Notice of the EFTA Surveillance Authority — Notice on agreements of minor importance which do not appreciably restrict competition under Article 53(1) of the EEA Agreement (de minimis)
Date: 2003-03-20
Institutions: EFTA Surveillance Authority
Subjects: EFTA, competition law, free-trade agreement, inter-company agreement

C 67/20

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Official Journal of the European Union

20.3.2003

EFTA SURVEILLANCE AUTHORITY

NOTICE OF THE EFTA SURVEILLANCE AUTHORITY

Notice on agreements of minor importance which do not appreciably restrict competition under
Article 53(1) of the EEA Agreement (de minimis)

(2003/C 67/06)

A. The present notice is issued pursuant to the rules of the
Agreement on the European Economic Area (EEA Agreement)
and the Agreement between the EFTA States on the estab-
lishment of a Surveillance Authority and a Court of Justice
(Surveillance and Court Agreement).

B. The European Commission has issued a notice entitled
‘Agreements of minor importance which do not appreciably
restrict competition under Article 81(1) of the Treaty estab-
(de minimis)’ (1). That
lishing
non-binding act defines when agreements between companies
are not prohibited by Article 81(1) of the EC Treaty (EC).

the European Community

the EEA competition rules

the above-
C. The EFTA Surveillance Authority considers
mentioned act to be EEA relevant. In order to maintain equal
conditions of competition and to ensure a uniform application
of
the European
Economic Area, the EFTA Surveillance Authority adopts the
present notice under the power conferred upon it by Article
5(2)(b) of the Surveillance and Court Agreement. It intends to
follow the principles and rules laid down in this notice when
applying the relevant EEA rules to a particular case.

throughout

D. The present notice replaces the Authority's previous notice
of 1998 on agreements of minor importance which do not fall
under Article 53(1) of the EEA Agreement (EEA) (2).

I

Article 53(1) EEA prohibits agreements between under-
1.
takings which may affect trade between the Contracting Parties
to the EEA Agreement and which have as their object or effect
the prevention, restriction or distortion of competition within
the territory covered by the EEA Agreement. The Court of
Justice of the European Communities has clarified that the

(1) OJ C 368, 22.12.2001, p. 13.
(2) OJ L 200, 16.7.1998, p. 55, and EEA Supplement to the Official

Journal 28, 16.7.1998, p. 13.

corresponding Article 81(1) EC is not applicable where the
the agreement on intra-Community trade or on
impact of
competition is not appreciable. By virtue of the provisions of
Article 6 EEA and Article 3 of the Surveillance and Court
Agreement this principle should also be applied to the inter-
pretation of Article 53(1) EEA, so that this provision is not
applicable where the impact on trade between the Contracting
Parties to the EEA Agreement or on competition is not appre-
ciable.

restriction of

In this notice the EFTA Surveillance Authority quantifies,
2.
is not an
with the help of market share thresholds, what
appreciable
competition under Article 53
EEA (3). This negative definition of appreciability does not
imply that agreements between undertakings which exceed
in this notice appreciably restrict
the thresholds
competition. Such agreements may still have only a negligible
effect on competition and may therefore not be prohibited by
Article 53(1) EEA (4).

set out

3.
Agreements may in addition not fall under Article 53(1)
EEA because they are not capable of appreciably affecting trade
between the Contracting Parties to the EEA Agreement. This
notice does not deal with this issue. It does not quantify what
does not constitute an appreciable effect on trade. It is however
and
acknowledged

agreements

between

small

that

Justice of

the Court of

(4) See for instance the judgment of

(3) The competence to handle individual cases falling under Article 53
EEA is divided between the EFTA Surveillance Authority and the
European Commission according to the rules laid down in Article
56 EEA. Only one authority is competent to handle any given case.
the
European Communities in Joined Cases C-215/96 and C-216/96
Bagnasco (Carlos) v Banca Populare di Novara and Casa di Risparmio
di Genova e Imperia [1999] ECR I-135, paragraphs 34 and 35. This
notice is also without prejudice to the principles for assessment
under Article 53(1) EEA as expressed in the EFTA Surveillance
Authority notice entitled ‘Guidelines on the applicability of Article
53 of the EEA Agreement to horizontal cooperation agreements’,
adopted by the Authority's Decision No. 393/01/COL of 6
December 2001 (OJ C 266, 31.10.2002, p. 1, and EEA Supplement
to the Official Journal 55, 31.10.2002, p. 1), in particular points 17
to 31 inclusive and in the EFTA Surveillance Authority notice
entitled ‘Guidelines on vertical restraints’(OJ C 122, 23.5.2002, p.
1) and EEA Supplement to the Official Journal 26, 23.5.2002, p. 3,
in particular points 5 to 20 inclusive.

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medium-sized undertakings, as defined in EFTA Surveillance
Authority Decision No 112/96/COL of 11 September
1996 (5), are rarely capable of appreciably affecting trade
between the Contracting Parties to the EEA Agreement. Small
and medium-sized undertakings are currently defined in that
decision as undertakings which have fewer than 250 employees
and have either an annual turnover not exceeding EUR 40
million or an annual balance-sheet
exceeding
EUR 27 million.

total not

4.
In cases covered by this notice the EFTA Surveillance
Authority will not institute proceedings either upon application
or on its own initiative. Where undertakings assume in good
faith that an agreement is covered by this notice, the Authority
will not impose fines. Although not binding on them, this
notice also intends to give guidance to the courts and auth-
orities of the EFTA States in their application of Article 53
EEA.

This notice also applies to decisions by associations of

5.
undertakings and to concerted practices.

6.
This notice is without prejudice to any interpretation of
Article 53 EEA and/or Article 81 EC which may be given by
the EFTA Court, the Court of Justice or the Court of First
Instance of the European Communities.

II

The EFTA Surveillance Authority holds the view that
7.
agreements between undertakings which affect trade between
to the EEA Agreement do not
the Contracting Parties
appreciably
competition within the meaning of
Article 53(1) EEA:

restrict

(a)

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, where the agreement is
made between undertakings which are actual or potential
competitors on any of these markets (agreements between
competitors) (6); or

(5) OJ L 42, 13.2.1997, p. 33 and EEA Supplement to the Official
Journal 7, 13.2.1997, p. 1. This decision corresponds
to
European Commission Recommendation 96/280/EC (OJ L 107,
30.4.1996, p. 4). It is anticipated that the European Commission
will revise its recommendation to increase the annual turnover
threshold from EUR 40 million to EUR 50 million and the
threshold from EUR 27 million to
annual balance-sheet
EUR 43 million.

total

(6) On what are actual or potential competitors,

the agreement,

in the absence of

see the EFTA
Surveillance Authority notice entitled ‘Guidelines on the applica-
bility of Article 53 of the EEA Agreement to horizontal cooperation
agreements’ (cf. footnote 4), paragraph 9. A firm is treated as an
actual competitor if it is either active on the same relevant market
is able to switch
or if,
production to the relevant products and market
them in the
short term without incurring significant additional costs or risks
in response to a small and permanent increase in relative prices
(immediately supply-side substitutability). A firm is treated as a
potential competitor if there is evidence that, absent the agreement,
this firm could and would be likely to undertake the necessary
additional investments or other necessary switching costs so that
it could enter the relevant market in response to a small and
permanent increase in relative prices.

it

(b) if the market share held by each of the parties to the
agreement does not exceed 15 % on any of the relevant
markets affected by the agreement, where the agreement is
made between undertakings which are not actual or
potential competitors on any of these markets (agreements
between non-competitors).

In cases where it is difficult to classify the agreement as either
an agreement between competitors or an agreement between
non-competitors, the 10 % threshold is applicable.

effect

foreclosure

of parallel networks

8. Where in a relevant market competition is restricted by
the cumulative effect of agreements for the sale of goods or
services entered into by different suppliers or distributors
(cumulative
of
agreements having similar effects on the market), the market
share thresholds under point 7 are reduced to 5 %, both for
agreements between competitors and for agreements between
non-competitors.
Individual suppliers or distributors with a
market share not exceeding 5 % are in general not considered
to contribute significantly to a cumulative foreclosure effect (7).
A cumulative foreclosure effect is unlikely to exist if less than
30 % of the relevant market is covered by parallel (networks of)
agreements having similar effects.

9.
The EFTA Surveillance Authority also holds the view that
agreements are not restrictive of competition if the market
shares do not exceed the thresholds of respectively 10 %,
15 % and 5 % set out in point 7 and 8 during two successive
calendar years by more than two percentage points.

In order to calculate the market share, it is necessary to
10.
determine the relevant market. This consists of the relevant
product market and the relevant geographic market. When
defining the relevant market, reference should be had to the
EFTA Surveillance Authority's notice on the definition of the
relevant market for the purposes of EEA competition law (8).
The market shares are to be calculated on the basis of sales
value data or, where appropriate, purchase value data. If value
data are not available, estimates based on other reliable market
information, including volume data, may be used.

(7) See also the EFTA Surveillance Authority notice entitled ‘Guidelines
on vertical restraints’
(OJ C 122, 23.5.2002, p. 1), and EEA
Supplement to the Official Journal 26, 23.5.2002, p. 7, in particular
paragraphs 73, 142, 143 and 189. While in the guidelines on
vertical restraints in relation to certain restrictions reference is
made not only to the total but also to the tied market share of a
particular
share
thresholds refer to total market shares.

in this notice all market

supplier or buyer,

(8) OJ L 200, 16.7.1998, p. 55, and EEA Supplement to the Official

Journal 28, 16.7.1998, p. 3.

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Points 7, 8 and 9 do not apply to agreements

11.
containing any of the following hardcore restrictions:

(1) as regards agreements between competitors as defined in
in
point 7,
restrictions which, directly or
isolation or in combination with other factors under the
control of the parties, have as their object (9):

indirectly,

(a) the fixing of prices when selling the products to third

parties;

(b) the limitation of output or sales;

(c) the allocation of markets or customers;

(2) as regards agreements between non-competitors as defined
in point 7, restrictions which, directly or indirectly,
in
isolation or in combination with other factors under the
control of the parties, have as their object:

(a) the restriction of the buyer's ability to determine its sale
price, without prejudice to the possibility of
the
supplier imposing a maximum sale price or recom-
mending a sale price, provided that
they do not
amount to a fixed or minimum sale price as a result
of pressure from, or incentives offered by, any of the
parties;

(b) the restriction of the territory into which, or of the
customers to whom, the buyer may sell the contract
goods or services, except
the following restrictions
which are not hardcore:

— the restriction of active sales into the exclusive
customer group
to an exclusive
territory or
reserved to the
supplier or allocated by the
supplier to another buyer, where such a restriction
does not limit sales by the customers of the buyer,

— the restriction of sales to end users by a buyer

operating at the wholesale level of trade,

— the restriction of sales to unauthorised distributors
by the members of a selective distribution system,
and

— the

the buyer's

restriction of

ability to sell
components, supplied for the purposes of incor-
to customers who would use them to
poration,
manufacture the same type of goods as those
produced by the supplier;

(c) the restriction of active or passive sales to end users by
members of a selective distribution system operating at
the retail level of trade, without prejudice to the possi-
bility of prohibiting a member of the system from
operating out of an unauthorised place of estab-
lishment;

(d) the restriction of cross-supplies between distributors
including
levels of

distribution system,
within a
between distributors operating at different
trade;

selective

(e) the

a

agreed

between

restriction

of
components and a buyer who incorporates
those
components, which limits the supplier's ability to sell
the components as spare parts to end users or to
repairers or other service providers not entrusted by
the buyer with the repair or servicing of its goods;

supplier

(3) as regards agreements between competitors as defined in
point 7, where the competitors operate, for the purposes of
the agreement, at a different level of the production or
distribution chain, any of the hardcore restrictions listed
in paragraphs 1 and 2 above.

12.

(1) For the purposes of this notice, the terms ‘undertaking’,
‘party to the agreement’, ‘distributor’, ‘supplier’ and ‘buyer’
shall include their respective connected undertakings.

(2) ‘Connected undertakings’ are:

(a) undertakings

in which a party to the agreement,

directly or indirectly:

— has the power to exercise more than half the voting

rights, or

— has the power
members of
management or bodies
undertaking, or

the

to appoint more than half

the
supervisory board, board of
legally representing the

(9) Without prejudice to situations of joint production with or without
joint distribution, as defined in Article 5(2), of the act referred to in
point 6 of Annex XIV to the EEA Agreement and Article 5(2), of
the act referred to in point 7 of Annex XIV to the EEA Agreement
(respectively Commission Regulation (EC) No 2658/2000, and
Commission Regulation (EC) No 2659/2000 (OJ L 304, 5.12.2000,
pp. 3 and 7).

— has the right to manage the undertaking's affairs;

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

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

(d) undertakings

in which a party to the agreement
together with one or more of
the undertakings
referred to in (a), (b) or (c), or in which two or more
of the latter undertakings,
jointly have the rights or
powers listed in (a);

(e) undertakings in which the rights or the powers listed in

(a) are jointly held by:

— parties

respective
agreement or
connected undertakings referred to in (a) to (d), or

to the

their

— one or more of the parties to the agreement or one
or more of their connected undertakings referred to
in (a) to (d) and one or more third parties.

(3) For the purposes of paragraph 2(e), the market share held
by these jointly held undertakings shall be apportioned
equally to each undertaking having the rights or
the
powers listed in paragraph 2(a).