(1)

Regulation (EEC) No 2821/71 empowers the Commission to apply Article 101(3) of the Treaty on the Functioning of the European Union (*1) by regulation to certain categories of agreements, decisions and concerted practices falling within the scope of Article 101(1) of the Treaty which have as their object specialisation, including agreements necessary for achieving such specialisation.

(2)

Commission Regulation (EC) No 1218/2010 (2) defines categories of specialisation agreements which the Commission regarded as normally satisfying the conditions laid down in Article 101(3) of the Treaty. In view of the overall positive experience with the application of that Regulation, which expires on 31 December 2022, and taking into account the results of the review procedure, it is appropriate to adopt a new block exemption regulation.

(3)

This Regulation should meet the two requirements of (i) ensuring effective protection of competition and (ii) providing adequate legal security for undertakings. The pursuit of those objectives should take account of the need to simplify administrative supervision and the legislative framework to as great an extent as possible.

(4)

Below a certain level of market power it can in general be presumed, for the application of Article 101(3) of the Treaty, that the positive effects of specialisation agreements will outweigh any negative effects on competition.

(5)

For the application of Article 101(3) of the Treaty by regulation, it is not necessary to define those agreements which are capable of falling within Article 101(1) of the Treaty. In the individual assessment of agreements under Article 101(1) of the Treaty, account has to be taken of several factors, and in particular the market structure on the relevant market.

(6)

The benefit of the exemption established by this Regulation should be limited to those agreements for which it can be assumed with sufficient certainty that they satisfy the conditions of Article 101(3) of the Treaty.

(7)

Specialisation agreements are most likely to contribute to improving the manufacture of goods or the preparation of services or their distribution, if the parties have complementary skills, assets or activities, because they can concentrate on the manufacture of those goods or the preparation of those services and thus operate more efficiently and supply the products more cheaply. Given effective competition, it is likely that consumers will receive a fair share of the resulting benefits.

(8)

Such advantages can arise from: (a) agreements whereby a party or parties fully or partly gives up the manufacture of certain goods or the preparation of certain services in favour of another party or parties (‘unilateral specialisation’); (b) agreements whereby each party fully or partly gives up the manufacture of certain but different goods or the preparation of certain services in favour of another party or parties (‘reciprocal specialisation’) and (c) agreements whereby two or more parties undertake to jointly manufacture certain goods or prepare certain services (‘joint production’).

(9)

The application of this Regulation to services concerns the preparation of services (as opposed to the provision of services). The preparation of services refers to activities upstream of the provision of services to customers (for example, cooperation in the creation of a platform through which a service will be provided). The provision of services falls outside the scope of this Regulation, except in the context of distribution in which the parties provide the services prepared and the products manufactured under the specialisation agreement.

(10)

The application of this Regulation to unilateral and reciprocal specialisation agreements should be limited to scenarios where the parties are active on the same product market. However, it is not necessary for the parties to be active on the same geographic market. In addition, the concepts of unilateral and reciprocal specialisation do not require a party to reduce capacity, as it is sufficient if they reduce their production volumes.

(11)

To ensure that the benefits of specialisation will materialise without one party leaving the market downstream of production entirely, unilateral and reciprocal specialisation agreements should only be covered by this Regulation where they provide for supply and purchase obligations. Supply and purchase obligations may, but do not have to, be of an exclusive nature.

(12)

This Regulation applies to joint production agreements entered into by parties who are already active on the same product market but also by parties who wish to enter a product market by way of the joint production agreement. In addition, the concept of joint production agreement does not require the parties to reduce their individual activities regarding the manufacture of goods or preparation of services outside the scope of their envisaged joint arrangement.

(13)

It can be presumed that, where the parties’ share of the relevant market for the products which are the subject matter of a specialisation agreement does not exceed a certain level, the agreements will, as a general rule, give rise to economic benefits in the form of economies of scale or scope or better production technologies, while allowing consumers a fair share of the resulting benefits.

(14)

Where the products covered by a specialisation agreement are intermediary products which one or more of the parties fully or partly use as an input for their own downstream products which they subsequently sell on the market, the exemption conferred by this Regulation should also be conditional on the parties’ share on the relevant market for these downstream products not exceeding a certain level. In such a case, merely looking at the parties’ market share at the level of the intermediary product would ignore the potential risk of foreclosing or increasing the price of inputs for competitors at the level of the downstream products.

(15)

There is no presumption that specialisation agreements are either caught by Article 101(1) of the Treaty or that they fail to satisfy the conditions of Article 101(3) of the Treaty once the market share threshold set out in this Regulation is exceeded or other conditions of this Regulation are not met. In such cases, an individual assessment of the specialisation agreement needs to be conducted under Article 101 of the Treaty.

(16)

This Regulation should not exempt agreements containing restrictions which are not indispensable to the attainment of the positive effects generated by a specialisation agreement. In principle, agreements containing certain types of severe restrictions of competition relating to the fixing of prices charged to third parties, limitation of output or sales, and allocation of markets or customers should be excluded from the benefit of the exemption established by this Regulation irrespective of the market share of the parties.

(17)

The market share limitation, the non-exemption of certain agreements and the conditions provided for in this Regulation normally ensure that the agreements to which the block exemption applies do not enable the parties to eliminate competition in respect of a substantial part of the products or services in question.

(18)

The benefit of this Regulation may be withdrawn pursuant to Article 29 of Council Regulation (EC) No 1/2003 (3).

(19)

In order to facilitate the conclusion of specialisation agreements, which can have a bearing on the structure of the parties, the period of validity of this Regulation should be fixed at 12 years.