Cartels And Horizontal Agreements - European Union Level

Commissions adopts new framework for assessment of horizontal agreements

On 14 December 2010, the European Commission adopted new Horizontal Guidelines, which provide guidance on the assessment of the compatibility with Article 101 TFEU of horizontal cooperation agreements. The revised Guidelines substitute the existing rules, which have been in place for nearly ten years.

General remarks

The new Horizontal Guidelines form part of a broader legislative package which updates the Commission's approach towards the application of Article 101 TFEU to cooperation between competitors. The adoption of the Horizontal Guidelines, a draft of which was previously put out to public consultation, was accompanied by the enactment of two new Block Exemption Regulations (BERs) dealing with specialisation agreements and R&D agreements respectively. The new BERs will replace the existing BERs dealing with specialisation agreements and R&D agreements as of 1 January 2011.

Overall, the modifications introduced in the new Horizontal Guidelines aim at clarifying rather than fundamentally changing the existing regime. It is noteworthy that the content of the new Guidelines has grown considerably compared to the previous version, as a completely new section dealing with exchanges of information has been introduced and other parts concerning specific types of cooperation (e.g., standardisation agreements) provide for a more detailed analysis. The new Guidelines are of particular importance for various types of business activity, as certain types of horizontal cooperation between competitors may bring considerable benefits; at the same time, cooperation between competitors may entail serious risks of infringing antitrust rules.

Specific noteworthy points are summarised below.

A new framework

The first significant change introduced in the recently adopted Guidelines is a new framework for analysis of horizontal agreements, which differs substantially from the approach adopted in the previous Guidelines. The framework of the former Guidelines differentiated between three categories of horizontal agreements: those which do not constitute a restriction of competition within the meaning of Article 101(1) TFEU, those which would almost always fall under that provision, and finally those agreements that may fall within the ambit of Article 101(1) TFEU. However, the new Guidelines no longer apply that distinction. Instead, the new Guidelines follow the wording of Article 101 TFEU, in that they analyze horizontal agreements depending on whether they restrict competition by object or by effect.

This change is likely to have several important implications for the process of self-assessment. First, in contrast to the previous Guidelines, the new Guidelines do not state clearly that Article 101(1) TFEU would not apply to cooperation between non-competitors. Therefore, the revised rules seem to withdraw the benefit of a "safe harbour" which reassured cooperating non-competing businesses of the compatibility of their actions with EU competition law. Second, the distinction between practices restricting competition by object and by effect is still not clear, despite recent developments in the case law on that matter. In particular, it appears that the "object box", which encompasses the most serious restrictions which are by their nature harmful of competition, has not yet been closed. This follows especially from the recent GlaxoSmithKline case, in which the European Court of...