The Commission recognises that pooled purchasing agreements can often be pro-competitive, as they allow smaller competitors to obtain purchasing advantages similar to those of larger competitors, which can lead to increased competition, for example in the form of lower prices and/or higher quality products or services. 1. In the European Commission Communication of 24 December 1962[1], commonly known as the Christmas Message, the Commission pointed out that agency contracts are generally not covered by the prohibition laid down in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). However, that privilege applied only if the representative did not engage in any activity specific to an independent trader. The Christmas message states that the crucial criterion for distinguishing an agent from an independent trader is the extent of the agent`s liability for financial risks related to the agent`s performance. This approach to agency contracts was confirmed by the Court of Justice of the European Union (CJEU) in the Suiker Unie case[2], in which the Court ruled that Article 101(1) TFEU does not apply to clauses in an agreement between a representative and a trader only if the representative is to be regarded as a mere auxiliary agent. that are an integral part of the customer`s business. These limited situations, which the Commission believes could be used to justify an agreement on the exchange of information that prima facie infringes Article 101(1), will not always apply (most information exchanged between competitors will not be published) or will not reflect the sole or main reason for the exchange of information (it seems unlikely that: that the strongest competitors want to communicate the reasons for their success to their underperforming competitors in order to catch up with them). Indeed, the Commission`s proposals highlight the difficulties of applying Article 101(3) in this context.
Competitors considering an information exchange agreement are therefore more likely to evade competition concerns by ensuring that their agreement cannot be classified as anti-competitive in the first place than by trying to justify it as consumer-friendly. The relationship between distribution network managers and their distributors is currently the subject of renewed antitrust attention. In the light of both EU and national case-law, certain criteria may be used to determine whether the head of a network must exercise control over his (…) Other agreements between competitors that are not inherently harmful to consumers are valued according to a flexible standard of the “convenience rule” that aims to determine their macroeconomic impact. The focus here is on the nature of the agreement, the damage that could be caused and whether the agreement is reasonably necessary to obtain pro-competitive advantages. Example: Several cartel cases challenged brokerage committee rules that restricted access to multiple listing services (MLS) for advertising homes for sale. The MLS system of combining home listings from many brokers has significant benefits for home buyers and sellers. The first cases invalidated the brokerage`s board membership rules, which excluded certain MLS brokers because access to MLS was seen as the key to marketing homes. More recently, FTC enforcement actions have challenged MLS policies that allow access, but more subtly disadvantage certain types of brokerage contracts that offer consumers a cost-effective alternative to the more traditional full-service listing agreement. For example, some brokers offer a limited service model by listing a home in the local MLS for a fee, while passing on other aspects of the sale to the seller. The FTC has questioned the rules of several MLS organizations that have excluded these brokers from popular home selling websites. These rules limited the ways brokers could run their business and denied home sellers the benefit of various types of offers. There are clear opportunities for legitimate and pro-competitive cooperation between competitors.
However, caution should be exercised as there is a very real risk that cooperation between competitors will infringe Article 101 TFEU and/or be classified as a cartel. All agreements between competitors are likely to raise the following common questions: this quick guide summarises the competition law assessment of cooperation agreements between competitors under EU competition law. On the other hand, a market-powerful producer can potentially use this type of vertical agreement to prevent smaller competitors from succeeding in the market. For example, exclusive decisions may be used to deny a competitor access to retailers or distributors without which the competitor cannot make sufficient sales to be profitable. For example, the FTC found that a pipe fitting manufacturer had unlawfully maintained its monopoly on locally produced ductile fittings by requiring its distributors to purchase domestic pipe fittings exclusively from it and not from its competitors attempting to enter the domestic market. The FTC concluded that this manufacturer`s policy prevented a competitor from making the sales necessary for effective competition. On the supply side, one-time decisions can bind most of the cheapest sources of supply and force competitors to look for more expensive sources. This is the scenario that led to FTC allegations that a large pharmaceutical company violated antitrust laws by obtaining exclusive licenses for an essential ingredient. The FTC claimed that the licenses led to an increase in the cost of ingredients for its competitors, leading to higher retail drug prices. However, agreements limited to joint sales (as opposed to joint sales in the context of cooperation with joint production/specialisation, as described above) are considered to be restrictions of competition within the meaning of Article 101(1) and therefore must always be examined in accordance with Article 101(3). This also applies if the agreement is not exclusive (i.e.
if the parties can sell outside the cooperation), as long as it can be concluded that the agreement leads to overall price coordination. The Commission notes that pricing (i.e., joint sales) can generally only be justified if they are essential to the integration of other marketing functions and this integration will lead to significant efficiency gains. 12. A dual system – combining agency and independent distribution for the same supplier – also makes it difficult to distinguish between investments and costs related to the agency function, including market-specific investments, and those related solely to self-employment. It is therefore difficult to assess whether an agency relationship fulfils the conditions set out in points 12 to 21 of the VBER Guidelines in order to be regarded as genuine and not falling within the scope of Article 101 TFEU. [15] Recital 16(g) of the Guidelines of the Block Exemption Regulation considers that an agreement is generally considered to be a genuine agency contract where the agent “does not carry out any other activities required by the contracting entity in the same product contract, unless those activities are fully reimbursed by the contracting entity”. This provision may apply to cases where the trader requires the quality representative to carry out other activities on the same product market which, by definition, are more limited than the representative`s main task. [16] The Guidelines show that, in most cases, competition concerns are unlikely to arise if the parties have a combined market share not exceeding 15 % in both the purchase market(s) and the sales market(s). This, of course, presupposes that the agreements do not contain any hardcore restrictions. In this context, an agreement between the parties to the joint purchase agreement on the purchase prices to be paid under the agreement is not considered to be a hardcore restriction.
Standardisation agreements are referred to by the Commission in the Guidelines as agreements which `have as their main objective the definition of technical or qualitative requirements which current or future products, production processes, services or methods may satisfy`. .
