On 6 May 2021, the European Commission (“Commission”) published a staff working document (“SWD”) on its evaluation of the horizontal block exemption regulations on research & development and specialisation agreements (“H-BERs”) and the horizontal guidelines. The SWD is accompanied by an evaluation study, commissioned to provide qualitative and quantitative evidence to support the Commission’s evaluation.
The findings show that while the H-BERs and Horizontal Guidelines have been valuable tools for businesses, they need to be revised in order to address a few important areas where they are not fit for purpose, including to give guidance on collaborations pursuing sustainability goals and new cooperation models that have appeared as a result of digitalisation. Some provisions of the H-BERs and the Horizontal Guidelines are considered unclear, overly strict and difficult to interpret. This applies in particular to the research & development block exemption and provisions in the Horizontal Guidelines on information exchange, R&D, production and commercialisation agreements.
The SWD does not indicate the policy options that the Commission is considering and specifically does not say whether companies will gain more leeway under the H-BERs in the future. In the coming weeks, the Commission will publish its inception impact assessment on possible revisions that should provide greater insight into the potential options on the table.
The Horizontal Block Exemptions and Horizontal Guidelines
Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) captures any form of co-operation agreement concluded between actual or potential competitors that have the object or effect of restricting competition.
Horizontal cooperation agreements are agreements entered into between companies operating at the same level in the market.
Horizontal co-operation agreements can lead to significant economic benefits, in particular where competitors combine complementary activities, skills or assets, thereby sharing risk, saving costs, enhancing product quality and variety, and innovating more and better. Such potentially pro-competitive horizontal co-operations include research and development (R&D) agreements, production agreements, purchasing agreements, commercialisation agreements, standardisation agreements, joint venture arrangements and “pure'” information exchanges.
Two Commission Regulations block exempt certain types of co-operation agreements from Article 101(1) TFEU, namely Commission Regulation (EU) 1217/2010 for research and development agreements (R&D BER), and Commission Regulation (EU) 1218/2010 for specialisation agreements (Specialisation BER; together referred to as Horizontal Block Exemption Regulations or H-BERs). To complement the H-BERs, which are binding law in the EU, subject to final interpretation by the EU Courts, the Commission issued guidelines on the applicability of Article 101 of the TFEU to horizontal co-operation agreements (Horizontal Guidelines), which help analyse the competitive effects and benefits of these and other types of co-operation, and provide the Commission’s views on some additional “safe harbours”. The Horizontal Guidelines are binding on the Commission, but do not bind national competition authorities or national courts (although they typically take them into account), and are without prejudice to judgments of the EU Courts.
Review of the Block Exemptions
The two H-BERs, which came into force in 2011, are due to expire on 31 December 2022.
The Commission has conducted the following review of the H-BERs and Horizontal Guidelines.
|19 July 2019||Start of evaluation|
|6 November 2019||Launch of public consultation|
|30 March 2020||Publication of responses to public consultation|
|7 April 2020||Publication of summary report of public consultation|
|October 2020||Launch of public consultation on how competition policy can support European Green Deal|
|6 May 2021||Staff Working Document and Evaluation Study published|
Key findings of the Staff Working Document
The Staff Working Document responds to feedback that the Commission has received in consultations to date, and concludes that the H-BERs and the Horizontal Guidelines are useful instruments and remain relevant for stakeholders, but that they require revision in certain areas.
The key feedback identified by the Commission includes:
|Agreements on commercialisation||
|Data pooling, data sharing, network sharing agreements||
In the coming weeks, the Commission should publish its inception impact assessment, which will set out more concretely the policy options for a revision of the rules, and stakeholders will be given the opportunity to provide comments. The Commission is currently intending to publish a draft of the revised rules for stakeholder comments at the start of 2022, with a view to having the new rules and guidance in place before the end of 2022.
The blogpost was first published here.
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