New guidelines from the European Commission on de minimis agreements
A communiqué from the European Commission on de minimis agreements exempt from TFEU Art. 101 has been published in the Official Journal of the European Union.
On 25 June 2014 the European Commission announced adoption of the Commission Communication “Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union (De Minimis Notice).” The De Minimis Notice was published in the Official Journal on 30 August 2014 (OJ C 291/1).
The De Minimis Notice follows the existing practice of the Commission and the case law of the European Court of Justice. It is an act of “soft law” pointing out the decisional practice that the Commission should be expected to follow in the case of minor agreements affecting competition, but it is not binding in any way on national competition authorities or courts, for which it only provides guidelines on application of TFEU Art. 101.
The De Minimis Notice involves the Commission’s enforcement of TFEU Art. 101(1), which prohibits agreements between undertakings which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the internal market. However, under ECJ case law, Art. 101(1) does not apply when an agreement does not have an appreciable impact on trade or competition. Following ECJ rulings, the De Minimis Notice indicates how the Commission will define agreements without an appreciable effect on competition, and which will thus not be covered by TFEU Art. 101(1), in terms of the market share of the participants on the relevant market. As in the prior notice, from 2001, the De Minimis Notice identifies two thresholds:
- 10% combined market share in the case of an agreement between actual or potential competitors
- 15% market share of each of the parties in the case of non-competitors (operating on different levels of trade).
Agreements in which the parties fall within these thresholds will generally not be regarded as having an appreciable effect on competition. Accordingly, in such cases the Commission will not begin an antitrust proceeding. In proceedings that have already been commenced, the Commission will not impose a punishment if the parties demonstrate that they believed in good faith that they did not exceed the thresholds set forth in the De Minimis Notice.
Agreements between undertakings exceeding these thresholds for market share will be evaluated individually. In such cases as well, on the basis of other criteria, the analysis may lead to a determination that the agreement does not have an appreciable effect on competition and therefore is not subject to the prohibition set forth in TFEU Art. 101(1).
In the new De Minimis Notice, the Commission finally took the view that it does not cover agreements which have as their object the prevention, restriction or distortion of competition within the internal market—agreements that are prohibited because of their purpose. They are always deemed to have an appreciable effect on competition. The Commission thus adopted the holding of the ECJ in Expedia (Case C-226/11, judgment of 13 December 2012, available at the ECJ website). The Commission also explained that it will not apply the safe harbour created by these market share thresholds to agreements containing any of the restrictions listed as “hardcore” restrictions in a block exemption regulation, which are considered by the Commission to generally constitute restrictions by object.
The De Minimis Notice was published along with an annex, a Commission Staff Working Document entitled “Guidance on restrictions of competition ‘by object’ for the purpose of defining which agreements may benefit from the De Minimis Notice,” which lists and describes examples of agreements that are prohibited because of their intent.
When entering into any agreement with a competitor, supplier or customer, it should always be examined whether the agreement could potentially limit competition. If so, the parties should also evaluate (on their own or with counsel) whether the agreement meets the criteria for having an inappreciable effect on competition or other criteria excluding the prohibition set forth in TFEU Art. 101(1) or the comparable provision of national law, which in Poland is Art. 6 of the Act on Competition and Consumer Protection. It is always worth checking.
Marcin Kulesza, Competition Law Practice, Wardyński & Partners
