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Home News & Events COMPETITION LAW NEWS: Commission adopts Revised Rules on Horizontal Co-operation Agreements

COMPETITION LAW NEWS: Commission adopts Revised Rules on Horizontal Co-operation Agreements

Tuesday, 15 February 2011 23:07

The European Commission has revised its rules for the assessment of co-operation agreements between competitors, so called horizontal co-operation agreements. Since it is of vital importance for companies to work together to achieve synergies, a large number of horizontal agreements exist in many industries. The texts update and further clarify the application of competition rules in this area so that companies can better assess whether their co-operation agreements are in line with those rules. Revisions mainly concern the areas of standardization, information exchange, and research and development.

Two key features of the reform include a new chapter on information exchange in the Horizontal Guidelines and a substantial revision of the chapter on standardization agreements. The guidelines promote a standard setting system that is open and transparent and therefore increases the transparency of licensing costs for Intellectual Property Rights (IPRs) used in standards. The revised standardization chapter sets out the criteria under which the Commission will not take issue with a standard setting agreement (‘safe harbour’). In addition, the chapter provides detailed guidance on standardization agreements which do not fulfill the safe harbour criteria, thus allowing companies to assess whether they are in line with EU Competition Law.

Information exchange can be pro-competitive, if for example it allows companies to gather market data which allows them to become more efficient and better serve customers. However, one also finds situations where the exchange of market information can be harmful for competition, such as for instance when companies use sensitive information to align their prices. The guidelines provide clear and comprehensive guidance on how to assess the compatibility of information exchanges with EU Competition Law.

The two regulations have entered into force on the 1st of January 2011, with a transitional period of two years, during which the two regulations will remain in force for such agreements that fulfill the conditions of those Regulations, but do not fall under the new regulations.