties allocate the activities between them by way of ‘specialisation in the context of R&D’. This means that each of the parties is involved in the R&D activities and they divide the R&D work between them in any way that they consider most appropriate. This does not include paid-for R&D (89).

(a)

indispensable for the production of the contract products or the application of the contract technologies; and

(b)

protected by intellectual property rights or constitute know-how.

(a)

First, the exploitation can be carried out together by the parties in a joint team, a joint organisation or a joint undertaking;

(b)

Second, the parties can jointly entrust a third party with the exploitation work;

(c)

Lastly, the parties can allocate the work between them by way of specialisation in the context of exploitation which means that (93):

(a)

for conducting further research; and

(b)

for exploiting the results of the R&D.

(a)

research institutes;

(b)

academic bodies; or

(c)

undertakings which supply R&D as a commercial service without normally being active in the exploitation of the results (105).

(a)

‘actual competitor’ is defined as an undertaking that is supplying an existing product or technology capable of being improved, substituted or replaced by the contract product or the contract technology on the relevant geographic market; whereas

(b)

‘potential competitor’ is defined as an undertaking that, in the absence of the R&D agreement, on realistic grounds and not just as a mere theoretical possibility would be likely to undertake, within not more than 3 years, the necessary additional investments or incur the necessary costs to supply a product or technology capable of being improved, substituted or replaced by the contract product or contract technology on the relevant geographic market.

(a)

An R&D agreement between two undertakings that already supply an existing product capable of being improved, substituted or replaced by the product arising from the R&D cooperation (actual competitors);

(b)

An R&D agreement between (a) an undertaking that already supplies a product capable of being improved, substituted or replaced by the contract product (an actual competitor) and (b) an undertaking conducting R&D into a product and that would be likely to undertake the necessary additional investments to supply that product capable of being improved, substituted or replaced by the product arising from the R&D cooperation (contract product) on the relevant geographic market (potential competitor).

(a)

R&D of the same or likely substitutable new products and/or technologies as the one(s) covered by the R&D agreement; or

(b)

R&D poles pursuing substantially the same aim or objective as the one(s) to be covered by the R&D agreement.

(a)

an R&D agreement between (a) an undertaking developing a new product and (b) an undertaking developing the same or a likely substitute of such new product;

(b)

an R&D agreement between (a) an undertaking developing a new product and (b) an undertaking able and likely to independently engage (but not yet engaged) in the R&D of the same or a likely substitute of such new product;

(c)

an R&D agreement between (a) an undertaking engaged in an R&D effort which concerns an R&D pole and (b) an undertaking engaged in an R&D pole pursuing substantially the same aim or objective;

(d)

an R&D agreement between (a) an undertaking engaged in an R&D pole; and (b) an undertaking able and likely to independently engage (but not yet engaged) in an R&D pole pursuing substantially the same aim or objective.

(a)

for R&D agreements involving joint R&D, the combined market share of the parties to the agreement shall not exceed 25 % on the relevant product and technology markets (117);

(b)

for R&D agreements involving paid-for R&D, the same market share threshold of 25 % applies but is extended not only to the financing party itself, but must also include all the parties with which the financing party has entered into R&D agreements with regard to the same contract products or contract technologies (118).

(a)

whether the R&D efforts concern R&D of the same or likely substitutable new products and/or technologies or R&D poles pursuing substantially the same aim or objective as the ones to be covered by the R&D agreement;

(b)

whether there are third parties already engaged in the R&D efforts or able and likely to independently engage in such efforts; and

(c)

whether those third parties are independent from the parties to the R&D agreement.

(a)

in a field unconnected with that to which the R&D agreement relates, or

(b)

in the field to which the R&D agreement relates or in a connected field after the completion of the R&D.

(a)

actively targeting customers by visits, letters, emails, calls or other means of direct communication or through targeted advertising or promotion, offline or online, for instance by means of print or digital media, including online media, price comparison tools or advertising on search engines targeting customers in specific territories or customer groups;

(b)

offering on a website language options different than the ones commonly used on the territory in which the distributor is established;

(c)

offering a website with a domain name corresponding to a territory other than the one in which the distributor is established.

(a)

after completion of the R&D for intellectual property rights which are relevant to the R&D; or

(b)

after the expiry of the R&D agreement for intellectual property rights which protect the results of the R&D (148).

(a)

the existence of an R&D agreement substantially restricts the scope for third parties to carry out R&D in the field(s) of the contract products, contract technologies or R&D poles; his could be due, for example, to the limited available research capacity;

(b)

the existence of the R&D agreement substantially restricts the access of third parties to the market for the contract products or contract technologies; his could be due, for example, to the particular structure of supply;

(c)

the parties do not exploit the results of the joint or paid-for R&D vis-à-vis third parties without any objectively valid reason;

(d)

the contract products or contract technologies are not subject in the whole or a substantial part of the internal market to effective competition from products or technologies considered by users as equivalent in view of their characteristics, price and intended use.

(a)

first, the assessment will focus on whether the specialisation agreement can benefit from the exemption of the Specialisation BER;

(b)

second, if the agreements falls outside the scope of the Specialisation BER, an individual assessment of the agreement would be necessary to determine whether the specialisation agreement fulfils the conditions of Article 101(3).

(a)

A direct limitation of competition between the parties;

(b)

The coordination of the parties’ competitive behaviour as suppliers; or

(c)

An anti-competitive foreclosure of third parties in a related market.

(a)

the parties having market power; and

(b)

the existence of market characteristics conducive to such coordination, in particular:

(a)

the parties agree on the output directly concerned by the production agreement (for example, the capacity and production volume of a joint venture or the agreed amount of outsourced products), provided that the other parameters of competition (for example, prices) are not eliminated; or

(b)

a production agreement that also provides for the joint distribution of the jointly manufactured products envisages the joint setting of the sales prices for those products, and only those products, provided that the restriction is necessary for producing jointly, meaning that the parties would not otherwise have an incentive to enter into the production agreement in the first place.

(a)

the characteristics of the market in which the agreement takes place;

(b)

the nature of the cooperation;

(c)

the market coverage of the cooperation; and

(d)

the products concerned by the cooperation.

(a)

The parties to a production joint venture could, for instance, limit the output of the joint venture compared to what the parties would have brought to the market if each of them had decided their output on their own.

(b)

If the main product characteristics are determined by the production agreement this could also eliminate key dimensions of competition between the parties and, ultimately, lead to restrictive effects on competition.

(c)

A joint venture charging a high transfer price to the parties to the production agreement would increase the input costs for the parties, which could lead to higher downstream prices. Competitors may find it profitable to increase their prices as a response, thereby contributing to price increases in the relevant market.

(a)

A scenario where commonality of costs can lead to a collusive outcome could be where the parties agree on the joint production of an intermediate product which accounts for a large proportion of the variable costs of the final product with respect to which the parties compete downstream. The parties could use the production agreement to increase the price of that common important input for their products in the downstream market. This would weaken competition downstream and would be likely to lead to higher final prices. The profit would be shifted from downstream to upstream to be then shared between the parties through the joint venture.

(b)

Similarly, commonality of costs increases the anti-competitive foreclosure risks of a horizontal subcontracting agreement where the input which the contractor purchases from the subcontractor accounts for a large proportion of the variable costs of the final product with which the parties compete.

(a)

They involve two or more parties; and

(b)

The parties to the agreements are already active on the same product market; and

(c)

The agreement concerns the same products; and

(d)

A party or parties agree to fully or partly cease or refrain from producing certain products and purchase them from the other party or parties; and

(e)

A different party or parties agree to produce and supply those products to the other party or parties that cease or refrain from producing them.

(a)

They involve two or more parties; and

(b)

The parties to the agreements are already active on the same product market; and

(c)

The agreement concerns different products; and

(d)

Two or more parties, on a reciprocal basis, fully or partly agree to cease or refrain from producing certain but different products and to purchase these products from the other parties; and

(e)

Such other parties agree to produce and supply those products to the parties that cease or refrain from producing them.

(a)

They involve two or more parties; and

(b)

The parties produce certain products jointly (see Section 3.4.3).

(a)

They do not constitute the primary object of the specialisation agreement; and

(b)

They are directly related to and necessary for the implementation of such agreement.

(a)

An exclusive supply obligation, as defined in Article 1 paragraph 1(j) of the Specialisation BER, means an obligation not to supply the specialisation products (as defined in Article 1 paragraph 1(c) of the Specialisation BER) to a competing undertaking other than a party or parties to the agreement. Therefore, an exclusive supply obligation does not prevent the parties from supplying the specialisation products to third parties that are not competing undertakings.

(b)

An exclusive purchase obligation, as defined in Article 1 paragraph 1(k) of the Specialisation BER, means an obligation to purchase the specialisation products only from a party or parties to the agreement.

(a)

Distribution is carried out by a joint team, organisation or undertaking, or

(b)

Distribution is undertaken by a third party distributor that meets three cumulative conditions:

(a)

The parties’ combined market share does not exceed 20 % in the relevant market or markets concerned by the specialisation agreement, provided that the other conditions for exemption under the Specialisation BER are fulfilled.

(b)

When the specialisation products are intermediary products and one or more of the parties fully or partly use those products captively for the production of certain downstream products, which the parties also sell, the exemption of the Specialisation BER is conditional upon:

(a)

the power to, directly or indirectly, exercise more than half the voting rights,

(b)

the power to, directly or indirectly, appoint more than half the members of the supervisory board, board of management or bodies legally representing the undertaking, or

(c)

the right to, directly or indirectly, manage the undertaking’s affairs.

(a)

the fixing of prices when selling the specialisation products to third parties;

(b)

the limitation of output or sales; and

(c)

the allocation of markets or customers.

(a)

Fixing of prices: in the context of joint distribution, the Specialisation BER allows the fixing of prices charged to immediate customers (Article 5 paragraph 1, second paragraph).

(b)

Limitation of output or sales:

(a)

the relevant market is very concentrated, and

(b)

competition is already weak, in particular because of (i) the individual market positions of other market participants or (ii) the links between other market participants created by parallel specialisation agreements.

(a)

enabling undertakings to save costs that otherwise they would duplicate;

(b)

helping undertakings to improve product quality if they put together their complementary skills and know-how;

(c)

enabling undertakings to increase product variety, which they could not have afforded, or would not have been able to achieve, otherwise;

(d)

enabling undertakings to improve production technologies or launch new products (such as sustainable products), which they would otherwise not have been able to do (for example, due to the parties’ technical capabilities);

(e)

incentivising and enabling undertakings to adapt their production capacities to a sudden surge in demand or drop in supply of certain products, leading to a risk of shortages;

(f)

addressing shortages and disruptions in the supply chain in critical sectors of the economy, allowing the parties to reduce dependencies on a too limited number of suppliers of certain products, services and technologies;