ANNEX

Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements

DRAFT

TABLE OF CONTENTS

1. Introduction 8

1.1. Purpose and structure of these Guidelines 8

1.2. Applicability of Article 101 to horizontal cooperation agreements 9

1.2.1. Introduction 9

1.2.2. Analytical framework 11

1.2.3. Assessment under Article 101(1) 12

1.2.4. Restrictions of competition by object 13

1.2.5. Restrictive effects on competition 14

1.2.6. Ancillary restrictions 15

1.2.7. Assessment under Article 101(3) 15

1.2.8. Horizontal cooperation agreements that generally fall outside the scope of Article 101(1) 16

1.3. Relationship with other guidance and legislation 17

2. Research and Development Agreements 18

2.1. Introduction 18

2.2. Relevant markets 19

2.3. Assessment under Article 101(1) 20

2.3.1. Main competition concerns 20

2.3.2. Restrictions of competition by object 20

2.3.3. Restrictive effects on competition 20

2.4. Agreements covered by the R&D BER 22

2.4.1. Distinction between ‘joint R&D’ and ‘paid-for R&D’ and concept of ‘specialisation in the context of R&D’ 23

2.4.2. Joint exploitation of the R&D results and concept of specialisation in the context of joint exploitation 23

2.4.3. Assignment or licensing of intellectual property rights 25

2.5. Conditions for exemption under the R&D BER 25

2.5.1. Access to the final results 25

2.5.2. Access to pre-existing know-how 26

2.5.3. Conditions linked to joint exploitation 26

2.5.4. Thresholds, market shares and duration of exemption 26

2.6. Hardcore and excluded restrictions 32

2.6.1. Hardcore restrictions 32

2.6.2. Excluded restrictions 34

2.7. Withdrawal of the benefit of the R&D BER 35

2.8. Assessment under Article 101(3) of R&D agreements falling outside the scope of the R&D BER 37

2.8.1. Efficiency gains 37

2.8.2. Indispensability 37

2.8.3. Pass-on to consumers 37

2.8.4. No elimination of competition 37

2.9. Time of the assessment 37

2.10. Example 38

3. Production Agreements 40

3.1. Introduction 40

3.2. Relevant markets 41

3.3. Assessment under Article 101(1) 41

3.3.1. Main competition concerns 41

3.3.2. Restrictions of competition by object 42

3.3.3. Restrictive effects on competition 43

3.4. Agreements covered by the Specialisation BER 46

3.4.1. Specialisation agreements 46

3.4.2. Other provisions in specialisation agreements 47

3.4.3. Joint distribution and the concept of ‘joint’ under the Specialisation BER 48

3.4.4. Services under the Specialisation BER 48

3.4.5. Competing undertakings: actual or potential competitors 48

3.4.6. Market share threshold and duration of the exemption 48

3.4.7. Hardcore restrictions in the Specialisation BER 50

3.4.8. Withdrawal of the benefit of the Specialisation BER 50

3.5. Assessment under Article 101(3) of production agreements falling outside the scope of the Specialisation BER 51

3.5.1. Efficiency gains 51

3.5.2. Indispensability 51

3.5.3. Pass-on to consumers 51

3.5.4. No elimination of competition 52

3.6. Mobile infrastructure sharing agreements 52

3.7. Examples 54

4. Purchasing agreements 57

4.1. Introduction 57

4.2. Assessment under Article 101(1) 58

4.2.1. Main competition concerns 58

4.2.2. Restrictions of competition by object 58

4.2.3. Restrictive effects on competition 59

4.3. Assessment under Article 101(3) 63

4.3.1. Efficiency gains 63

4.3.2. Indispensability 63

4.3.3. Pass-on to consumers 63

4.3.4. No elimination of competition 63

4.4. Examples 64

5. Commercialisation Agreements 66

5.1. Introduction 66

5.2. Assessment under Article 101(1) 67

5.2.1. Main competition concerns 67

5.2.2. Restrictions of competition by object 67

5.2.3. Restrictive effects on competition 68

5.3. Assessment under Article 101(3) 69

5.3.1. Efficiency gains 69

5.3.2. Indispensability 70

5.3.3. Pass-on to consumers 70

5.3.4. No elimination of competition 70

5.4. Bidding consortia 70

5.5. Examples 72

6. Information exchange 76

6.1. Introduction 76

6.2. Assessment under Article 101(1) 78

6.2.1. Introduction 78

6.2.2. Main competition concerns related to information exchange 79

6.2.3. The nature of the information exchanged 80

6.2.4. The characteristics of the exchange 82

6.2.5. Market characteristics 86

6.2.6. Restriction of competition by object 87

6.2.7. Restrictive effects on competition 88

6.3. Assessment under Article 101(3) 89

6.3.1. Efficiency gains 89

6.3.2. Indispensability 89

6.3.3. Pass-on to consumers 89

6.3.4. No elimination of competition 90

6.4. Examples 90

7. Standardisation agreements 92

7.1. Introduction 92

7.2. Relevant markets 92

7.3. Assessment under Article 101(1) 92

7.3.1. Main competition concerns 92

7.3.2. Restrictions of competition by object 94

7.3.3. Restrictive effects on competition 94

7.4. Assessment under Article 101(3) 99

7.4.1. Efficiency gains 99

7.4.2. Indispensability 99

7.4.3. Pass on to consumers 101

7.4.4. No elimination of competition 101

7.5. Examples 101

8. Standard terms 102

8.1. Definitions 102

8.2. Relevant markets 102

8.3. Assessment under Article 101(1) 102

8.3.1. Main competition concerns 102

8.3.2. Restriction of competition by object 103

8.3.3. Restrictive effects on competition 103

8.4. Assessment under Article 101(3) 104

8.4.1. Efficiencies 104

8.4.2. Indispensability 104

8.4.3. Pass on to consumers 105

8.4.4. No elimination of competition 105

8.5. Examples 105

9. Sustainability Agreements 106

9.1. Introduction 106

9.2. Sustainability agreements not raising competition concerns 108

9.3. Assessment of sustainability agreements under Article 101(1) 108

9.3.1. Principles 108

9.3.2. Sustainability standardisation agreements 109

9.4. Assessment of sustainability agreements under Article 101(3) 112

9.4.1. Efficiency gains 112

9.4.2. Indispensability 112

9.4.3. Pass on to consumers 113

9.4.4. No elimination of competition 117

9.5. Involvement of public authorities 117

9.6. Examples 117

1. INTRODUCTION

1.1. Purpose and structure of these Guidelines

1. These Guidelines ( 1 ) aim to provide legal certainty by assisting undertakings in the assessment of their horizontal cooperation agreements under the Union competition rules while ensuring an effective protection of competition. They also aim to make it easier for undertakings to cooperate in ways which are economically desirable and thereby, for example, contribute to the green and digital transitions and to fostering the resilience of the internal market ( 2 )

2. The Guidelines set out the principles for the assessment of horizontal cooperation agreements and concerted practices under Article 101 of the Treaty on the Functioning of the European Union ( *1 ) (hereinafter referred to as ‘Article 101’) and provide an analytical framework for the most common types of horizontal cooperation agreements: — research and development agreements, including guidance on the application of Commission Regulation (EU) No […] of […] December 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to certain categories of research and development agreements (hereinafter referred to as ‘R&D BER’) (Chapter 2), — production agreements including guidance on the application of Commission Regulation (EU) No […] of […] December 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to certain categories of specialisation agreements (hereinafter referred to as ‘Specialisation BER’) (Chapter 3), — purchasing agreements (Chapter 4), — commercialisation agreements (Chapter 5), — information exchange (Chapter 6), — standardisation agreements (Chapter 7), — standard terms (Chapter 8).

3. In addition, as the Commission is committed to the attainment of the objectives of the Green Deal for the European Union ( 3 ) , these Guidelines provide guidance on how the most common horizontal cooperation agreements will be assessed under Article 101 when they pursue sustainability objectives (Chapter 9).

4. Given the potentially large number of types and combinations of horizontal cooperation and market circumstances in which they may operate, it is difficult to provide specific guidance for every possible scenario. The Guidelines do not constitute a ‘checklist’ which can be applied mechanically. Each case must be assessed on the basis of its own facts.

5. These Guidelines apply to horizontal cooperation agreements concerning goods, services and technologies.

6. Horizontal cooperation agreements may combine different stages of cooperation, for example research and development (‘R&D’) and the production and/or commercialisation of its results. Such agreements are also covered by these Guidelines. When using these Guidelines for the analysis of such integrated cooperation, as a general rule, all the chapters pertaining to the different parts of the cooperation will be relevant. However, for the assessment of whether certain conduct will normally be considered a restriction of competition by object or by effect, what is set out in the chapter pertaining to that part of an integrated cooperation which can be considered its ‘centre of gravity’, prevails for the entire cooperation.

7. Two factors are in particular relevant for the determination of the centre of gravity of integrated cooperation: firstly, the starting point of the cooperation, and, secondly, the degree of integration of the different functions which are combined. Although it is not possible to provide a precise and definite rule that is valid for all cases and all possible combinations, according to the experience gathered it is possible to consider that in general: — the centre of gravity of a horizontal cooperation agreement involving both joint R&D and joint production of the results would be the joint R&D if the joint production will only take place if the joint R&D is successful. This means that the results of the joint R&D are decisive for the subsequent joint production. The guidance in the Chapter on R&D agreements prevails in this case. The outcome of the assessment of the centre of gravity would be different if the parties would have engaged in the joint production in any event, that is to say, irrespective of the joint R&D. This means that such agreements should instead be assessed as joint production agreements and the guidance in the Chapter on production agreements prevails. If the agreement provides for a full integration in the area of production and only a partial integration of some R&D activities, the centre of gravity of the cooperation would also be the joint production; — similarly, the centre of gravity of a horizontal cooperation agreement involving both specialisation and joint commercialisation of the results, would normally be the specialisation, as the joint commercialisation will only take place because of the cooperation in the specialisation activity; — the centre of gravity of a horizontal cooperation agreement involving joint production and joint commercialisation of the products, would normally be the joint production, as the joint commercialisation generally will only take place because of the cooperation in the main activity of joint production.

8. The centre of gravity test only applies to the relationship between the different chapters of these Guidelines, not to the relationship between different block exemption regulations. The scope of a block exemption regulation is defined by its own provisions. See Chapter 2 for agreements covered by the R&D BER and Chapter 3 for agreements covered by the Specialisation BER.

9. These Guidelines are structured as follows: — The first Chapter is an introduction, that sets out the context in which Article 101 applies to horizontal cooperation agreements. This Chapter also provides information on the relationship between these Guidelines and other legislation and guidance affecting horizontal cooperation agreements. — In Chapters 2 to 8, guidance is provided to facilitate the self-assessment under Article 101 for the most common horizontal cooperation agreements. Chapter 9 provides additional guidance in case these agreements pursue sustainability objectives. The guidance in Chapters 2 to 9 complements the more general guidance given in this introduction. It is therefore recommended to always read the introduction first and then refer to the specific chapters.

1.2. Applicability of Article 101 to horizontal cooperation agreements

1.2.1. Introduction

10. One of the objectives of Article 101 is to ensure that undertakings do not use horizontal cooperation agreements to prevent, restrict or distort competition on the market to the ultimate detriment of consumers.

11. Article 101 applies to undertakings and associations of undertakings. An undertaking is any entity of personal, tangible and intangible elements, engaged in an economic activity, irrespective of its legal status and the way in which it is financed ( 4 ) . An association of undertakings is a body through which undertakings of the same general type coordinate their conduct on the market ( 5 ) . This guidance applies to horizontal cooperation agreements between undertakings and decisions of associations of undertakings.

12. When a company exercises decisive influence over another company they form a single economic entity and, hence, are part of the same undertaking ( 6 ) . Companies that form part of the same undertaking are not considered to be competitors for the purposes of these Guidelines, even if they are both active on the same relevant product and geographic markets.

13. For the purpose of establishing liability for an infringement of Article 101(1), the Court of Justice has established that parent companies and their joint venture form a single economic unit and, therefore, a single undertaking as regards competition law and the relevant market(s), in so far as it is demonstrated that the parent companies of a joint venture exercise decisive influence over that joint venture ( 7 ) . Hence, when it is demonstrated that the parents exercised decisive influence over the joint venture, the Commission will typically not apply Article 101(1) to agreements and concerted practices between the parent(s) and the joint venture concerning their activity in the relevant market(s) where the joint venture is active. Nevertheless, the Commission will typically apply Article 101(1) to agreements: — between the parents to create the joint venture; — between the parents to alter the scope of the joint venture; — between the parents and the joint venture outside the product and geographic scope of the activity of the joint venture; and — between the parents without involvement of the joint venture, even concerning the relevant market where the joint venture is active.

14. The fact that a joint venture and its parents are considered to form part of the same undertaking on a certain market does not prevent the parent companies from being independent on all other markets ( 8 )

15. In order for Article 101 to apply to horizontal cooperation, there must be a form of coordination between competitors - in other words: an agreement between undertakings, a decision by an association of undertakings or a concerted practice. Horizontal cooperation may take the form of an agreement, whereby two or more undertakings have expressed the concurrence of wills to cooperate (9). A concerted practice is a form of coordination between undertakings in which they have not reached an agreement but knowlingly substitute the risks of competition through practical cooperation (10). The concept of a concerted practice implies, in addition to the participating undertakings concerting with each other, subsequent conduct on the market and a relationship of cause and effect between the two (11).

16. The existence of an agreement, a concerted practice or decision by an association of undertakings does not in itself indicate that there is a restriction of competition within the meaning of Article 101(1). For ease of reference, unless otherwise stated, in these Guidelines the term ‘agreement’ also covers concerted practices and decisions of associations of undertakings.

17. Horizontal cooperation agreements can be entered into between actual or potential competitors. Two undertakings are treated as actual competitors if they are active on the same product market and geographical market. An undertaking is considered as a potential competitor of another undertaking if, in the absence of the agreement it is likely that the former, within a short period of time ( 12 ) , would undertake the necessary additional investments or other necessary switching costs to enter the relevant market on which the latter is active. This assessment has to be based on realistic grounds, the mere theoretical possibility to enter a market is not sufficient ( 13 ) . Where these Guidelines refer to competitors, both actual and potential competitors are intended, unless indicated otherwise. For the assessment of whether an undertaking can be considered as a potential competitor of another undertaking, the following considerations may be relevant: — If the undertaking has a firm intention and an inherent ability to enter the market within a short period of time and does not meet barriers to entry that are insurmountable (14); — Whether the undertaking has taken sufficient preparatory steps to enable it to enter the market concerned; — The real and concrete possibilities of the undertaking not yet active joining that market and competing with one or more of the other undertakings - the mere theoretical possibility to enter a market is not sufficient; — The structure of the market and the economic and legal context within which it operates. — The perception of the established undertaking is a factor that is relevant to the assessment of the existence of a competitive relationship between that party and an undertaking outside the market since, if the latter is perceived as a potential entrant to the market, it may, by reason merely that it exists, give rise to competitive pressure on the operator that is established in that market; — The conclusion of an agreement between a number of undertakings, operating at the same level in the production chain, some of which had no presence in the market concerned (15).

1.2.2. Analytical framework

18. The assessment under Article 101 consists of two steps. The first step, under Article 101(1), is to assess whether an agreement between undertakings, which is capable of affecting trade between Member States, has an anti-competitive object or actual or potential ( 16 ) restrictive effects on competition.

19. The second step, under Article 101(3), which only becomes relevant when an agreement is found to be restrictive of competition within the meaning of Article 101(1), is to determine the pro-competitive benefits produced by that agreement and to assess whether those pro-competitive effects outweigh the restrictive effects on competition ( 17 ) . The balancing of restrictive and pro-competitive effects is conducted exclusively within the framework laid down by Article 101(3) ( 18 ) . If the pro-competitive effects do not outweigh a restriction of competition, Article 101(2) stipulates that the agreement shall be automatically void.

20. Article 101 does not apply where the anti-competitive conduct of undertakings is required either by national legislation, or by a national legal framework which precludes all scope for competitive activity for the undertakings involved ( 19 ) . In such situations, undertakings are precluded from engaging in autonomous conduct which might prevent, restrict or distort competition ( 20 ) . The fact that public authorities encourage a horizontal cooperation agreement does not mean that it is permissible under Article 101 ( 21 ) . Undertakings remain subject to Article 101 if a national law merely encourages or makes it easier for them to engage in autonomous anti-competitive conduct. In certain cases, undertakings are encouraged by public authorities to enter into horizontal cooperation agreements in order to attain a public policy objective by way of self-regulation.

1.2.3. Assessment under Article 101(1)

1.2.3.1. Main competition concerns related to horizontal cooperation

21. Horizontal cooperation agreements can lead to substantial economic benefits, including sustainability benefits, in particular if they combine complementary activities, skills or assets. Horizontal cooperation can be a means to share risk, save costs, increase investments, pool know-how, enhance product quality and variety and launch innovation faster. Similarly, horizontal cooperation can be a means to address shortages and disruptions in supply chains or reduce dependencies on certain products, services and technologies.

22. Horizontal cooperation agreements may however also limit competition in several ways. The agreement may for instance lead to a loss of competition on the relevant market, risk collusion between the parties or give rise to anti-competitive foreclosure concerns.

1.2.3.2. Loss of competition on the relevant market

23. The potential effect of horizontal cooperation agreements may be the loss of competition between the parties to the agreement. Competitors can benefit from the reduction of competitive pressure that results from the agreement and may therefore find it profitable to increase their prices or adversely affect the other parameters of competition on the market.

24. For the competitive assessment of the agreement it is relevant whether: — the parties to the agreement have high market shares; — they are actual or potential competitors; — the customers have sufficient possibilities of switching suppliers; — competitors are likely to increase supply if prices increase, and — one of the parties to the agreement is an important competitive force.

1.2.3.3. Risk of collusion

25. A horizontal cooperation agreement may also decrease the parties’ decision-making independence and as a result increase the likelihood that they will coordinate their behaviour in order to reach a collusive outcome. However, it may also make coordination easier, more stable or more effective for parties that were already coordinating before, either by making the coordination more robust or by permitting them to achieve even higher prices. Horizontal cooperation can for instance lead to the disclosure of strategic information thereby increasing the likelihood of coordination among the parties within or outside the field of the cooperation. Moreover, parties may achieve significant commonality of costs (that is to say, the proportion of variable costs which the parties have in common), allowing them to more easily coordinate market prices and output.

26. For the competitive assessment of the agreement it is relevant whether: — the parties to the agreement have high market shares; — they are actual or potential competitors; — the market characteristics are conducive to coordination; — the area of cooperation accounts for a high proportion of the parties’ variable costs in a given market; and — the parties combine their activities in the area of cooperation to a significant extent. This could, for instance, be the case, where they jointly manufacture or purchase an important intermediate product or jointly manufacture or distribute a high proportion of their total output of a final product.

1.2.3.4. Foreclosure

27. Some horizontal cooperation agreements, for example production and standardisation agreements, may also give rise to anti-competitive foreclosure concerns. Through anti-competitive means, competitors would then be impeded from competing effectively, for example by denying them access to an important imput or blocking an important route to the market. An exchange of commercially sensitive information or data may also place unaffiliated competitors at a significant competitive disadvantage as compared to the undertakings affiliated within the exchange system.

1.2.4. Restrictions of competition by object

28. Certain types of cooperation between undertakings can be regarded, by their very nature as being harmful to the proper functioning of normal competition ( 22 ) . In such cases, it is not necessary to examine the actual or potential effects of the behaviour on the market, once its anti-competitive object has been established ( 23 )

29. potential to have a negative impact on competition. In other words, the agreement must simply be capable in an individual case, having regard to the specific legal and economic context, of resulting in the prevention, restriction or distortion of competition within the internal market In order for a horizontal cooperation agreement to be regarded as having an anti-competitive object, it is sufficient that it has theto have a negative impact on competition. In other words, the agreement must simply be capable in an individual case, having regard to the specific legal and economic context, of resulting in the prevention, restriction or distortion of competition within the internal market ( 24 )

30. In order to find that an agreement has an anti-competitive object, there does not need to be a direct link between the agreement and consumer prices ( 25 ) . Article 101 is designed to protect not only the immediate interests of individual competitors or consumers but also to protect the structure of the market and thus competition as such ( 26 )

31. The concept of restriction of competition ‘by object’ can be applied to practices for which, after an individual and detailed examination, it is demonstrated that they present a sufficient degree of harm to competition ( 27 )

32. In order to assess whether an agreement has an anti-competitive object, the following elements are taken into account: — the content of the agreement, — the objectives it seeks to attain, — the economic and legal context of which it forms part.

33. When determining that legal and economic context, it is also necessary to take into consideration ( 28 ) — the nature of the goods or services affected, — the real conditions of the functioning and structure of the market or markets in question (29).

34. Where the parties raise possible pro-competitive effects of the agreement, which should not only be demonstrated and relevant, but also specifically related to the agreement concerned and sufficiently significant, the Commission will take due account of this ( 30 )

35. intention is not a necessary factor in determining whether an agreement has an anti-competitive object, but it may be taken into account The parties’is not a necessary factor in determining whether an agreement has an anti-competitive object, but it may be taken into account ( 31 )

1.2.5. Restrictive effects on competition

36. A horizontal cooperation agreement that does not in itself reveal a sufficient degree of harm to competition, can still have restrictive effects on competition. For a horizontal cooperation agreement to have restrictive effects on competition, it must have, or be likely to have, an appreciable adverse impact on at least one of the parameters of competition on the market, such as price, output, product quality, product variety or innovation. To establish whether this is the case, it is necessary to assess competition within the actual context in which it would occur if that agreement had not existed ( 32 ) . Agreements can have restrictive effects by appreciably reducing competition between the undertakings that are parties to the agreement or between any one of them and third parties ( 33 )

37. In order to assess whether an agreement has restrictive effects, the following elements are relevant: — The nature and content of the agreement; — the actual context in which the cooperation occurs, in particular the economic and legal context in which the undertakings concerned operate, the nature of the goods or services affected, as well as the real conditions of the functioning and the structure of the market or markets in question (34); — the extent to which the parties individually or jointly have or obtain some degree of market power and the extent to which the agreement contributes to the creation, maintenance or strengthening of that market power or allows the parties to exploit such market power (35); — the restrictive effects on competition may be actual and potential, but they must, in any event, be sufficiently appreciable (36).

38. Sometimes undertakings conclude horizontal cooperation agreements as they would not be able to independently carry out the project or activity covered by the cooperation on the basis of objective factors, for instance, due to the limited technical capabilities of the parties. Such horizontal cooperation agreements will normally not give rise to restrictive effects on competition within the meaning of Article 101(1) unless the parties could have carried out the project with less stringent restrictions ( 37 )

1.2.6. Ancillary restrictions

39. A horizontal cooperation agreement that is compliant with Article 101(1) may still restrict the commercial autonomy of the parties to that agreement. Such a so-called ‘ancillary restraint’ may in itself also be compliant with Article 101(1) if it is objectively necessary to implement the horizontal cooperation agreement and proportionate to the objectives thereof ( 38 ) . In such cases it is necessary to examine whether the agreement would be impossible to carry out in the absence of the restriction in question ( 39 ) . The fact that the operation or the activity at stake is simply more difficult to implement, or less profitable without the restriction concerned, does not make that restriction ‘objectively necessary’ and thus ancillary ( 40 )

1.2.7. Assessment under Article 101(3)

40. The assessment of restrictions of competition by object or effect under Article 101(1) is only one side of the analysis. The other side, which is reflected in Article 101(3), is the assessment of the pro-competitive effects of restrictive agreements ( 41 ) . Where, in an individual case, a restriction of competition by object or by effect, within the meaning of Article 101(1), has been proven, Article 101(3) can be invoked as a defence. According to Article 2 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty ( 42 ) , the burden of proof under Article 101(3) rests on the undertaking(s) invoking the benefit of this provision. Therefore, the factual arguments and the evidence provided by the undertaking(s) must enable the Commission to arrive at the conviction that the agreement in question is sufficiently likely to give rise to pro-competitive effects ( 43 )

41. The application of the exception rule of Article 101(3) is subject to four cumulative conditions, two positive and two negative: — the agreement must contribute to improving the production or distribution of products or contribute to promoting technical or economic progress, that is to say, lead to efficiency gains; — the restrictions must be indispensable to the attainment of those objectives, that is to say, the efficiency gains; — consumers must receive a fair share of the resulting benefits, that is to say, the efficiency gains, including qualitative efficiency gains, attained by the indispensable restrictions must be sufficiently passed on to consumers so that they are at least compensated for the restrictive effects of the agreement. Hence, efficiencies only accruing to the parties to the agreement will not suffice. For the purposes of these Guidelines, the concept of ‘consumers’ encompasses the customers, potential and/or actual, of the parties to the agreement (44); and — the agreement must not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question.

42. The R&D BER and Specialisation BER are based on Article 101(3). They are based on the premise that the combination of complementary skills or assets can be the source of substantial efficiencies in R&D and specialisation agreements. This may also be the case for other types of horizontal cooperation agreements. The analysis of the efficiencies of an individual agreement under Article 101(3) is therefore to a large extent a question of identifying the complementary skills and assets that each of the parties brings to the agreement and evaluating whether the resulting efficiencies are such that the conditions of Article 101(3) are fulfilled. Complementarities may arise from horizontal cooperation agreements in various ways. An R&D agreement may bring together different research capabilities and combine complementary skills and assets that may result in improved or new products and technologies being developed and marketed than would otherwise be the case. Other horizontal cooperation agreeements may allow parties to combine forces to design, produce and commercialise products or to jointly purchase products or services they may need for their operations.

43. Horizontal cooperation agreements that do not involve the combination of complementary skills or assets are less likely to lead to efficiency gains that benefit consumers. Such agreements may reduce duplication of certain costs, for instance because certain fixed costs can be eliminated. However, fixed cost savings are, in general, less likely to result in benefits to consumers than savings in, for instance, variable or marginal costs.

1.2.8. Horizontal cooperation agreements that generally fall outside the scope of Article 101(1)

44. Effect on Trade Guidelines ’) De Minimis Notice ’) Agreements that are not capable of appreciably affecting trade between Member States (lack of effect on trade) or which do not appreciably restrict competition (agreements of minor importance) fall outside the scope of Article 101(1) ( 45 ) . The Commission has provided guidance on the lack of effect on trade in the Commission Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty (hereinafter ‘’) ( 46 ) , and on agreements of minor importance in the Commission Notice on agreements of minor importance which do not appreciably restrict competition under 101(1) of the Treaty on the Functioning of the European Union (hereinafter ‘’) ( 47 ) . These Guidelines are without prejudice to the Effect on Trade Guidelines and the De Minimis Notice, as well as any future Commission guidance in this respect.

45. The Effect on Trade Guidelines set out the principles developed by the Union Courts to interpret the effect on trade concept and indicate when agreements are unlikely to be capable of appreciably affecting trade between Member States. They include a negative rebuttable presumption that applies to all agreements within the meaning of Article 101(1) irrespective of the nature of the restrictions included in such agreements, thus applying also to agreements containing hardcore restrictions ( 48 ) . According to this presumption, horizontal cooperation agreements are in principle not capable of appreciably affecting trade between Member States when: — the aggregate market share of the parties on any relevant market within the Union affected by the agreement does not exceed 5 %, and — the aggregate annual Union turnover of the undertakings concerned in the products covered by the agreement does not exceed EUR 40 million (49). — In the case of agreements concerning the joint buying of products, the relevant turnover shall be the parties’ combined purchases of the products covered by the agreement. The Commission may rebut the presumption if an analysis of the characteristics of the agreement and its economic context demonstrates the contrary.

46. As set out in the De Minimis Notice, horizontal cooperation agreements entered into by actual or potential competitors do not appreciably restrict competition within the meaning of Article 101(1) if the aggregate market share held by the parties to the agreement does not exceed 10 % on any of the relevant markets affected by the agreement ( 50 ) . This general rule is subject to two exceptions. Firstly, as regards hardcore restrictions, Article 101(1) applies irrespective of the parties’ market shares ( 51 ) . This is because an agreement that may affect trade between Member States and which has an anti-competitive object may by its nature and independently of any concrete effect constitute an appreciable restriction on competition ( 52 ) . Secondly, the 10 % market share threshold is reduced to 5 % where, in a relevant market, competition is restricted by the cumulative effect of parallel networks of agreements ( 53 )

47. Furthermore, there is no presumption that horizontal agreements concluded by undertakings of which one or more has an individual market share exceeding 10 % automatically fall within Article 101(1). Such agreements may still lack an appreciable effect on trade between Member States or they may not constitute an appreciable restriction of competition ( 54 ) . They therefore need to be assessed in their legal and economic context. These Guidelines include criteria for the individual assessment of such agreements

1.3. Relationship with other guidance and legislation

48. Regulation (EU) No …/2022 ’ or ‘ VBER ’) and the Communication from the Commission – Commission Notice – Guidelines on Vertical Restraints (hereinafter referred to as ‘ Vertical Guidelines ’) Agreements that are entered into between undertakings operating at a different level of the production or distribution chain, that is to say, vertical agreements, are in principle dealt with in Commission Regulation (EU) No …/2022 of XX April 2022 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices ( 55 ) (hereinafter referred to as ‘’ or ‘’) and the Communication from the Commission – Commission Notice – Guidelines on Vertical Restraints (hereinafter referred to as ‘’) ( 56 ) . However, to the extent that vertical agreements, for example, distribution agreements, are concluded between competitors, the effects of the agreement on the market and the possible competition problems can be similar to horizontal agreements. Therefore, vertical agreements between competitors fall under these Guidelines ( 57 ) . Should there be a need to also assess such agreements under the VBER and the Vertical Guidelines, this will be specifically stated in the relevant chapter of these Guidelines. In the absence of such a reference, only these Guidelines will be applicable to vertical agreements between competitors.

49. Market Definition Notice ’) can provide guidance on the rules, criteria and evidence which the Commission uses when considering market definition issues Where these Guidelines refer to the relevant market: the Commission Notice on the definition of relevant market for the purposes of Union competition law (hereinafter referred to as ‘’) can provide guidance on the rules, criteria and evidence which the Commission uses when considering market definition issues ( 58 ) . The relevant market for the purpose of applying Article 101 to horizontal cooperation agreements should therefore be defined on the basis of that guidance and any future guidance relating to the definition of relevant markets for the purposes of Union competition law.

50. Although these Guidelines contain references to cartels, they are not intended to give any guidance as to what does and does not constitute a cartel as defined by the decisional practice of the Commission and the case-law of the Court of Justice of the European Union.

51. Merger Regulation ’) as would be the case, for example, with joint ventures performing on a lasting basis all the functions of an autonomous economic entity (‘full-function joint ventures’) These Guidelines apply to the most common types of horizontal cooperation agreements irrespective of the level of integration they entail with the exception of operations constituting a concentration within the meaning of Article 3 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings ( 59 ) (hereinafter referred to as the ‘’) as would be the case, for example, with joint ventures performing on a lasting basis all the functions of an autonomous economic entity (‘full-function joint ventures’) ( 60 )

52. These Guidelines do not apply to agreements, decisions and concerted practices of producers of agricultural products that relate to the production of or trade in agricultural products and that aim to apply a sustainability standard higher than mandated by Union or national law and exempted from Article 101(1) pursuant to Article 210a of Regulation (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products ( 61 ) . These Guidelines are without prejudice to the Guidelines the Commission will issue in accordance with Article 210a(5) of that Regulation. However, agreements, decisions and concerted practices of producers of agricultural products that relate to the production of or trade in agricultural products and that do not meet the conditions of Article 210a, are subject to Article 101(1).

53. The assessment under Article 101 as described in these Guidelines is without prejudice to the possible parallel application of Article 102 of the Treaty to horizontal cooperation agreements ( 62 )

54. These Guidelines are without prejudice to the interpretation the Court of Justice of the European Union may give to the application of Article 101 to horizontal cooperation agreements.

55. These Guidelines replace the Commission Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements ( 63 ) which were published by the Commission in 2011 and do not apply to the extent that sector specific rules apply as is the case for certain agreements with regard to agriculture ( 64 ) or transport ( 65 ) . The Commission will continue to monitor the operation of the R&D BER and Specialisation BER and these Guidelines based on market information from stakeholders and national competition authorities and may revise these Guidelines in the light of future developments and of evolving insight.

2. RESEARCH AND DEVELOPMENT AGREEMENTS

2.1. Introduction

56. The purpose of this Chapter is to provide guidance on the scope and competitive assessment of R&D agreements.

57. R&D agreements vary in form and scope. They include outsourcing agreements for certain R&D activities, agreements covering the joint improvement of existing technologies and cooperation concerning the research, development and marketing of completely new products. The R&D cooperation may take the form of a cooperation agreement or of cooperation in a jointly controlled company ( 66 ) . This also includes cooperation between competitors in looser forms, such as technical cooperation in working groups.

59. R&D cooperation may not only affect competition in existing product or technology markets, but also competition in innovation.

60. For the purpose of the R&D BER and this Chapter of the Guidelines, ‘competition in innovation’ ( 69 ) refers to R&D efforts for new products and/or technologies, that create their own new market ( 70 ) and to R&D poles, i.e. R&D efforts directed primarily towards a specific aim or objective arising out of the R&D agreement ( 71 ) . The specific aim or objective of an R&D pole cannot yet be defined as a product or a technology or involves a substantially broader target than a specific product or technology on a specific market.

61. The assessment of R&D agreements under Article 101(1) is covered by Section 2.3 of these Guidelines. R&D agreements may benefit from the safe harbour established by the R&D BER ( 72 ) . The block exemption is based on the consideration that – to the extent that R&D agreements are caught by Article 101(1) and fulfill the criteria set out in the R&D BER – they will typically fulfill the four conditions laid down in Article 101(3). Section 2.4 of these Guidelines describes the agreements covered by the R&D BER. The conditions for exempting R&D agreements are explained in Section 2.5 - Conditions for exemption. The hardcore and excluded restrictions described in Section 2.6 of these Guidelines aim at ensuring that only restrictive agreements that can reasonably be expected to fulfil the conditions of Article 101(3) benefit from the exemption provided for in Article 2 of the R&D BER.

62. The safe harbour applies as long as the benefit of the block exemption has not been withdrawn in an individual case by the Commission or the competition authority of a Member State (‘NCA’) pursuant to Article 29 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty ( 73 ) (Section 2.7 of these Guidelines).

63. Where the safe harbour provided by the R&D BER does not apply to an R&D agreement, then it must be examined whether, in the individual case, the R&D agreement falls within the scope of Article 101(1) and if so whether the conditions of Article 101(3) are satisfied – this is described in Section 2.8 of these Guidelines while Section 2.9 sets out the relevant time of assessment.

2.2. Relevant markets

64. The Market Definition Notice provides guidance on the rules, criteria and evidence which the Commission uses when considering market definition issues ( 74 ) . The relevant market for the purpose of applying Article 101 to R&D agreements should therefore be defined on the basis of that guidance or any future guidance relating to the definition of relevant markets for the purposes of Union competition law, as applicable.

65. Under the R&D BER, a relevant product or technology market is the market for the products or technologies capable of being improved, substituted or replaced by the contract products or technologies ( 75 )

2.3. Assessment under Article 101(1)

2.3.1. Main competition concerns

66. R&D agreements can give rise to different competition concerns, in particular they can directly limit competition between the parties, lead to anti-competitive foreclosure of third parties or to a collusive outcome on the market.

67. Where R&D cooperation directly limits or restricts competition between the parties or facilitates a collusive outcome on the market , this may lead to higher prices, less choice for consumers or lower quality of products or technologies. This could also lead to reduced or slowed-down innovation and thereby to worse or fewer products or technologies coming to the market. It can also lead to products or technologies reaching the market later than they otherwise would.

68. Anti-competitive foreclosure of third parties may arise in particular, when at least one party to the R&D agreement has the right to exclusive exploitation of the results of the R&D and at least one party has a significant degree of market power.

2.3.2. Restrictions of competition by object

69. Agreements relating to R&D restrict competition by object if their main purpose is not R&D, but to serve as a tool to engage in a cartel or in other by object infringements under Article 101(1), such as price fixing, output limitation, market allocation or restrictions of technical development.

70. An R&D agreement may restrict technical development when, instead of cooperating for promoting technical and economic progress, the parties use the R&D cooperation to (a) prevent or delay the market entry of products or technologies, (b) coordinate the characteristics of products or technologies which are not covered by the R&D agreement or (c) limit the potential of a jointly developed product or technology when they bring such a product or technology individually to the market.

2.3.3. Restrictive effects on competition

2.3.3.1. Introduction – agreements normally not restricting competition

71. Many R&D agreements do not fall under Article 101(1) when they are concluded by undertakings with complementary skills that would not otherwise have been able to conduct the R&D on their own.

72. Moreover, R&D cooperation between not competing undertakings ( 76 ) generally does not give rise to restrictive horizontal effects on competition.

73. The competitive relationship between the parties has to be analysed in the context of the affected existing markets ( 77 ) and in the context of innovation ( 78 )

74. If, on the basis of objective factors, the parties would not be able to carry out the necessary R&D independently, the R&D agreement will normally not have restrictive effects on competition. A party may not be able to carry out the R&D independently, for instance, where it has limited technical capabilities or limited access to finance, skilled workers, technologies or other resources.

75. Outsourcing of previously captive R&D is a specific form of R&D cooperation. In such a scenario, the R&D is often carried out by specialised undertakings, research institutes or academic bodies, which are not active in the exploitation of the results. Normally, such agreements are combined with a transfer of know-how and/or an exclusive supply clause concerning the possible results. Due to the complementary nature of the cooperating parties (for instance regarding their skills or technologies) in such a scenario, such agreements do not usually give rise to restrictive effects on competition within the meaning of Article 101(1).

76. R&D cooperation which does not include the joint exploitation of possible results by means of licensing, production and/or marketing rarely gives rise to restrictive effects on competition within the meaning of Article 101(1). Those R&D agreements can however give rise to anti-competitive effects, for example if, as a result of the R&D agreement, competition at innovation level is appreciably reduced.

2.3.3.2. Market power

77. R&D agreements are only likely to give rise to restrictive effects on competition where the parties to the R&D cooperation have market power.

78. There is no absolute threshold above which it can be presumed that an R&D agreement creates or maintains market power and thus is likely to give rise to restrictive effects on competition within the meaning of Article 101(1). However, R&D agreements between undertakings competing for existing products and/or technologies are covered by the exemption in the R&D BER provided that their combined market share does not exceed 25 % on the relevant product and technology markets and that the other conditions for the application of the R&D BER are fulfilled.

79. The R&D BER also covers R&D agreements between undertakings competing in innovation. These agreements are covered by the exemption in the R&D BER provided that there are three or more competing R&D efforts ( 79 ) , in addition to and comparable with those of the parties to the agreement. The other conditions for the application of the R&D BER will also have to be fulfilled. Subject to these conditions, an agreement between undertakings competing in innovation ( 80 ) would be unlikely to have restrictive effects in the internal market given that the parties will likely not be able to profitably maintain innovation below competitive levels for a longer period of time.

80. The stronger the combined position of the parties on existing markets and/or the lower the number of competing R&D efforts in addition to and comparable with those of the parties, the more likely it is that the R&D agreement can cause restrictive effects on competition ( 81 )

2.3.3.3. R&D directed towards an improvement, substitution or replacement of existing products or technologies

81. If the R&D is directed at the improvement of existing products or technologies, possible effects concern the relevant market(s) for those existing products or technologies. Effects on prices, output, product quality, product variety or technical development in existing markets are, however, only likely if the parties together have a strong position, entry is difficult and there are only few other remaining competitors. Furthermore, if the R&D only concerns a relatively minor input of a final product, foreclosure effects in those final products are, if any, very limited.

82. If the R&D is directed at the substitution or replacement of an existing product or technology, possible effects may concern the slowing down of the development of the replacing product or technology. This is in particular the case if the parties have market power on the existing product or technology market and they are also the only ones engaged in R&D for developing a replacement for that existing product or technology. A similar effect can occur if a major player in an existing market cooperates with a much smaller or a potential competitor who is just about to emerge with a product or technology and which may endanger the incumbent’s position.

83. If the parties also include in their agreement the joint exploitation (e.g. production and/or the distribution) of the contract products or contract technologies, the effects on competition have to be examined more closely. In particular, if the parties are strong competitors, restrictive effects on competition in the form of increased prices or reduced output in existing markets are more likely. If, however, the joint exploitation is only done by means of licensing to third parties, restrictive effects such as foreclosure problems are unlikely.

2.3.3.4. R&D poles and R&D efforts directed at a product or technology creating a new market

84. R&D efforts which concern the R&D of new products or technologies, as well as R&D poles are captured by the concept of competition in innovation for the purpose of this Chapter.

85. A new product or technology does not merely improve, substitute or replace existing products or technologies. The demand for the new product or technology will, if emerging, create a new separate market.

86. R&D poles are R&D efforts directed primarily towards a specific aim or objective. The specific aim or objective of an R&D pole cannot yet be defined as a product or a technology or involves a substantially broader target than products or technologies on a specific market.

87. Effects on price and output on existing markets are rather unlikely for such R&D efforts at the time of the assessment of the R&D cooperation, as the R&D effort cannot yet be defined as aiming at a product or a technology. The analysis would therefore have to focus on possible restrictions of competition at innovation level concerning, for instance, the quality and variety of possible future products or technologies and/or the speed or level of innovation. Those restrictive effects can arise where two or more of the few undertakings independently engaging in (for example) the R&D of a new product (in particular when they are at a stage where they are near to launching the new product), start to cooperate instead of developing the new product separately. Such effects are typically the direct result of the cooperation between the parties.

88. Innovation may be restricted even by a pure R&D agreement. In general, however, R&D cooperation concerning new products or technologies or R&D poles is unlikely to give rise to restrictive effects on competition unless there is only a limited number of competing R&D efforts that remains in addition to those of the parties to the R&D cooperation.

2.4. Agreements covered by the R&D BER

89. The benefit of the exemption established by the R&D BER covers those R&D agreements for which it can be assumed with sufficient certainty that they satisfy the conditions of Article 101(3) ( 82 )

90. The R&D BER covers R&D agreements entered into between two or more parties which relate to the conditions under which those parties pursue ( 83 ) (a) joint R&D of contract products or contract technologies which includes or excludes joint exploitation of the results of that R&D; or (b) paid-for R&D of contract products or contract technologies which includes or excludes joint exploitation of the results of that R&D; or (c) joint exploitation of the results of R&D of contract products or contract technologies carried out pursuant to a prior agreement pursuing joint R&D (as defined in point (a) above) between the same parties; or (d) joint exploitation of the results of R&D of contract products or contract technologies carried out pursuant to a prior agreement pursuing paid-for R&D (as defined in point (b) above) between the same parties.

91. The R&D BER draws a distinction between contract products or contract technologies: (a) ‘contract product’ (84) means a product (85) arising out of the joint or paid-for R&D or produced or provided applying the contract technologies. This includes products obtained through an R&D pole as well as new products (86); (b) ‘contract technology’ (87) means a technology or process arising out of the joint or paid-for R&D. This includes technologies or processes obtained through an R&D pole as well as new technologies or processes.

92. Under the R&D BER, the concept of ‘research and development’ means activities aimed at acquiring know-how relating to existing or new products, technologies or processes, the carrying out of theoretical analysis, systematic study or experimentation, including experimental production, technical testing of products or processes, the establishment of the necessary facilities and the obtaining of intellectual property rights for the results.

2.4.1. Distinction between ‘joint R&D’ and ‘paid-for R&D’ and concept of ‘specialisation in the context of R&D’

93. The R&D BER distinguishes between ‘joint R&D’ and ‘paid-for R&D’.

94. joint R&D , their agreement can provide for one of the following ways in which the R&D activities are carrried out When the parties pursue, their agreement can provide for one of the following ways in which the R&D activities are carrried out ( 88 ) (a) the R&D activities are carried out by a joint team, organisation or undertaking; (b) the parties jointly entrust a third party with the R&D activities; or (c) the parties allocate the activities between them by way of ‘specialisation in the context of R&D’. This means that each of the parties is involved in the R&D activities and they divide the R&D work between them in any way that they consider most appropriate. This does not include paid-for R&D (89).

95. Paid-for R&D means R&D that is carried out by at least one party whereas at least one other party finances the R&D but does not carry out any of the R&D activities itself (the financing party).

96. The distinction between joint R&D and paid-for R&D in the R&D BER is relevant for the purpose of the calculation of market shares. For paid-for R&D, the parties will need to also include R&D agreements concluded by the financing party with third parties, with regard to the same contract products or contract technologies, for the purposes of calculating the combined market shares – see Section 2.5.4.2 below.

2.4.2. Joint exploitation of the R&D results and concept of specialisation in the context of joint exploitation

97. The R&D BER explicitly covers agreements that include the joint exploitation of the R&D results. Such agreements are, however, subject to specific provisions.

98. concept of ‘exploitation of the results’ is rather wide and comprises the production or distribution of the contract products or the application of the contract technologies or the assignment or licensing of intellectual property rights or the communication of know-how required for such production or application Theis rather wide and comprises the production or distribution of the contract products or the application of the contract technologies or the assignment or licensing of intellectual property rights or the communication of know-how required for such production or application ( 90 )

99. Under the R&D BER, joint exploitation of the results of the R&D may only pertain to results which are: (a) indispensable for the production of the contract products or the application of the contract technologies; and (b) protected by intellectual property rights or constitute know-how.

100. Conversely, this means that, in order to benefit from the exemption in Article 2 of the R&D BER, the scope of an R&D agreement which includes joint exploitation cannot pertain to results which are not protected by intellectual property or know-how and which are not indispensable for the production of the contract products or the application of the contract technologies.

101. original R&D agreement or in the context of a subsequent agreement covering the joint exploitation of the results of a prior R&D agreement between the same parties The joint exploitation of the results of joint or paid-for R&D can take place either in the context of theR&D agreement or in the context of aagreement covering the joint exploitation of the results of a prior R&D agreement between the same parties ( 91 ) . If the parties choose to carry out the joint exploitation of the results of a prior R&D agreement pursuant to a subsequent agreement, the prior R&D agreement must also meet the conditions of the R&D BER in order for the subsequent joint exploitation agreement to be covered by the exemption provided for in Article 2 of the R&D BER.

102. three different ways in which the results of the R&D can be jointly exploited The R&D BER provides forin which the results of the R&D can be jointly exploited ( 92 ) (a) First, the exploitation can be carried out together by the parties in a joint team, a joint organisation or a joint undertaking; (b) Second, the parties can jointly entrust a third party with the exploitation work; (c) Lastly, the parties can allocate the work between them by way of specialisation in the context of exploitation which means that (93): (i) the parties allocate between them individual tasks such as production or distribution; or (ii) they impose restrictions upon each other regarding the exploitation of the results such as restrictions in relation to certain territories, customers or fields of use; this includes a scenario where only one party produces and distributes the contract products on the basis of an exclusive licence granted by the other parties.

103. Practices constituting specialisation in the context of exploitation will not be treated as hardcore restrictions ( 94 ) . In addition, where the parties specialise in the context of exploitation, they may limit access to the results for the purposes of such exploitation accordingly ( 95 ) . This means that an R&D agreement can, for instance, restrict the exploitation rights of the parties for certain territories, customers or fields of use. If the parties agree that each of them can distribute the contract products (and thus they have not opted for a joint distribution model and they have not agreed that only the party producing the contract products may distribute them), the parties charged with the production of the contract products by way of specialisation must be required to fulfil orders for supplies of the contract products from the other parties ( 96 )

104. Lastly, as mentioned in Section 2.5.4 below, if the R&D agreement covers joint exploitation of the R&D results, the exemption under the R&D BER applies: (i) for the duration of the R&D and (ii) for an additional period of seven years after the contract products or contract technologies are first put on the market within the internal market ( 97 )

2.4.3. Assignment or licensing of intellectual property rights

105. The exemption of the R&D BER also applies to agreements which include provisions on the assignment or licensing of intellectual property rights, provided that those provisions do not constitute the primary object of the R&D agreement but are directly related to and necessary for the implementation of such agreements ( 98 )

106. This exemption covers the assignment or licensing to one or more of the parties or to an entity which the parties establish to carry out the joint R&D, the paid-for R&D or the joint exploitation ( 99 )

107. In these cases, the assignment or licensing will therefore be subject to the provisions of the R&D BER and not to those of the Technology Transfer Block Exemption Regulation ( 100 ) . However, in the context of R&D agreements, the parties can also determine the conditions for licensing of the results of the R&D to third parties. Such licence agreements are not covered by the R&D BER but may be covered by the block exemption in the Technology Transfer Block Exemption Regulation if the conditions set out therein are fulfilled ( 101 )

2.5. Conditions for exemption under the R&D BER

2.5.1. Access to the final results

108. The first condition for benefiting from the exemption under the R&D BER is that all parties have full access to the final results of the R&D for two purposes ( 102 ) (a) for conducting further research; and (b) for exploiting the results of the R&D.

109. According to the R&D BER, full access to the final results of the R&D shall also include any resulting intellectual property rights and know-how. It shall be granted as soon as the results of the R&D become available ( 103 )

110. Depending on their capabilities and commercial needs, the parties may make unequal contributions to their R&D cooperation. Therefore, in order to reflect, and to make up for, the differences in the value or the nature of the parties’ contributions, an R&D agreement may state that one party is to compensate another for obtaining access to the results for the purposes of further research or exploitation. Compensation is not mandatory, but if it is provided for in the R&D agreement then compensation must not be so high as to effectively impede full access to the results.

111. cannot be limited if such access is required for conducting further research ( 104 ). In order to qualify for an exemption under the R&D BER, the right of access to the results of the R&Dif such access is required for conducting

112. However, under certain circumstances, access to the results for the purposes of exploitation may be restricted and the R&D agreement may still benefit from exemption under the R&D BER. This is the case for R&D agreements with the following parties which may agree to confine their use of the results for the purposes of further research only (and therefore not for exploitation): (a) research institutes; (b) academic bodies; or (c) undertakings which supply R&D as a commercial service without normally being active in the exploitation of the results (105).

113. In addition, access to the results for the purposes of exploitation may also be limited where the parties limit their rights of exploitation in accordance with the R&D BER, in particular where they specialise in the context of exploitation ( 106 ) . This means that the parties will be allowed to impose restrictions upon each other regarding the exploitation of the results (such as restrictions in relation to certain territories, customers or fields of use).

2.5.2. Access to pre-existing know-how

114. The second condition for benefitting from the exemption under the R&D BER refers to access to pre-existing know-how. This condition only applies to R&D agreements that exclude the joint exploitation of the R&D results and is limited to know-how that is indispensible for the exploitation of the R&D results ( 107 )

115. Such agreements must stipulate that each party must be granted access to any pre-existing know-how of the other parties if this know-how is indispensable for the purposes of the party’s exploitation of the results. This does not mean that the parties have to include all their pre-existing know-how within the scope of the R&D agreement. However, they will have to identify the know-how that is indispensable for exploiting the results. The R&D agreement may provide that the parties compensate each other for giving access to their pre-existing know-how. Such compensation must, however, not be so high as to effectively impede such access ( 108 )

116. The condition to provide access to pre-existing know-how is without prejudice to the condition to provide full access to the results of the R&D set out in Article 3 of the R&D BER This means that a given R&D agreement may, under certain conditions, have to include provisions both as regards access to pre-existing know-how and as regards final results of the R&D, in order to benefit from the exemption.

2.5.3. Conditions linked to joint exploitation

117. The R&D BER includes two further conditions which concern the joint exploitation of the R&D results. As set out in Section 2.4.2, the scope of joint exploitation must be limited to R&D results that are protected by intellectual property rights or constitute know-how and which are indispensable for the production of the contract products or the application of the contract technologies.

118. Second, if the parties agree that each of them can distribute the contract products (and thus they have not opted for a joint distribution model and they have not agreed that only the party producing the contract products may distribute them), the parties charged with the production of the contract products by way of specialisation must be required to fulfil orders for supplies of the contract products from the other parties ( 109 )

2.5.4. Thresholds, market shares and duration of exemption

119. It can in general be presumed for the application of Article 101(3) of the Treaty, that below a certain level of market power the positive effects of R&D agreements will outweigh any negative effects on competition ( 110 )

120. The R&D BER relies on two metrics for capturing those R&D agreements that remain below a certain level of market power: (i) a market share threshold for undertakings competing for existing products and/or technologies; and (ii) a threshold for undertakings competing in innovation based on the existence of a minimum number of competing R&D efforts (three in addition to the one of the parties to the R&D agreement).

2.5.4.1. Undertakings competing for existing products and/or technologies and undertakings competing in innovation

121. In order to determine the competitive relationship between the parties, it is necessary to examine whether the parties could have been competing undertakings in the absence of the R&D agreement ( 111 )

122. In general, agreements between undertakings competing for an existing product and/or technology and agreements between undertakings competing in innovation pose a greater risk to competition than agreements between undertakings not competing with each other. Agreements between not competing undertakings will only in rare instances give rise to horizontal restrictive effects on competition ( 112 )

(A) UNDERTAKINGS COMPETING FOR AN EXISTING PRODUCT AND/OR TECHNOLOGY

123. For the purpose of the R&D BER, an ‘undertaking competing for an existing product and/or technology’ means an actual or a potential competitor: (a) ‘actual competitor’ is defined as an undertaking that is supplying an existing product or technology capable of being improved, substituted or replaced by the contract product or the contract technology on the relevant geographic market; whereas (b) ‘potential competitor’ is defined as an undertaking that, in the absence of the R&D agreement, on realistic grounds and not just as a mere theoretical possibility would be likely to undertake, within not more than 3 years, the necessary additional investments or incur the necessary costs to supply a product or technology capable of being improved, substituted or replaced by the contract product or contract technology on the relevant geographic market.

124. Potential competition has to be assessed on a realistic basis. For instance, parties cannot be defined as potential competitors simply because the cooperation enables them to carry out the R&D activities. The decisive question is whether each party independently has the necessary means as regards assets, know-how and other resources ( 113 )

125. R&D agreements covered by the R&D BER concerning existing products and/or technologies can for example take the following forms: (a) An R&D agreement between two undertakings that already supply an existing product capable of being improved, substituted or replaced by the product arising from the R&D cooperation (actual competitors); (b) An R&D agreement between (a) an undertaking that already supplies a product capable of being improved, substituted or replaced by the contract product (an actual competitor) and (b) an undertaking conducting R&D into a product and that would be likely to undertake the necessary additional investments to supply that product capable of being improved, substituted or replaced by the product arising from the R&D cooperation (contract product) on the relevant geographic market (potential competitor).

(B) UNDERTAKINGS COMPETING IN INNOVATION

126. For the purpose of the R&D BER, undertakings competing in innovation are undertakings that are not competing for an existing product and/or technology ( 114 ) and that independently engage, or in the absence of the R&D agreement would be able and likely to independently engage, in R&D efforts which concern: (a) R&D of the same or likely substitutable new products and/or technologies as the one(s) covered by the R&D agreement; or (b) R&D poles pursuing substantially the same aim or objective as the one(s) to be covered by the R&D agreement.

127. With regard to new products and/or technologies, if the R&D agreement concerns both new products and technologies, the parties shall assess whether they are undertakings competing both as regards the technology and the product that may be developed.

128. The assessment of likely substitutability of new products and/or technologies should focus on whether consumers, once the products and/or technologies enter the market, are likely to regard these new products and/or technologies as interchangeable or substitutable by reason of their characteristics ( 115 ) , their projected prices and their intended use.

129. In order to be seen as competing, R&D poles must pursue substantially the same aim or objective as the one(s) to be covered by the R&D agreement. This shall be determined based on reliable information concerning, for example, the nature and scope of the R&D effort.

130. R&D agreements between undertakings competing in innovation covered by the R&D BER can for example take the following forms: (a) an R&D agreement between (a) an undertaking developing a new product and (b) an undertaking developing the same or a likely substitute of such new product; (b) an R&D agreement between (a) an undertaking developing a new product and (b) an undertaking able and likely to independently engage (but not yet engaged) in the R&D of the same or a likely substitute of such new product; (c) an R&D agreement between (a) an undertaking engaged in an R&D effort which concerns an R&D pole and (b) an undertaking engaged in an R&D pole pursuing substantially the same aim or objective; (d) an R&D agreement between (a) an undertaking engaged in an R&D pole; and (b) an undertaking able and likely to independently engage (but not yet engaged) in an R&D pole pursuing substantially the same aim or objective.

(C) NOT COMPETING UNDERTAKINGS

131. The R&D BER defines ‘not competing undertaking’ as an undertaking that is neither an undertaking competing for an existing product and/or technology nor an undertaking competing in innovation. The parties to an R&D agreement would be considered as not competing undertakings in the case of, for example an undertaking engaged in R&D efforts for a product capable of being improved, substituted or replaced by the contract product and an undertaking conducting research in an R&D pole.

2.5.4.2. Agreements between undertakings competing for an existing product and/or technology

(A) MARKET SHARE THRESHOLDS FOR UNDERTAKINGS COMPETING FOR AN EXISTING PRODUCT AND/OR TECHNOLOGY

132. If two or more of the parties to the R&D agreement are competing undertakings for existing products and/or technologies, the exemption shall apply subject to a market share threshold of 25 %, calculated at the time the R&D agreement is entered into. This threshold applies in the following way, depending on whether the R&D agreement involves joint R&D or a paid-for R&D ( 116 ) (a) for R&D agreements involving joint R&D, the combined market share of the parties to the agreement shall not exceed 25 % on the relevant product and technology markets (117); (b) for R&D agreements involving paid-for R&D, the same market share threshold of 25 % applies but is extended not only to the financing party itself, but must also include all the parties with which the financing party has entered into R&D agreements with regard to the same contract products or contract technologies (118).

133. If the results of the joint or paid-for R&D are not jointly exploited , the exemption under the R&D BER applies for the duration of the R&D.

134. jointly exploited , the parties will continue to benefit from the exemption for seven years from the time the contract products or contract technologies are first put on the market within the internal market If, however, the results of the joint or paid-for R&D are, the parties will continue to benefit from the exemption for seven years from the time the contract products or contract technologies are first put on the market within the internal market ( 119 ) if the market share threshold was met (i) at the time of entering into the agreement pursuing joint or paid-for R&D and which includes joint exploitation ( 120 ) or (ii) for those R&D agreements under which the parties pursue the joint exploitation of the results of a prior agreement ( 121 ) , at the time of entering into such prior agreement ( 122 )

135. After the end of the seven year-period referred to in Article 6 paragraph 4 of the R&D BER, the exemption continues to apply as long as the combined market share of the parties does not exceed 25 % on the markets to which the contract products or contract technologies belong. This means that the parties would need to assess, at that moment in time, to which market the contract product or contract technologies belong and whether their combined market share does not exceed 25 %. If the combined market share rises above 25 % after the expiry of the seven year period, the exemption in the R&D BER continues to apply for two consecutive calendar years following the year in which the threshold was first exceeded ( 123 )

(B) CALCULATION OF MARKET SHARES FOR EXISTING PRODUCT AND TECHNOLOGY MARKETS

136. At the beginning of an R&D cooperation for an existing product and/or technology, the reference point is the existing market for products or technologies capable of being improved, substituted or replaced by the contract products or contract technologies.

137. improving, substituting or replacing existing products or technologies, market shares can be calculated with reference to existing products or technologies that will be improved, substituted or replaced. If the replacement of an existing product or technology will be significantly different, market shares with reference to existing products or technologies may be less informative but can still be used as a proxy to assess the market position of the parties. Alternatively, if market sales values are not available, the market share calculation may be based on other reliable market information, including expenditure in R&D If the R&D agreement aims atorproducts or technologies, market shares can be calculated with reference to existing products or technologies that will be improved, substituted or replaced. If the replacement of an existing product or technology will be significantly different, market shares with reference to existing products or technologies may be less informative but can still be used as a proxy to assess the market position of the parties. Alternatively, if market sales values are not available, the market share calculation may be based on other reliable market information, including expenditure in R&D ( 124 )

138. Under Article 7 paragraph 1(b) of the R&D BER, market shares must be calculated on the basis of data relating to the preceding calendar year ( 125 ) . For certain markets it may be necessary to calculate market shares on the basis of an average of the parties’ market shares of the last three preceding calendar years. This may be relevant for instance when there are bidding markets and the market shares may significantly change (e.g. from 0 % to 100 %) from one year to another, depending on whether a party was successful or not in the bidding process. This may also be relevant for markets characterised by large, lumpy orders for which the market share of the previous calendar year may not be representative, for example, if no large order took place in the preceeding calendar year. Another situation in which it may be necessary to calculate market shares on the basis of an average of the last three preceding calendar years is when there is a supply or demand shock in the calendar year preceding the cooperation agreement.

139. When it comes to the metrics for the calculation of market shares, the R&D BER provides that the calculation of market shares shall be based on the market sales value. If sales value data are not available, estimates based on other reliable market information, including market sales volumes, expenditure in R&D or R&D capabilities, may be used to establish the market share of the parties.

140. For technology markets one way to proceed is to calculate market shares on the basis of each technology’s share of total licensing income from royalties, representing a technology’s share of the market where competing technologies are licensed. An alternative approach is to calculate market shares on the technology market on the basis of sales of products or services incorporating the licensed technology on downstream product markets. Under that approach all sales on the relevant product market are taken into account, irrespective of whether the product incorporates a technology that is being licensed ( 126 )

2.5.4.3. Agreements for new products and/or technologies and R&D poles (127)

(A) THRESHOLD FOR NEW PRODUCTS AND/OR TECHNOLOGIES AND R&D POLES

141. If two or more of the parties to the R&D agreement are undertakings competing in innovation, the exemption shall apply if, at the time the R&D agreement is entered into, there are three or more competing R&D efforts in addition to and comparable with the R&D efforts of the parties to the R&D agreement ( 128 )

142. An R&D agreement between undertakings competing in innovation could also lead to results that the parties can agree to jointly exploit (the contract products or contract technologies). Whether or not the agreement includes such joint exploitation will have an impact on the duration of the exemption under the R&D BER.

143. If the results of the joint or paid-for R&D agreement concerning new products and/or technologies or R&D poles are not jointly exploited and the agreement meets the conditions for exemption under the R&D BER, the exemption applies for the duration of the R&D .

144. are jointly exploited , the parties will continue to benefit from the exemption for seven years from the time the resulting contract products or contract technologies are first put on the market within the internal market If, however, the results of the joint or paid-for R&D concerning new products and/or technologies or R&D poles, the parties will continue to benefit from the exemption for seven years from the time the resulting contract products or contract technologies are first put on the market within the internal market ( 129 ) . This applies if the agreement meets the conditions for exemption under the R&D BER ( 130 ) : (i) at the time of entering into the agreement pursing joint or paid-for R&D and which includes joint exploitation ( 131 ) or (ii) for those R&D agreements under which the parties pursue the joint exploitation of the results of a prior agreement ( 132 ) , at the time of entering into such prior agreement ( 133 )

145. After the end of the seven year period, the parties should be able to calculate their market shares on the markets of the resulting contract product or contract technology. The exemption will therefore continue to apply only as long as the combined market share of the parties does not exceed 25 % on the markets to which the contract products or contract technologies belong ( 134 ) . If the combined market share rises above 25 % after the expiry of the seven year-period, the exemption in the R&D BER continues to apply for two consecutive calendar years following the year in which the threshold was first exceeded ( 135 )

(B) ASSESSMENT OF THE EXISTENCE OF COMPETING AND COMPARABLE R&D EFFORTS

146. For an R&D cooperation concerning innovation to be exempted, the relevant threshold is based on the existence of three competing and comparable R&D efforts.

147. competing R&D efforts : It follows from the definition of competing R&D efforts in Article 1 paragraph 1(19) of the R&D BER ( 136 ) that the following elements need to be considered for identifying (a) whether the R&D efforts concern R&D of the same or likely substitutable new products and/or technologies or R&D poles pursuing substantially the same aim or objective as the ones to be covered by the R&D agreement; (b) whether there are third parties already engaged in the R&D efforts or able and likely to independently engage in such efforts; and (c) whether those third parties are independent from the parties to the R&D agreement.

148. First, when it comes to the question of whether the R&D efforts concern the same or likely substitutable new products and/or technologies or R&D poles pursuing substantially the same aim or objective this can be answered in the same way as for the assessment of undertakings competing in innovation set out in Section 2.5.4.1 above.

149. Second, competing R&D efforts can be those in which the third parties are already engaged , alone or in cooperation with other third parties. This means that the R&D effort can be pursued either on an individual basis by one third party or jointly by a number of different third parties. A competing R&D effort can also refer to those efforts in which a third party is able and likely to engage individually . Whether a third party is able and likely to individually engage in R&D of the same or likely substitutable new products and/or technologies or R&D poles pursuing substantially the same aim or objective as the ones to be covered by the R&D agreement can be determined on the basis of the third partys access to relevant financial and human resources, its intellectual property, know-how or other specialised assets or its previous R&D efforts.

150. Third, the question of whether the R&D efforts are pursued by third parties which are independent from the parties to the R&D agreement is meant to only include in the assessment such R&D efforts in which the parties to the R&D agreement are not involved.

151. assessment of comparability of competing R&D efforts with those of the parties to the R&D agreement, the R&D BER sets out that it shall be made on the basis of reliable information concerning elements such as (i) the size, stage and timing of the R&D efforts, (ii) third parties’ (access to) financial and human resources, their intellectual property, know-how or other specialised assets, their previous R&D efforts and (iii) the third parties’ capability and likelihood to exploit directly or indirectly possible results of their R&D efforts on the internal market When it comes to thewith those of the parties to the R&D agreement, the R&D BER sets out that it shall be made on the basis of reliable information concerning elements such as (i) the size, stage and timing of the R&D efforts, (ii) third parties’ (access to) financial and human resources, their intellectual property, know-how or other specialised assets, their previous R&D efforts and (iii) the third parties’ capability and likelihood to exploit directly or indirectly possible results of their R&D efforts on the internal market ( 137 )

152. The criteria have to be applied based on a case-by-case approach balancing the factors speaking in favour and those speaking against comparability. The aim of this balancing exercise is ultimately to establish that the competing R&D efforts impose a competitive constraint on the parties to the R&D agreement.

153. The first set of elements to assess the comparability are linked to the R&D efforts themselves . They concern the size, stage and timing of the R&D effort. This means, for instance, that if a third party’s competing R&D efforts have at least the same or similar size or are at a similar or more advanced stage of development than the R&D effort covered by the R&D agreement, they may impose a competitive constraint and this would speak in favour of comparability. Likewise, when it comes to timing, for example, a third party R&D effort that is six to eight years from market entry compared to an R&D effort of the parties to the R&D agreement that is one year from market entry may not be comparable.

154. The second set of elements are linked to the capability of the third party (or parties) pursuing the R&D effort. This concerns their (access to) financial and human resources, their intellectual property, know-how or other specialised assets or their previous R&D efforts. These elements are relevant for determining whether the resources and capabilities backing up the R&D efforts of third parties are comparable and therefore likely to have at least a similar development pace and outcome and thereby impose a competitive constraint. For example, a third party’s R&D effort may not be comparable if it lacks significantly the financial and human resources to pursue similar R&D efforts. Likewise, a third party’s previous successful experience in similar R&D projects as the one to be covered by the R&D agreement would speak in favour of comparability. Furthermore, in certain sectors, similar access to and/or ownership of relevant intellectual property rights (e.g. patents) or relevant know-how by the third party may also speak in favor of comparability.

155. The third set of elements are linked to the exploitation of the results. This refers to the third parties’ capability and likelihood (i.e. incentives to remain engaged to bring the results to the market) of exploiting possible results of the R&D effort on the internal market. This means, for instance, that R&D efforts that are likely to be exploited only outside of the EU with no prospect of reaching the internal market may not be comparable to the R&D efforts subject to the R&D agreement for which the results would be placed on the market in the internal market.

2.5.4.4. Agreements between not competing undertakings

156. not competing undertakings , the parties are not subject to any threshold not jointly exploited , the R&D agreement is exempted for the entire duration of the R&D. Where the parties to the R&D agreement are, the parties are not subject to any threshold ( 138 ) . If the R&D results are, the R&D agreement is exempted for the entire duration of the R&D.

157. If the R&D results are jointly exploited , the exemption continues to apply for seven years as of the moment the contract products or contract technologies are first put on the market within the internal market.

158. After the expiry of the seven year period, the parties should be able to calculate their market shares on the markets of the resulting contract product or contract technology. The exemption will continue to apply only as long as the combined market share of the parties does not exceed 25 % on the markets to which the contract products or contract technologies belong. If the combined market share rises above 25 % on one of these markets after the expiry of the seven year period, the exemption in the R&D BER continues to apply for two consecutive calendar years following the year in which the threshold was first exceeded ( 139 )

2.6. Hardcore and excluded restrictions

2.6.1. Hardcore restrictions

159. Article 8 of the R&D BER contains a list of hardcore restrictions. These are considered serious restrictions of competition that should in most cases be prohibited because of the harm they cause to the market and to consumers. R&D agreements that include one or more hardcore restrictions are excluded as a whole from the scope of the exemption provided for by R&D BER.

160. The hardcore restrictions listed in Article 8 of the R&D BER can be grouped into the following categories: (i) restrictions of the freedom of the parties to carry out other R&D efforts, (ii) limitations of output or sales and the fixing of prices, (iii) active and passive sales restrictions and (iv) other hardcore restrictions.

2.6.1.1. Restriction of the freedom of the parties to carry out other R&D efforts

161. Article 8 paragraph 1 of the R&D BER excludes from the exemption R&D agreements that entail restrictions of the parties’ freedom to carry out R&D independently or in cooperation with third parties, either: (a) in a field unconnected with that to which the R&D agreement relates, or (b) in the field to which the R&D agreement relates or in a connected field after the completion of the R&D.

162. In other words, the parties to an R&D agreement must at all times be free to carry out R&D efforts in unconnected fields from the ones covered by the R&D agreement. The parties must also, after the completion of the R&D covered by the R&D agreement, remain free to carry out R&D efforts in the field to which the R&D agreement relates or in a connected field. Otherwise, the R&D agreement will not benefit from the exemption under the R&D BER.

2.6.1.2. Limitation of output or sales and price fixing

163. Article 8 paragraph 2 of the R&D BER excludes from the exemption R&D agreements entailing limitations of output or sales. When competitors agree to limit how much each of them may produce or sell, this is normally a serious restriction of competition. However, the setting of production targets is not to be treated as a hardcore restriction where the joint exploitation of the results includes the joint production of the contract products ( 140 ) . Likewise, the setting of sales targets is not to be treated as a hardcore restriction where the joint exploitation of the results includes the joint distribution of the contract products or the joint licensing of the contract technologies and is carried out by a joint team, organisation or undertaking or is jointly entrusted to a third party ( 141 ) . This also applies to practices constituting specialisation in the context of exploitation ( 142 ) and certain non-compete obligations ( 143 )

164. Under Article 8 paragraph 3 of the R&D BER, the fixing of prices when selling products or the fixing of license fees when licensing technologies to third parties are also hardcore restrictions. However, the fixing of prices charged to immediate customers or the fixing of licence fees charged to immediate licensees where the joint exploitation of the results includes the joint distribution of the contract products or the joint licensing of the contract technologies and is carried out by a joint team, organisation or undertaking or is jointly entrusted to a third party, is not to be treated as a hardcore restriction.

2.6.1.3. Active and passive sales restrictions

165. Article 8 paragraphs 4, 5 and 6 of the R&D BER concern active and passive sales restrictions. With regard to R&D agreements, passive sales are defined in Article 1 paragraph 1(24) of the R&D BER as sales in response to unsolicited requests from individual customers, including delivery of products to the customer or customers, without having initiated the sale through actively targeting the particular customer, customer group or territory; passive sales include sales resulting from participating in private or public procurement tenders.

166. Active sales refers to all forms of selling other than passive sales, including: (a) actively targeting customers by visits, letters, emails, calls or other means of direct communication or through targeted advertising or promotion, offline or online, for instance by means of print or digital media, including online media, price comparison tools or advertising on search engines targeting customers in specific territories or customer groups; (b) offering on a website language options different than the ones commonly used on the territory in which the distributor is established; (c) offering a website with a domain name corresponding to a territory other than the one in which the distributor is established.

167. Article 8 paragraph 4 of the R&D BER removes the exemption of the R&D BER for R&D agreements containing passive sales restrictions. This covers any passive sale restriction as regards (a) the territory or (b) the customers where or to whom the parties may passively sell the contract products or license the contract technologies, but excludes the requirement to exclusively license the results to another party. The reason for this latter exception lies in the explicit possibility afforded to the parties that only one party produces and distributes the contract products on the basis of an exclusive licence granted by the other parties ( 144 )

168. Article 8 paragraph 5 of the R&D BER removes the exemption of the R&D BER for R&D agreements containing certain active sales restrictions. This is the case regarding a requirement not to make any, or to limit active sales of the contract products or contract technologies in territories or to customers which have not been exclusively allocated to one of the parties by way of specialisation in the context of exploitation.

169. This means that active sales must not be restricted between the parties, unless the parties allocate territories or customers to one of them following a specialisation in the context of exploitation ( 145 )

2.6.1.4. Other hardcore restrictions

170. The R&D BER includes two further hardcore restrictions. First, if the parties allocated territories between them or otherwise allocated customers by way of specialisation in the context of exploitation, it is a hardcore restriction to require one party to refuse to meet demand from customers allocated to the other party, if such customers would market the contract products or license the contract technologies in other territories within the internal market ( 146 )

171. Second, the requirement to make it difficult for users or resellers to obtain the contract products from other resellers within the internal market is also a hardcore restriction ( 147 )

2.6.2. Excluded restrictions

172. Article 9 of the R&D BER excludes certain obligations found in R&D agreements from the exemption provided by the R&D BER. These are obligations for which it cannot be assumed with sufficient certainty that they fulfil the conditions of Article 101(3). Unlike hardcore restrictions covered by Article 8 of the R&D BER, the excluded restrictions do not remove the benefit of the block exemption for the entire R&D agreement. This is, however, the case only if the restriction in question can be severed from the rest