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Commission publishes draft new rules governing agreements between competitors

  • United Kingdom
  • Competition, EU and Trade


On 1 March 2022 the European Commission (“Commission”) published drafts of the revised Horizontal Block Exemptions on Research & Development (R&D) and Specialisation Agreements (together known as the “HBERs”) and the accompanying draft revised Horizontal Guidelines.  The Commission has opened a public consultation on its proposed changes until 26 April 2022; ahead of the expiration of the HBERs on 31 December 2022.

The revisions made to the HBERs and Horizon Guidelines are based on the Commission’s findings from a number of evidence gathering exercises including public consultations, targeted consultations, stakeholder/National Competition Authorities discussions and impact assessment support studies.  In this briefing, we outline the main changes.

Use of HBERs and Horizonal Guidelines

Article 101(1) of the Treaty on the functioning of the European Union (“TFEU”) prohibits agreements that restrict competition unless they contribute to improving the production or distribution of goods or promoting technical or economic progress while allowing consumers a fair share of the resulting benefits.  Cooperation agreements between competitors which satisfy the conditions in the HBERs are, however, block exempted, as they allow the companies to share risk, save costs, share knowledge and speed up innovation.

In May 2021, the Commission published a Staff Working document which highlighted the continuing value of the HBERs but also identified issues with the effectiveness, relevance and coherence of the HBERs and Horizontal Guidelines.  In particular that:

  • the Horizontal Guidelines were not adapted for the economic and societal developments of the last 10 years (particularly digitalisation and sustainability);
  • some of the provisions were viewed as too rigid and complex whereas other provisions were unclear and difficult to interpret; and
  • the Horizontal Guidelines provided varying levels of legal certainty based upon the different types of horizontal cooperation agreements covered.

Proposed HBERs revisions

The Commission has proposed a number of very similar changes to both HBERs as outlined below:

  • simplifying the grace period where market shares go above the exemption threshold;
  • adding new definitions and clarifying the wording of existing provisions;
  • calculating market shares either on the average of the preceding calendar year or the average of the last three preceding years;
  • altering the definition of ‘potential competitors’ to take out the reference to small and permanent increase of competitors; and
  • introducing a withdrawal article in the recitals.

In addition, the revised draft Horizontal Guidelines include new sections on both the R&D and Specialisation Agreements Block Exemption Regulations (“BERs”) which are designed to help companies better understand the way that the HBERs operate and the various concepts that they contain.

Specific R&D BER revisions

The Commission’s evaluation process identified issues with the wording of the R&D BER which made the development of new products, technologies and processes for R&D projects with a specific aim difficult. Consequently, the revised R&D BER proposes to no longer exempt such agreements if less than three competing R&D efforts would remain in addition to and comparable with those of the parties to the R&D agreement.

Specific Specialisation BER revisions

When evaluating the Specialisation BER, the Commission found that there was uncertainty around its scope.  As a result, the Commission has proposed the following revisions:

  • expanding the scope of unilateral specialisation agreements to cover more than two parties (currently the agreement can only be between two parties);
  • allowing all horizontal subcontracting agreements (not just those expanding production) to benefit from the safe harbour; and
  • clarifying how the market share threshold applies if the agreement concerns intermediary products.

Furthermore, the draft revised Horizontal Guidelines include specific guidance on network sharing agreements (as a specific illustration of production agreements where services are involved).

Proposed Horizontal Guidelines Revisions

The Commission has proposed a number of changes in the revised Horizontal Guidelines including the following:  

  • Introduction to the Horizontal Guidelines: Restructuring the Horizontal Guidelines for a more logical flow and additional guidance to assist undertakings to enable them to better self-assess their agreements.
  • Joint Purchasing agreements (Chapter 4): Restructuring to help facilitate self-assessments, additional clarification of the type of joint-purchase agreements, expanded guidance on ‘by object’ and ‘by effect’ restrictions and clarification of a ‘potential upstream harm to suppliers’ scenario.
  • Commercialisation agreements (Chapter 5): Additional guidance on the specific rules for agricultural products and on output limitation, clarification guidance on affected markets and anti-competitive effects, and a specific section on bidding consortia.
  • Information exchange (Chapter 6): Restructuring to facilitate self-assessments, additional guidance on the type of information exchange and on the exchanges in the context of acquisitions/exchanges, explicit identification of commercially sensitive information (including recent case law), guidance on relevant concepts for self-assessment and guidance on measures to control how data is used, collected and accessed.
  • Standardisation agreements (Chapters 7 and 8): Discussion of flexibility in the effects analysis (in certain circumstances), disclosure requirements, discussion of standard development agreements providing for the ex-ante disclosure, assessment of whether a proposed licensee fee is FRAND and references to the relevant framework of assessment for licensing negotiation.

Furthermore, the Commission proposes to include a completely new chapter in the Horizontal Guidelines on sustainability agreements.  This provides guidance on how such agreements will be assessed when they fall within the scope of Article 101(1) TFEU, in particular, agreements that set sustainability agreements.

Eversheds Sutherland comment

Companies are often reluctant to collaborate with their competitors in fear of breaching competition law given the significant risks involved.  The Commission’s proposed revisions to the HBERs and Horizontal Guidelines aim to make it easier for competing companies to collaborate, clarify the parameters within which they can do so and make the revised HBERs fit for the present day.  The Commission hopes that the proposed changes will lead to more co-operation with economic and sustainability benefits.

Whilst the new chapter on sustainability and new guidance on data sharing, mobile infrastructure sharing agreements and bidding consortia are welcomed, are the proposed changes sufficient to progress the Commission’s green and digitisation agenda? 

Parties interested in replying to the technical consultation on the drafting of the HBERs and Horizontal Guidelines can do so by 26 April 2022. We are happy to discuss any points of concern for your business, or support you in developing your own position and response to the Commission’s consultation.

For more guidance or information on horizonal agreements and how the proposed changes might impact your business, please get in touch: