Proposal for a Council Regulation (EC) amending Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty
Date: 1998-09-30
Institutions: European Commission
Subjects: competition policy, control of restrictive practices, exemption from restrictive-practice authorisation, single market, vertical agreement

C  365/30

EN

Official  Journal  of  the  European  Communities

26.11.98

concerted  practices;  such  period  must  not  be  shorter
than  six  months.

persons  claiming  a  legitimate  interest  withdraw  the
benefit  of  application  of  that  regulation.’

Where  in  any  particular  case  agreements  or  concerted
practices  to  which  a  regulation  adopted  pursuant  to
Article  1  applies  have  certain  effects  which  are  incom(cid:220)
patible  with  the  conditions  laid  down  in  Article  85(3)
of  the  Treaty  in  the  territory  of  a  Member  State,  or  in
a  part  thereof,  which  has  all  the  characteristics  of  a
distinct  market, 
that
Member  State  may  on  its  own  initiative  or  at  the
request  of  the  Commission  or  of  natural  or  legal

the  competent  authority 

in 

Article  2

This  Regulation  shall  enter  into  force  on  the  third  day
following  that  of  its  publication  in  the  Official  Journal  of
the  European  Communities.

This  Regulation  shall  be  binding 
directly  applicable  in  all  Member  States.

in 

its  entirety  and

Proposal  for  a  Council  Regulation  (EC)  amending  Regulation  No  17:  First  Regulation
implementing  Articles  85  and  86  of  the  Treaty

(98/C  365/07)

(Text  with  EEA  relevance)

COM(1998)  546  final  -  98/0288(CNS)

(Submitted  by  the  Commission  on  20  October  1998)

THE  COUNCIL  OF  THE  EUROPEAN  UNION,

Having  regard  to  the  Treaty  establishing  the  European
Community,  and  in  particular  Article  87  thereof,

Having  regard  to  the  proposal  from  the  Commission,

Having 
Parliament,

regard 

to 

the  opinion  of 

the  European

Having  regard  to  the  opinion  of  the  Economic  and
Social  Comittee,

thereto,  and 

the  only  parties  thereto  are  undertakings  from  one
Member  State  and  the  agreements,  decisions  or
practices  do  not  relate  either  to  imports  or  exports
between  Member  States,  or  where  not  more  than
the
two  undertakings  are  party 
agreements  only  restrict  the  freedom  of  one  party  to
the  contract  in  determining  the  prices  or  conditions
of  business  upon  which  the  goods  he  has  obtained
from  the  other  party  to  the  contract  may  be  resold;
whereas  this  exemption  is  not  therefore  such  as  to
cover  most  agreements  or  concerted  practices
between  undertakings  each  at  a  different  stage  of  the
economic  process 
the  supply  or
purchase,  or  both,  of  goods  for  resale  or  processing,
or  in  respect  of  the  marketing  of  services  ("vertical
agreements’),  that  are  likely  to  fall  within  the  scope
of  Article  85;

in  respect  of 

(1)(cid:217)Whereas  Article  4(2)  of  Regulation  No  17(cid:216)(˛),  as  last
amended  by  the  Act  of  Accession  of  Austria,  Finland
and  Sweden,  exempts  a  number  of  agreements,
the
concerted 
decisions 
requirement  of  notification  under  Article  4(1);

practices 

from 

and 

(2)(cid:217)Whereas 

to
agreements,  decisions  and  concerted  practices  where

this  exemption  relates 

in  particular 

(3)(cid:217)Whereas  on  22  January  1997 

the  Commission
published  a  Green  Paper  on  vertical  restraints  in  EC
competition  policy(cid:216)(ˇ)  which  was 
to
intended 
the
generate  a  wide(cid:220)ranging  public  debate  on 
application  of  Article  85(1)  and  (3)  of  the  Treaty  to
from
vertical  agreements;  whereas 
Member  States, 
the
Economic  and  Social  Committee,  the  Committee  of
the  Regions  and  interested  parties  in  business  and

the  European  Parliament, 

the  response 

(˛)(cid:217)OJ  13,  21.2.1962,  p.  204/62.

(ˇ)(cid:217)COM(96)  721  final.

26.11.98

EN

Official  Journal  of  the  European  Communities

C  365/31

the  legal  professions  has  been  generally  in  favour  of
reform  of  Community  competition  policy 
in  this
area;

(4)(cid:217)Whereas  any  such  reform  must  meet 

the 

in  order 

to  achieve 

in  respect  of 

firms;  whereas, 

to  declare,  by  regulation  and 

two
requirements  of  ensuring  effective  protection  of
competition  and  providing  adequate  legal  certainty
for 
these
objectives,  the  Commission  has  been  empowered  by
in
the  Council 
accordance  with  Article  85(3)  of  the  Treaty,  that
Article  85(1) 
is  not  applicable  to  categories  of
agreements  entered  into  by  two  or  more  under(cid:220)
takings,  each  operating  at  a  different  stage  of  the
the  supply  or
economic  process, 
purchase,  or  both,  of  goods  for  resale  or  processing,
or  in  respect  of  the  marketing  of  services,  including
exclusive 
exclusive
purchasing  agreements,  franchising  agreements  and
selective  distribution  agreements;  whereas  this  class
of  agreement  does  not  include  vertical  agreements
between  actual  or  potential  competitors,  unless  the
agreement  is  a  non(cid:220)reciprocal  one  and  none  of  the
parties  have  an  annual  turnover  exceeding  ECU  100
million,  or  is  between  an  association  of  retailers  and
its  members,  or  between  such  an  association  and  its
suppliers,  and  the  members  of  the  association  are
small  or  medium(cid:220)size  enterprises  as  defined  in  the
Recommendation
to 
Annex 
92/280/EC(cid:216)(˛).

Commission 

agreements, 

distribution 

(5)(cid:217)Whereas  the  Commission  was  also  called  upon  to
stipulate  the  circumstances  in  which,  having  regard
to  the  economic  effects  of  the  relevant  agreements,  a
block  exemption  Regulation  ceases  to  be  applicable;
whereas  such  reform  of  the  regulatory  framework
applicable  to  vertical  agreements  must  in  addition
take  account  of  the  need  to  simplify  administrative
supervision  and  as  far  as  possible  to  reduce  the
number  of  notifications  of  vertical  agreements,  which
are 
to
less 
competition 
than  horizontal  restrictive  practices;
whereas  it  should  no  longer  be  necessary  to  notify
vertical  agreements  before  they  can  be  exempted,  so
that  where  a  vertical  agreement  is  caught  by  Article
85(1)  and  satisfies  the  tests  of  Article  85(3)  the
Commission  can  exempt  it  with  effect  from  the  date
on  which  it  was  entered  into;

considered 

dangerous 

generally 

17 

are  dispensed 

(7)(cid:217)Whereas  the  agreements  referred  to  in  Article  4(2)  of
from 
the
Regulation  No 
requirement  of  notification  prior 
to  exemption;
whereas  the  purpose  of  this  dispensation  is  to  reduce
the
the  number  of  notifications,  which  enables 
Commission  to  concentrate  its  efforts  on  supervising
those  restrictive  agreements  which  are  the  most
damaging  to  competition;  whereas,  therefore,  this
amendment  does  not  entail  any  relaxation  in  the
supervision  which  the  Commission  has  a  duty  to
exercise  under  Article  89(1);

(8)(cid:217)Whereas  the  scope  of  Article  4(2)  of  Regulation  No
17  should  therefore  be  extended,  and  all  agreements
entered  into  by  two  or  more  undertakings,  each
operating  at  a  different  stage  of  the  economic
process,  in  respect  of  the  supply  or  purchase,  or
both,  of  goods  for  resale  or  processing,  or  in  respect
of  the  marketing  of  services,  should  be  exempted
from  the  requirement  of  prior  notification,

HAS  ADOPTED  THIS  REGULATION:

Article  1

Point  2  of  Article  4(2)  of  Regulation  No  17  is  replaced
by  the  following:

"(2)

the  agreements  or  concerted  practices  relate  to  the
supply  or  purchase,  or  both,  of  goods  for  resale  or
processing,  or  to  the  marketing  of  services,  and
the  agreements  or  concerted  practices  are  between
two  or  more  undertakings  each  operating  at  a
different  stage  of  the  economic  process;

(2a) not  more  than  two  undertakings  are  party  thereto,
and  the  agreements  only  impose  restrictions  on  the
exercise  of  the  rights  of  the  assignee  or  user  of
industrial  property  rights  -  in  particular  patents,
utility  models,  designs  or  trade  marks  -  or  of  the
person  entitled  under  a  contract  to  the  assignment,
or  grant,  of  the  right  to  use  a  method  of  manu(cid:220)
facture  or  knowledge  relating  to  the  use  and  to
the  application  of  industrial  processes;’.

(6)(cid:217)Whereas  the  current  arrangements  impose  on  firms
which  are  party  to  vertical  agreements  an  adminis(cid:220)
effect  on
trative  burden  which,  given 
to  be
competition,  has  proved 
excessive;

their 
in  most  cases 

Article  2

This  Regulation  shall  enter  into  force  on  the  third  day
following  that  of  its  publication  in  the  Official  Journal  of
the  European  Communities.

(˛)(cid:217)OJ  L  107,  30.4.1996,  p.  4.

This  Regulation  shall  be  binding 
directly  applicable  in  all  Member  States.

in 

its  entirety  and