Notice on agreements of minor importance which do not fall within the meaning of Article 85 (1) of the Treaty establishing the European Community (97/C 372/04)

(Text with EEA relevance)

I.

1. The Commission considers it important to facilitate cooperation between undertakings where such cooperation is economically desirable without presenting difficulties from the point of view of competition policy. To this end, it published the notice concerning agreements, decisions and concerted practices in the field of cooperation between enterprises (1) listing a number of agreements that by their nature cannot be regarded as being in restraint of competition. Furthermore, in the notice concerning its assessment of certain subcontracting agreements (2) the Commission considered that that type of contract, which offers all undertakings opportunities for development, does not automatically fall within the scope of Article 85 (1). The notice concerning the assessment of cooperative joint ventures pursuant to Article 85 of the EC Treaty (3) describes in detail the conditions under which the agreements in question do not fall under the prohibition of restrictive agreements. By issuing this notice which replaces the Commission notice of 3 September 1986 (4), the Commission is taking a further step towards defining the scope of Article 85 (1), in order to facilitate cooperation between undertakings.

2. Article 85 (1) prohibits agreements which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market. The Court of Justice of the European Communities has clarified that this provision is not applicable where the impact of the agreement on intra-Community trade or on competition is not appreciable. Agreements which are not capable of significantly affecting trade between Member States are not caught by Article 85. They should therefore be examined on the basis, and within the framework, of national legislation alone. This is also the case for agreements whose actual or potential effect remains limited to the territory of only one Member State or of one or more third countries. Likewise, agreements which do not have as their object or their effect an appreciable restriction of competition are not caught by the prohibition contained in Article 85 (1).

3. In this notice the Commission, by setting quantitative criteria and by explaining their application, has given a sufficiently concrete meaning to the term 'appreciable` for undertakings to be able to judge for themselves whether their agreements do not fall within the prohibition pursuant to Article 85 (1) by virtue of their minor importance. The quantitiative definition of appreciability, however, serves only as a guideline: in individual cases even agreements between undertakings which exceed the threshold set out below may still have only a negligible effect on trade between Member States or on competition within the common market and are therefore not caught by Article 85 (1). This notices does not contain an exhaustive description of restictions which fall outside Article 85 (1). It is generally recognized that even agreements which are not of minor importance can escape the prohibition on agreements on account of their exclusively favourable impact on competition.

4. The benchmarks provided by the Commission in this notice should eliminate the need to have the legal status of agreements covered by it established through individual Commission decisions; notification for this purpose will no longer be necessary for such agreements. However, if it is doubtful whether, in an individual case, an agreement is likely to affect trade between Member States or to restrict competition to any significant extent, undertakings are free to apply for negative clearance or to notify the agreement pursuant to Council Regulations No 17 (5), (EEC) No 1017/69 (6), (EEC) No 4056/86 (7) and (EEC) No 3975/87 (8).

5. In cases covered by this notice, and subject to points 11 and 20, the Commission will not institute any proceedings either on application or on its own initiative. Where undertakings have failed to notify an agreement falling within the scope of Article 85 (1) because they assumed in good faith that the agreement was covered by this notice, the Commission will not consider imposing fines.

6. This notice is likewise applicable to decisions by associations of undertakings and to concerted practices.

7. This notice is without prejudice to the competence of national courts to apply Article 85. However, it constitutes a factor which those courts may take into account when deciding a pending case. It is also without prejudice to any interpretation of Article 85 which may be given by the Court of Justice or the Court of First Instance of the European Communities.

8. This notice is without prejudice to the application of national competition laws.

II.

9. The Commission holds the view that agreements between undertakings engaged in the production or distribution of goods or in the provision of services do not fall under the prohibition in Article 85 (1) if the aggregate market shares held by all of the participating undertakings do not exceed, on any of the relevant markets:

(a) the 5 % threshold, where the agreement is made between undertakings operating at the same level of production or of marketing ('horizontal` agreement);

(b) the 10 % threshold, where the agreement is made between undertakings operating at different economic levels ('vertical` agreement).

In the case of a mixed horizontal/vertical agreement or where it is difficult to classify the agreement as either horizontal or vertical, the 5 % threshold is applicable.

10. The Commission also holds the view that the said agreements do not fall under the prohibition of Article 85 (1) if the market shares given at point 9 are exceeded by no more than one 10th during two successive financial years.

11. With regard to:

(a) horizontal agreements which have as their object

- to fix prices or to limit production or sales, or

- to share markets or sources of supply,

(b) vertical agreements which have as their object

- to fix resale prices, or

- to confer territorial protection on the participating undertakings or third undertakings,

the applicability of Article 85 (1) cannot be ruled out even where the aggregate market shares held by all of the participating undertakings remain below the thresholds mentioned in points 9 and 10.

The Commission considers, however, that in the first instance it is for the authorities and courts of the Member States to take action on any agreements envisaged above in (a) and (b). Accordingly, it will only intervene in such cases when it considers that the interest of the Community so demands, and in particular if the agreements impair the proper functioning of the internal market.

12. For the purposes of this notice, 'participating undertakings` are:

(a) undertakings being parties to the agreement;

(b) undertakings in which a party to the agreement, directly or indirectly,

- owns more than half of the capital or business assets, or

- has the power to exercise more than half of the voting rights, or

- has the power to appoint more than half of the members of the supervisory board, board of management or bodies legally representing the undertakings, or

- has to the right to manage the undertaking's business;

(c) undertakings which directly or indirectly have over a party to the agreement the rights or powers listed in (b);

(d) undertakings over which an undertaking referred to in (c) has, directly or indirectly, the rights or powers listed in (b).

Undertakings over which several undertakings as referred to in (a) to (d) jointly have, directly or indirectly, the rights or powers set out in (b) shall also be considered to be participating undertakings.

13. In order to calculate the market share, it is necessary to determine the relevant market; for this, the relevant product market and the relevant geographic market must be defined.

14. The relevant product market comprises any products or services which are regarded as interchangeable or substitutable by the consumer, by reason of their characteristics, prices and intended use.

15. The relevant geographic market comprises the area in which the participating undertakings are involved in the supply of relevant products or services, in which the conditions of competition are sufficiently homogeneous, and which can be distinguished from neighbouring geographic areas because, in particular, conditions of competition are appreciably different in those areas.

16. When applying points 14 and 15, reference should be had to the notice (on the definition of the relevant market under Community competition law (9).

17. In the case of doubt about the delimitation of the relevant geographic market, undertakings may take the view that their agreement has no appreciable effect on intra-Community trade or on competition when the market share thresholds indicated in points 9 and 10 are not exceeded in any Member State. This view, however, does not preclude the application of national competition law to the agreements in question.

18. Chapter II of this notice shall not apply where in a relevant market competition is restricted by the cumulative effects of parallel networks of similar agreements established by several manufacturers or dealers.

III.

19. Agreements between small and medium-sized undertakings, as defined in the Annex to Commission recommendation 96/280/EC (10) are rarely capable of significantly affecting trade between Member States and competition within the common market. Consequently, as a general rule, they are not caught by the prohibition in Article 85 (1). In cases where such agreements exceptionally meet the conditions for the application of that provision, they will not be of sufficient Community interest to justify any intervention. This is why the Commission will not institute any proceedings, either on request or on its own initiative, to apply the provisions of Article 85 (1) to such agreements, even if the thresholds set out in points 9 and 10 above are exceeded.

20. The Commission nevertheless reserves the right to intervene in such agreements:

(a) where they significantly impede competition in a substantial part of the relevant market,

(b) where, in the relevant market, competition is restricted by the cumulative effect of parallel networks of similar agreements made between several producers or dealers.

(1) OJ C 75, 29. 7. 1968. p. 3, as corrected in OJ C 84, 28. 8. 1968, p. 14.

(2) OJ C 1, 3. 1. 1979, p. 2.

(3) OJ C 43, 16. 2. 1993, p. 2.

(4) OJ C 231, 12. 9. 1986, p. 2.

(5) OJ 13, 21. 2. 1962, p. 204/62.

(6) OJ L 175, 23. 7. 1968, p. 1.

(7) OJ L 378, 31. 12. 1986, p. 4.

(8) OJ L 374, 31. 12. 1987, p. 1.

(9) OJ C 372, 9. 12. 1997, p. 5.

(10) OJ L 107, 30. 4. 1996, p. 4.