Communication inviting third parties to submit observations on draft Commission notices (Text with EEA relevance)
Date: 2003-10-10
Institutions: European Commission
Subjects: European Commission, competition law, consultation procedure, drafting of EU law

C 243/10

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Official Journal of the European Union

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Communication inviting third parties to submit observations on draft Commission notices

(2003/C 243/04)

(Text with EEA relevance)

The Commission invites all interested parties to send their comments on the following texts:

1. Draft Commission Notice on cooperation within the Network of Competition Authorities;

2. Draft Commission Notice on the cooperation between the Commission and the courts of the EU

Member States in the application of Articles 81 and 82 EC;

3. Draft Commission Notice on the handling of complaints by the Commission under Articles 81 and 82

of the EU Treaty;

4. Draft Notice on informal guidance relating to novel questions concerning Articles 81 and 82 of the EC

Treaty that arise in individual cases (guidance letters);

5. Draft Commission Notice — Guidelines on the effect on trade concept contained in Articles 81 and 82

of the Treaty;

6. Draft Commission Notice — Guidelines on the application of Article 81(3) of the Treaty.

These comments should be sent to the Commission not later than eight weeks after the date of the
publication in the Official Journal of the European Union. It is standard Commission practice to publish
the submissions received in response to a public consultation. However it is possible to request that
submissions or parts thereof remain confidential. Should this be the case, please indicate clearly on the
front page of the submission that you request it should not be made publicly available. In this case a
non-confidential version of the submission should also be forwarded to the Commission for publication.
Comments should be sent either by e-mail to:

COMP-MODERNISATION-PACKAGE@cec.eu.int

Or in writing to:

European Commission
Directorate-General for Competition
Unit A 3 –– European Competition Network
Modernisation package
B-1049 Brussel.

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Draft Commission Notice on cooperation within the Network of Competition Authorities

I. INTRODUCTION

the Member

the Commission

and
(hereafter

1. Council Regulation (EC) No 1/2003 (hereafter the ‘Council
Regulation’) creates a system of parallel competences in
States'
which
‘NCAs’) (1)
competition authorities
the
can
the EC Treaty.
apply Article 81 and Article 82 of
Together the NCAs and the Commission form a network
of public authorities: they act in the public interest and
cooperate closely in order to protect competition. The
network is a forum for discussion and cooperation for
the enforcement of EC competition policy. It provides a
framework for the cooperation of European competition
authorities in cases where Articles 81 and 82 of the EC
Treaty are applied and is the basis for the maintenance of
a common competition culture in Europe. The network is
called ‘European Competition Network’ (ECN).

2. The structure of the NCAs varies between Member States.
In some Member States, one body investigates cases and
takes all types of decisions. In other Member States, the
functions are divided between two bodies, one which is in
charge of the investigation of the case and another, often a
college, which is responsible for deciding the case. Finally,
in certain Member States, prohibition decisions and/or
decisions imposing a fine can only be taken by a court:
the competition authority acts as a prosecutor bringing the
case before that court. Subject to the general principle of
effectiveness, Article 35 of the Council Regulation allows
Member States to choose the body or bodies which will be
designated as national competition authorities and to
allocate functions between them. Under general principles
of Community law, Member States are under an obligation
to set up a sanctioning system providing for sanctions
which are effective, proportionate and dissuasive for
infringements of EC law. The enforcement systems of the
Member States differ but
recognised the
standards of each other's system as a basis for coop-
eration (2).

they have

3. The network formed by the competition authorities should
ensure both an efficient division of work and an effective
and consistent application of EC competition rules. The
Council Regulation together with the joint statement of
the Council and the Commission on the functioning of
the main
the European Competition Network sets out
principles of the functioning of the network. This notice
presents the details of the system.

law for companies. Each competition authority remains
fully responsible for ensuring the due process of cases it
deals with.

II. DIVISION OF WORK

A. Principles of allocation

5. The Council Regulation is based on a system of parallel
competences in which all competition authorities have the
power to apply Articles 81 or 82 of the EC Treaty and are
responsible for an efficient division of work with respect
to those cases where an investigation is deemed to be
the same time each network member
necessary. At
retains full discretion in deciding whether or not to inves-
tigate a case. Under this system of parallel competences,
cases will be dealt with by:

— a single NCA, possibly with the assistance of NCAs of

other Member States; or

— several NCAs acting in parallel; or

— the Commission.

6. In most instances the authority that receives a complaint
or starts an ex-officio-proceeding will remain in charge of
the case. Re-allocation of a case would only be envisaged
at the outset of proceedings (see paragraph 18) where
either this authority considers that it is not well placed
to act or where other authorities consider themselves
also well placed to act (see points 8 to 15 below).

of

protection

competition

7. Where re-allocation is found to be necessary for an
effective
the
Community interest, network members will endeavour to
re-allocate cases
to a single well placed competition
authority as often as possible (3). In any event, re-allocation
should be a quick and efficient process and will not hold
up ongoing investigations.

and

of

8. An authority can be considered to be well placed to deal
with a case if the following three cumulative conditions
are met:

4. Consultations and exchanges within the network is a
matter between public enforcers and does not alter any
rights or obligations arising from Community or national

foreseeable

1. the agreement or practice has substantial direct actual
or
effects on competition within its
territory, is implemented within or originates from its
territory;

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2. the authority is able to effectively bring to an end the
entire infringement i.e. it can adopt a cease and desist
order the effect of which will be sufficient to bring an
end to the infringement and it can, where appropriate,
sanction the infringement adequately;

competition mainly in their respective territories and the
action of only one NCA would not be sufficient to bring
the entire infringement to an end and/or to sanction it
adequately.

3.

it can gather, possibly with the assistance of other auth-
orities, the evidence required to prove the infringement.

for

in order

considered well placed.

9. The above criteria indicate that a material link between the
infringement and the territory of a Member State must
that Member State's competition
exist
can be
authority to be
expected that
those
substantially
Member
affected by an infringement will be well placed provided
they are capable of effectively bringing the infringement to
an end through either single or parallel action unless the
Commission is better placed to act (see below paragraphs
14 and 15).

in most cases the authorities of
competition

States where

is

It

10. It follows that a single NCA is usually well placed to deal
substantially affect

with agreements or practices
competition mainly within its territory.

that

Example 1: Undertakings situated in Member State A are
involved in a price fixing cartel on products that are mainly
sold in Member State A.

The NCA in A is well placed to deal with the case.

11. Furthermore single action of an NCA might also be appro-
priate where, although more than one NCA can be
regarded as well placed, the action of a single NCA is
sufficient to bring the entire infringement to an end.

Example 2: Two undertakings have set up a joint venture in
in
Member State A. The joint venture provides
Member States A and B and gives rise to a competition
problem. A cease and desist order
considered to be
sufficient
to deal with the case effectively because it can
bring an end to the entire infringement. Evidence is located
mainly at the offices of the joint venture in Member State A.

services

is

Example 3: Two undertakings agree on a market sharing
agreement, restricting the activity of the company located in
Member State A to Member State A and the activity of the
company located in Member State B to Member State B.

The NCAs in A and B are well placed to deal with the case
in parallel, each one for its respective territory.

13. The authorities dealing with a case in parallel action may
find it useful to designate one of them as a lead authority
and may agree to delegate tasks to the lead authority such
as for example the coordination of investigative measures
and the information of the parties involved.

14. The Commission is particularly well placed if one or
several agreement(s) or practice(s), including networks of
similar
on
competition in more than three Member States (cross-
border markets covering more than three Member States
or several national markets).

agreements

practices,

effects

have

or

Example 4: Two undertakings agree to share markets or fix
prices
the Community. The
territory of
Commission is well placed to deal with the case.

the whole

for

Example 5: An undertaking, dominant
in four different
national markets, abuses its position by imposing fidelity
rebates on its distributors
these markets. The
Commission is well placed to deal with the case. It could
also deal with one national market so as to create a ‘leading’
case and other national markets could be dealt with by NCAs
particularly if
requires a separate
assessment.

each national market

in all

The NCAs in A and B are both well placed to deal with the
case but single action by the NCA in A would be sufficient
and more efficient than single action by the NCA in B or
parallel action by both NCAs.

12. Parallel action by two or three NCAs may be appropriate
where an agreement or practice has substantial effects on

15. Moreover, the Commission is to be considered particularly
well placed if Community interest requires the adoption of
a Community decision to develop Community competition
policy or to ensure effective enforcement or if a case is
closely linked to other Community provisions which are
more efficiently applied by the Commission or for which
the Commission has exclusive competence.

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B. Mechanisms of cooperation for the purpose of case

allocation and assistance

1. Information at the beginning of the procedures (Article

11(3))

the members of

16. In order to detect multiple proceedings and to ensure that
cases are dealt with by a well placed competition
authority,
the network have to be
informed at an early stage of the cases pending before
the various competition authorities. If a case is to be real-
located,
the
network and of the undertakings concerned that the real-
location takes place quickly.

is indeed in the best

interest both of

it

17. The Council Regulation creates a mechanism for

the
competition authorities to inform each other in order to
ensure an efficient and quick re-allocation of cases. Article
11(3) of the Regulation lays down an obligation for NCAs
to inform the Commission before or without delay after
commencing the first formal investigative measure. It also
states that the information may be made available to other
NCAs (4). The rationale of Article 11(3) is to allow the
network to detect multiple proceedings and address
possible case re-allocation issues as soon as an authority
starts investigating a case. Information should therefore be
provided before or just after any step similar to the
measures of investigation that can be undertaken by the
Commission under Articles 18 to 21 of the Council Regu-
lation is/has been taken. The obligation to inform the
Commission applies in all cases where Article 81 or
Article 82 of the EC Treaty is applied. The Commission
has an equivalent obligation by virtue of Article 11(2) of
the Regulation.

18. Where case re-allocation issues arise,

they should be
resolved swiftly, normally within a period of two months
starting from the date of the first information sent to the
network pursuant to Article 11, paragraph 2 or 3. During
this period, competition authorities will endeavour
to
reach an agreement on a possible re-allocation and,
where relevant, on the modalities for parallel action.

19. In general, the competition authority or authorities that
is/are dealing with a case at the end of the re-allocation
period should continue to deal with the case until the
completion of
the proceedings. Re-allocation of a case
after the initial allocation period of two months should
only occur where the facts known about the case change
materially during the course of the proceedings.

2. Stay or closure of proceedings (Article 13)

20. If the same agreement or practice is brought before several
competition authorities, be it because they have received a

complaint or have opened a procedure on their own
initiative, Article 13 of the Council Regulation provides
a legal basis for suspending a proceeding or rejecting a
complaint on the grounds that another authority is dealing
with the case or has dealt with the case. In Article 13,
‘dealing with the case’ does not merely mean that a
complaint has been lodged with another authority.
It
means that
the other authority is investigating or has
investigated the case on its own behalf.

21. Article 13 applies when another authority has dealt with
or foresees to deal with the competition issue raised by the
complainant, even if the authority in question has acted or
acts on the basis of a complaint lodged by a different
complainant or as a result of an ex-officio-proceeding.
This implies that Article 13 can be invoked when the
agreement or practice involves the same infringement(s)
on the same relevant geographic and product markets.

case. On the other hand,

the
rejected for other

22. An NCA may suspend or close its proceedings but it has
no obligation to do so. Article 13 leaves scope for
appreciation of the peculiarities of each individual case.
if a complaint was rejected
This flexibility is important:
by an authority following an investigation of
the
substance of the case, another authority may not want
a
to re-examine
complaint was
the
authority was unable to collect the evidence necessary to
prove the infringement), another authority may wish to
carry out its own investigation and deal with the case.
This flexibility is also reflected, for pending cases, in the
choice open to each NCA as to whether it closes or
suspends its proceedings. An authority may be unwilling
to close a case before the outcome of another authority's
proceedings is clear. The ability to suspend its proceedings
allows the authority to retain its ability to decide at a later
point whether or not to terminate its proceedings. Such
flexibility also facilitates consistent application of the rules.

reasons

(e.g.

if

23. Where an authority closes or

suspends proceedings
because another authority is dealing with the case,
it
may transfer the information provided by the complainant
to the authority which is to deal with the case on the basis
of Article 12 of the Council Regulation.

24. Article 13 can also be applied to part of a complaint or to
part of a proceeding.
It may be that only part of a
complaint or of an ex-officio proceeding overlaps with a
case already dealt or being dealt with by another
the competition
competition authority.
authority to which the complaint is brought is entitled
to reject part of the complaint on the basis of Article 13
and to deal with the rest of the complaint in an appro-
priate manner. The same principle applies to the termi-
nation of proceedings.

In that case,

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25. Article 13 is not the only legal basis for suspending or
closing ex officio proceedings or rejecting complaints.
NCAs may also be able to do so according to their
national procedural law. The Commission may also reject
for lack of Community interest or other
a complaint
reasons pertaining to the nature of the complaint (5).

3. Exchange and use of confidential information (Article

12)

26. A key element of the functioning of the network is the
power of all the competition authorities to exchange and
use information (including documents, statements and
digital
information) which have been collected by them
for the purpose of applying Article 81 or Article 82 of
the EC Treaty. This power is a precondition for efficient
and effective allocation and handling of cases.

27. Article 12 of the Council Regulation states that for the
the EC
purpose of applying Articles 81 and 82 of
Treaty, the Commission and the competition authorities
of the Member States shall have the power to provide
one another with and use in evidence any matter of fact
or of law, including confidential information. This means
that exchanges of information may not only take place
between an NCA and the Commission but also between
and amongst NCAs. Article 12 takes precedence over any
contrary law of a Member State.

28. This exchange of information contains, however, a number

of safeguards for undertakings and individuals.

(a) First, Article 28 states that ‘the Commission and the
competition authorities of the Member States, their
officials and other servants (. . .) shall not disclose
information acquired or exchanged by them pursuant
to the’ Council Regulation which is ‘of
the kind
covered by the obligation of professional secrecy’.
However,
the legitimate interest of undertakings in
secrets may not
their business
the protection of
prejudice the disclosure of information necessary to
prove an infringement of Articles 81 and 82 of the
EC Treaty (see Article 27(2) of Regulation (EC) No
secrecy’ used in
1/2003). The term ‘professional
Article 28 of the Council Regulation is a Community
law concept and covers in particular business secrets
and other confidential information. This will create a
common minimum level of protection throughout the
Community.

subject matter

(b) The second safeguard given to undertakings relates to
the use of
information which has been exchanged
within the network. Under Article 12(2), information
so exchanged can only be used in evidence for the
application of Articles 81 and 82 of the EC Treaty
for which it was
and for
the
collected (6). According
the
information exchanged may also be used for
the
purpose of applying national competition law in
in the same case. This is, however, only
parallel
possible if the application of national
law does not
lead to an outcome as regards the finding of an
infringement different
from that under Articles 81
and 82 of the EC Treaty.

to Article

12(2),

(c) The third safeguard given by the Council Regulation
relates to sanctions on individuals on the basis of
information exchanged pursuant
to Article 12(1).
for
Regulation (EC) No 1/2003 only provides
sanctions on undertakings for violations of Articles
81 and 82. Some national
laws also provide for
sanctions on individuals in connection with violations
of Articles 81 and 82. Individuals enjoy normally more
extensive rights of defence (e.g. a right to remain silent
compared to undertakings which may only refuse to
answer questions which would lead them to admit that
they have committed an infringement (7)). Article 12(3)
ensures that information collected from undertakings
cannot be used in a way which would circumvent the
higher protection of
individuals. This provision
precludes sanctions being imposed on individuals on
the basis of information exchanged pursuant to the
Regulation if the transmitting and the receiving auth-
orities do not provide for sanctions of a similar kind in
respect of individuals unless the rights of the individual
concerned have been respected by the transmitting
authority to the same standard as they are guaranteed
by the receiving authority as regards the collection of
evidence. The qualification of the sanctions by national
law (‘administrative’ or ‘criminal’) is not relevant for the
purpose of applying Article 12(3). The Regulation
to create a distinction between sanctions
intends
which result in custody and other types of sanctions
such as
fines on individuals and other personal
sanctions. If both the legal system of the transmitting
and of the receiving authority provide for sanctions of
the same kind (e.g. in both Member States, fines can be
imposed on a member of the staff of an undertaking
who has been involved in the violation of Article 81 or
82), information exchanged pursuant to Article 12 can
be used by the receiving authority.
In that case,
procedural safeguards in both systems are considered
to be equivalent.
If on the other hand, both legal
systems do not provide for sanctions of a similar
kind, the information can only be used if the same
level of protection of the rights of the individual has
been respected in the case at hand (see Article 12(3) of
Regulation (EC) No 1/2003).
latter case
however, custodial sanctions can only be imposed
where both the
receiving
transmitting
authority have the power to impose such sanction.

and the

In that

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4. Investigations (Article 22)

29. The Council Regulation foresees the possibility for an NCA
to ask another NCA for assistance in order to collect
information on its behalf. An NCA can ask another NCA
to carry out fact-finding measures on its behalf. Article 12
of the Council Regulation empowers the assisting NCA to
transmit the information it has collected to the requesting
NCA. Any exchange between or amongst NCAs and use in
evidence by the requesting NCA of such information shall
be carried out in accordance with Article 12 of the Regu-
lation. Where an NCA acts on behalf of another NCA, it
acts pursuant to its own rules of procedure, and under its
own powers of investigation.

30. Under Article 22(2), the Commission can request an NCA
to carry out an inspection on its behalf. The Commission
can either adopt a decision pursuant to Article 20(4) or
simply issue a request to the NCA. The agents of the
Commission may assist the NCA during the inspection.

C. Position of undertakings

1. General

31. All network members will endeavour to make allocation of
cases a quick and efficient process. Given the fact that the
Council Regulation has created a system of parallel
the allocation of cases between members
competences,
of
labour
where some authorities abstain from acting. Allocation
of cases therefore does not create individual rights for
companies involved in or affected by an infringement to
have a case dealt with by a particular authority.

the network constitutes a mere division of

32. If a case is re-allocated to a given competition authority, it
is because the application of the allocation criteria set out
above led to the conclusion that this authority is well
placed to deal with the case by single or parallel action.
The competition authority to which the case is re-allocated
would have been in a position, in any event, to commence
ex officio proceedings against the infringement.

33. Furthermore, all competition authorities apply Community
competition law and the Council Regulation sets out
mechanisms to ensure that
the rules are applied in a
consistent way.

34. If a case is reallocated within the network, the under-
takings concerned and the complainant(s) are informed

soon as possible by the

as
involved.

competition authorities

2. Position of complainants

the

investigate

35. If a complaint is lodged with the Commission pursuant to
Article 7 of the Council Regulation and if the Commission
does not
the
agreement or practice complained of,
the complainant
has a right to obtain a decision rejecting his complaint
the Commission
without prejudice to Article 7(3) of
implementing regulation (8). The rights of complainants
who lodge a complaint with an NCA are governed by
the applicable national law.

complaint or prohibit

suspending or
another

36. In addition, Article 13 of the Council Regulation gives all
rejecting a
the possibility of
NCAs
complaint on the ground that
competition
authority is dealing or has dealt with the same case.
That provision also allows the Commission to reject a
complaint on the ground that a competition authority of
a Member State is dealing or has dealt with the case.
Article 12 allows the transfer of
information between
competition authorities inside the network subject to the
safeguards provided in that Article (see paragraph 28).

3. Position of applicants claiming the benefit of a leniency

programme

favourable treatment

37. The Commission considers (9) that it is in the Community
to undertakings
interest
to grant
in the investigation of cartel
which cooperate with it
infringements. A number of Member States have also
adopted leniency programmes (10) relating to cartel inves-
tigations. The aim of these leniency programmes is to
facilitate the detection by competition authorities of
cartel activity and also thereby to act as a deterrent to
participation in unlawful cartels.

38. An application for leniency to a given authority is not to
be considered as an application for leniency to any other
authority. It is therefore in the interest of the applicant to
apply for leniency to all competition authorities which
have competence to apply Article 81 of the EC Treaty in
the territory which is affected by the infringement and
which may be considered well placed to act against the
infringement in question (11). In view of the importance of
timing in most existing leniency programmes, applicants
will also need to consider whether it would be appropriate
to file leniency applications with the relevant authorities
simultaneously. It is for the applicant to take the steps
which it considers appropriate to protect
its position
with respect to possible proceedings by these authorities.

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39. As for all cases where Articles 81 and 82 are applied,
where an NCA deals with a case which has been
initiated as a result of a leniency application,
it must
inform the Commission and may make the information
available to other members of the network pursuant to
Article 11(3). The Commission has an equivalent obli-
gation by virtue of Article 11(2) of the Regulation.
In
such cases, however,
information submitted to the
network pursuant
to Article 11 will not be used by
other members of the network as the basis for starting
an investigation on their own behalf whether under the
competition rules of the Treaty or, in the case of NCAs,
under their national competition or other laws. This is
without prejudice to any power of the authority to open
an investigation on the basis of information received from
other sources (12).

40. Save

as provided below (13),

information voluntarily
submitted by a leniency applicant will only be transmitted
to another member of the network pursuant to Article 12
with the consent of the applicant. Other information that
has been obtained as a result of an inspection or other
fact-finding measure which could not have been carried
out except as a result of the leniency application will
also not be transmitted to another authority pursuant to
Article 12 unless the applicant has consented to the trans-
mission to that authority of information it has voluntarily
submitted in its application for leniency. The network
members will encourage leniency applicants to give such
consent, in particular as regards disclosure to authorities in
respect of which it would be open to the applicant to
obtain lenient treatment. Once the leniency applicant has
given consent
information to
to the transmission of
another authority, that consent may not be withdrawn.
This paragraph is without prejudice, however,
to the
responsibility of each applicant to file leniency applications
to whichever authorities it may consider appropriate.

(b) on any other legal or natural person covered by the
favourable treatment offered by the transmitting
authority as a result of the application made by
the applicant under its leniency programme;

(c) on any employee or former employee of any of the

persons covered by (a) and (b).

A copy of the receiving authority's written commitment
will be provided to the applicant.

3. In the case of

information collected by a network
member under Article 22(1) on behalf of and for the
account of the network member to whom the leniency
application was made, no consent is required for the
transmission of such information to, and its use by, the
network member to whom the application was made.

42. The principles

set out above will be abided by the
Commission and by the network members who will
have committed themselves to respect them.

III. CONSISTENT APPLICATION OF

EC

COMPETITION

RULES (14)

A. Mechanism of cooperation (Articles 11(4) and

11(5))

43. Within the network of

the
Commission has the ultimate but not the sole responsi-
bility for ensuring consistent application of EC competition
law.

competition authorities

41. Notwithstanding the above, the consent of the applicant
for the transmission of information to another authority
pursuant
the
following circumstances:

to Article 12 is not required in any of

1. No consent is required where the receiving authority
has also received a leniency application relating to the
same infringement
from the same applicant as the
transmitting authority, provided that at the time the
is not open to the
information is
applicant to withdraw the information which it has
submitted to that receiving authority.

transmitted it

2. No consent is required where the receiving authority
has provided a written commitment not to use either
any information transmitted to it or
any other
information it may obtain following the date and
transmission as noted by the transmitting
time of
authority, to impose sanctions:

(a) on the leniency applicant;

44. According to Article 11(4), no later than 30 days before
adopting a decision of application of Article 81 or 82
requiring that an infringement be brought
to an end,
accepting commitments or withdrawing the benefit of a
inform the
block-exemption regulation, NCAs
Commission. They have to send to the Commission, at
the latest 30 days before the adoption of the decision, a
in the
summary of the case, the envisaged decision or,
absence
indicating the
thereof, any other document
proposed course of action.

shall

45. As under Article 11(3), the obligation is to inform the
Commission, but the information may be shared by the
NCA informing the Commission with the other members
of the network.

46. Where an NCA has informed the Commission and the 30
days deadline has expired, it can adopt its decision as long
as the Commission has not
initiated proceedings. The
Commission may make written observations on the case
before the adoption of the decision by the NCA.

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47. If special circumstances require that a national decision is
taken in less than 30 days following the transmission of
information pursuant to Article 11(4), the NCA concerned
may ask the Commission for a swifter reaction. The
Commission will endeavour to react as quickly as possible.

48. Other

of

i.e.

types

decisions

decisions,

interim measures,

rejecting
complaints, decisions closing an ex officio procedure or
decisions ordering
can also be
important from a competition policy point of view, and
the network can have an interest in discussing them. NCAs
inform the
can therefore on the basis of Article 11(5)
Commission and thereby inform the network of any
other case in which EC competition law is applied.

49. All members of the network should inform each other
about the closure of their proceedings which have been
notified to the network pursuant to Article 11(3) (15).

B. The initiation of proceedings by the Commission

under Article 11(6)

50. According to the established case law of the Court of
Justice,
the Commission, entrusted by Article 85(1) of
the EC Treaty with the task of ensuring the application
of the principles laid down in Articles 81 and 82 of the EC
Treaty, is responsible for defining and implementing the
orientation of Community competition policy (16). It can
adopt individual decisions under Articles 81 and 82 of the
EC Treaty at any time.

51. Article 11(6) of the Council Regulation states that the
initiation by the Commission of proceedings
the
adoption of a decision under the Regulation shall relieve
all NCAs of their competence to apply Articles 81 and 82
of the EC Treaty. This means that once the Commission
has opened proceedings, NCAs cannot act under the same
legal basis against the same agreement(s) or practice(s) by
the same undertaking(s) on the same relevant geographic
and product market.

for

case for the adoption of a decision under the Council
Regulation, national
competition authorities may no
longer deal with the case. Article 11(6) of the Council
Regulation provides
the Commission has
that once
initiated a procedure, the NCAs can no longer start their
own procedure with a view to applying Articles 81 and 82
of the EC Treaty to the same agreement(s) or practice(s) by
the same undertaking(s) on the same relevant geographic
and product market.

54. The second situation is where one or more NCAs have
informed the network pursuant to Article 11(3) that they
are acting on a given case. During the initial allocation
period (indicative time period of two months, see above
point 18), the Commission can initiate proceedings with
the effects of Article 11(6) after having consulted the auth-
orities
the
Commission will in principle only apply Article 11(6) if
one of the following situations arises:

allocation phase,

concerned. After

the

(a) Network members envisage conflicting decisions in the

same case.

(b) Network members

envisage

a decision which is
obviously in conflict with consolidated case law; the
standards defined in the judgements of the Community
courts and in previous decisions and regulations of the
Commission should serve as a yardstick; concerning
the assessment of the facts (e.g. market definition),
only a significant divergence will
trigger an inter-
vention of the Commission;

(c) Network member(s)

is

(are) unduly drawing out

proceedings

(d) There is a need to adopt a Commission decision to
develop Community competition policy in particular
when a similar competition issue arises in several
Member States or to ensure effective enforcement;

(e) The NCA(s) concerned do not object.

52. The initiation of a proceeding by the Commission is a
formal act (17) by which the Commission indicates its
intention to adopt a decision under Chapter III of the
Council Regulation. It can occur at any stage of the inves-
tigation of the case by the Commission. The mere fact that
the Commission has received a complaint is not in itself
sufficient to relieve NCAs of their competence.

53. Two situations can arise. First, where the Commission is
the first competition authority to initiate proceedings in a

55. If an NCA is already acting on a case, the Commission will
explain the reasons for the application of Article 11(6) of
the Regulation in writing to the NCA concerned and to the
other members of the Network (18).

56. The Commission will announce to the network its
intention of applying Article 11(6) in due time, so that
Network members have the possibility of asking for a
meeting of the Advisory Committee on the matter before
the Commission initiates proceedings.

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57. The Commission will normally not — and to the extent
that Community interest
is not at stake — adopt a
decision which is in conflict with a decision of an NCA
after proper information pursuant to both Article 11(3)
and (4) has taken place and the Commission has not
made use of Article 11(6).

3. Implementing measures, block-exemption regulations,
guidelines and other notices (art. 33 of the Council
Regulation)

63. The Advisory Committee will be consulted on draft
Commission regulations as provided for in the relevant
Council Regulations.

IV. THE ROLE AND THE FUNCTIONING OF THE ADVISORY

COMMITTEE IN THE NEW SYSTEM

58. The Advisory Committee is the forum where experts from
the various competition authorities discuss individual cases
and general issues of Community competition law (19).

64. Beside regulations, the Commission may also adopt notices
and guidelines. These more flexible tools are very useful
for defining competition policy and explaining how rules
are to be applied in individual cases. The Advisory
Committee will also be consulted on these notices and
guidelines.

A. Scope of the consultation

1. Decisions of the Commission

59. The Advisory Committee

consulted prior

to the
is
Commission taking any decision pursuant to Articles 7,
8, 9, 10, 23, 24(2) or 29(1). The Commission must take
the Advisory
the utmost account of
Committee and inform the Committee of the manner in
which its opinion has been taken into account.

the opinion of

B. Procedure

1. Normal procedure

65. For consultation on Commission draft decisions,

the
meeting of the Advisory Committee takes place at the
earliest 14 days after the invitation to the meeting is
sent by the Commission. The Commission attaches to
the invitation a summary of the case, a list of the most
important documents, i.e. the documents needed to assess
the case, and a draft decision. The Advisory Committee
gives an opinion on the Commission draft decision. At
the request of one or several members, the opinion shall
be reasoned.

60. For decisions adopting interim measures,

the Advisory
Committee is consulted following a swifter and lighter
procedure, on the basis of a short explanatory note and
the operative part of the decision.

66. The Council Regulation introduces the possibility for the
Member States to agree upon a shorter period of time
between the sending of the invitation and the meeting.

2. Decisions of NCAs

2. Written procedure

61. It is in the interest of the network that important cases
dealt with by NCAs under Articles 81 and 82 of the EC
Treaty can be discussed in the Advisory Committee. The
Council Regulation enables the Commission to put a given
case being dealt with by an NCA on the agenda of the
Advisory Committee. Discussion can be requested by the
Commission or by any Member State. In either case, the
Commission will put the case on the agenda after having
informed the NCA(s) concerned. This discussion in the
Advisory Committee will not lead to a formal opinion.

67. The Council Regulation has created the possibility of a
written consultation procedure.
If no Member State
objects, the Commission can consult the Member States
by sending the documents
to them and setting a
deadline within which they can comment on the draft.
This deadline would not normally be shorter than 14
days, except for decisions on interim measures pursuant
to Article 8 of Regulation (EC) No1/2003. Where a
Member State requests that a meeting takes place,
the
Commission will arrange for such meeting.

62. In important cases, the Advisory Committee could also
serve as a forum for the discussion of case allocation. In
particular, where the Commission intends to apply Article
11(6) after the initial allocation period, the case can be
the
the Advisory Committee
discussed
Commission
Advisory
initiates
Committee may issue an informal statement on the matter.

proceedings.

before

The

in

C. Publication of
Committee

the opinion of

the Advisory

68. The Advisory Committee can recommend the publication
of its opinion. In that event, the Commission will carry out
such publication simultaneously with the decision, taking
into account the legitimate interest of undertakings in the
protection of their business secrets.

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V. FINAL REMARKS

69. This Notice is without prejudice to any interpretation of
the applicable Treaty and regulatory provisions by the
Court of First Instance and the Court of Justice.

70. This Notice will be the subject of periodic review carried
out jointly by the NCAs and the Commission. On the basis

of the experience acquired,
than at the end of the third year after its adoption.

it will be reviewed no later

71. This notice replaces the Commission notice on coop-
eration between national competition authorities and the
Commission in handling cases falling within the scope of
Articles 81 and 82 of the EC Treaty published in 1997 (20).

___________
(1) In this notice, the European Commission and the NCAs are collectively referred to as ‘the competition authorities’.

(2) See paragraph 8 of the Joint Statement of the Council and the Commission on the functioning of the network available from the Council register

at http://register.consilium.eu.int (document No 15435/02 ADD 1).

(3) See Recital 18 of the 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 (OJ L 1, 4.1.2003, p. 1).

(4) The intention of making any information exchanged pursuant to Article 11 available and easily accessible to all Network members is however

expressed in the Joint Statement on the functioning of the network mentioned above in footnote 2.

(5) See Commission notice on complaints.

(6) See Case 85/87 Dow Benelux v Commission of the European Communities [1989] ECR 3137 (points 17-20).

(7) See Case 374/87 Orkem v Commission of the European Communities [1989] ECR 3283 and Case T-112/98 Mannesmannröhren-Werke AG v

Commission of the European Communities [2000] ECR II-729.

(8) Commission Regulation (EC) No . . ./2004 of . . . (OJ L . . ., . . . 2004).

(9) OJ C 45, 19.2.2002, p. 3 at paragraph 3.

(10) In this Notice, the term ‘leniency programme’ is used to describe all programmes (including the Commission's programme) which offer either full
immunity or a significant reduction in the penalties which would otherwise have been imposed on a participant in a cartel, in exchange for the
freely volunteered disclosure of information on the cartel which satisfies specific criteria prior or during the investigative stage of the case. The
term does not cover reductions in penalty granted for other reasons.

(11) See above points to 8 to 15.

(12) Similarly, information transmitted with a view to obtaining assistance from the receiving authority under Articles 20 or 21 of Regulation (EC) No
1/2003 or of carrying out an investigation or other fact-finding measure under Article 22 of that Regulation may only be used for the purposes of
the application of the said Articles.

(13) See point 41.

(14) Article 15 of Regulation (EC) No 1/2003 empowers NCAs and the Commission to submit written and, with the permission of the Court, oral
submissions in court proceedings for the application of Articles 81 and 82. This is a very important tool for ensuring consistent application of
Community rules. In exercising this power NCAs and the Commission will cooperate closely.

(15) See point 24 of the Joint Statement on the functioning of the network mentioned above in footnote 2.

(16) See Case C-344/98 Masterfoods Ltd v HB Ice Cream Ltd, [2000] ECR I-11369.

(17) The Court of justice has defined that concept in the case 48/72 SA Brasserie de Haecht v Wilkin-Janssen, [1973] ECR 77: ‘the initiation of a
procedure within the meaning of Article 9 of Regulation No 17 implies an authoritative act of the Commission, evidencing its intention of taking
a decision.’

(18) See point 22 of the Joint Statement mentioned above.

(19) In accordance with Article 14(2), where horizontal issues such as block-exemption regulations and guidelines are being discussed, Member States
can appoint an additional representative competent in competition matters and who does not necessarily belong to the competition authority.

(20) OJ C 313, 15.10.1997, p. 3.

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Draft Commission Notice on the co-operation between the Commission and the courts of the EU
Member States in the application of Articles 81 and 82 EC

I. THE SCOPE OF THE NOTICE

1. The present notice addresses the co-operation between the
Commission and the courts of the EU Member States,
when the latter apply Articles 81 and 82 EC. For the
purpose of this notice,
the ‘courts of the EU Member
States’ (hereinafter ‘national courts’) are those courts and
tribunals within an EU Member State that can apply
Articles 81 and 82 EC and that are authorised to ask a
preliminary question to the Court of
the
European Communities pursuant to Article 234 EC (1).

Justice of

4. Depending on the functions attributed to them under
law, national courts may be called upon to
national
apply Articles 81 and 82 EC in administrative, civil or
criminal proceedings (9). In particular, where an individual
asks the national court to safeguard his subjective rights,
national courts play a specific role in the enforcement of
from the
Articles 81 and 82 EC, which is different
enforcement in the public interest by the Commission or
by national competition authorities (10).
Indeed, national
courts can draw the consequences
resulting from an
infringement of Article 81 or 82 EC on the enforcement
of a contract or on claims for damages.

2. The national courts may be called upon to apply Articles
81 or 82 EC in lawsuits between private parties, such as
actions relating to contracts or actions on damages. They
may also act as public enforcer or as review court. A
national court may indeed be designated as a competition
authority of a Member State (hereinafter ‘the national
competition authority’) pursuant to Article 35(1) of Regu-
lation (EC) No 1/2003 (hereinafter ‘the regulation’) (2). In
that case, the co-operation between the national courts
and the Commission is not only covered by the present
notice, but also by the notice on the co-operation within
the network of competition authorities (3).

5. National courts can apply Articles 81 and 82 EC, without
it being necessary to apply national competition law in
parallel. However, where
applies
national competition law to agreements, decisions by
associations of undertakings or concerted practices which
may affect
trade between Member States within the
meaning of Article 81(1) EC (11) or to any abuse prohibited
by Article 82 EC, they also have to apply EC competition
rules to those agreements, decisions or practices (12).

a national

court

II. THE APPLICATION OF EC COMPETITION RULES BY

NATIONAL COURTS

A. The competence of national courts to apply EC

competition rules

3. To the extent that national courts have jurisdiction to deal
with a case (4), they have the power to apply Articles 81
and 82 EC (5). Moreover, since Articles 81 and 82 EC are a
matter of public policy and are essential to the accom-
plishment of the tasks entrusted to the Community, and,
in particular, for the functioning of the internal market (6),
law have to
national courts which under their national
apply of
rules of public
policy, should also apply Articles 81 and 82 EC of their
own motion (7). Where national courts are not required
their own motion
but have the faculty to apply of
binding domestic rules under the conditions set out in
their national law when they exercise such faculty, they
equally have to apply binding Community rules, such as
Articles 81 and 82 EC, while respecting the same
conditions set out in national law (8).

their own motion national

6. The regulation does not only empower the national courts
to apply EC competition law. The parallel application of
national competition law to agreements, decisions of
and concerted practices
associations of undertakings
which affect trade between Member States may not lead
to a different outcome from that of EC competition law.
Article 3(2) of the regulation provides that agreements,
decisions or concerted practices which do not infringe
Article 81(1) EC or which fulfil the conditions of Article
81(3) EC cannot be prohibited either under national
competition law (13). On the other hand, the Court of
Justice has ruled that agreements, decisions or concerted
practices that violate Article 81(1) and do not fulfil the
conditions of Article 81(3) EC cannot be admitted under
national law (14). As to the parallel application of national
competition law and Article 82 EC in the case of unilateral
conduct, Article 3 of the regulation does not provide for a
in case of
similar convergence obligation. However,
conflicting decisions, the general principle of primacy of
Community law requires national courts to disapply any
provision of national law which contravenes a Community
rule, regardless of whether that national law provision was
adopted before or after the Community rule (15).

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to the extent

7. Apart from the application of Articles 81 and 82 EC,
national courts are also competent to apply acts adopted
by EU institutions in accordance with the EC Treaty or in
accordance with the measures adopted to give the Treaty
these acts have direct effect.
effect,
National courts may thus have to enforce Commission
decisions (16) or Commission regulations applying Article
81(3) EC to certain categories of agreements, decisions or
concerted practices. When applying these EC competition
framework of
courts act within the
rules, national
Community law and are consequently bound to observe
the general principles of Community law (17).

that

decisions

concerted

8. The application of Articles 81 and 82 EC by national
courts often depends on complex economic and legal
assessments (18). When applying EC competition rules,
national courts are bound by the case law of
the
Community courts as well as by Commission regulations
applying Article 81(3) EC to certain categories of
practices (19).
agreements,
or
Furthermore, the application of Articles 81 and 82 EC
by the Commission in a specific case binds the national
courts when they apply EC competition rules in the same
case in parallel with or subsequent to the Commission (20).
Finally, and without prejudice to the ultimate interpre-
tation of the EC Treaty by the Court of Justice, national
courts may find guidance in Commission regulations and
decisions which present elements of analogy with the case
they are dealing with, as well as in Commission notices
and guidelines relating to the application of Articles 81
and 82 EC (21) and in the annual report on competition
policy (22).

B. Procedural

aspects of
competition rules by national courts

the

application of EC

extent,

law determines

also Community

9. The procedural conditions for the enforcement of EC
competition rules by national courts and the sanctions
they can impose in case of an infringement of
those
law. However, to
rules, are largely covered by national
some
the
conditions in which EC competition rules are enforced.
Those Community law provisions may offer certain
facilities to national courts, e.g. to ask the Commission's
opinion on questions concerning the application of EC
competition rules (23) or they may impose obligations on
them,
to allow the Commission and national
competition authorities to submit written observations in
proceedings pending before them (24). These Community
law provisions prevail over national rules. As a conse-
quence, national courts have to set aside national rules
that prevent them from respecting Community law obli-
gations or from using the facilities offered by Community
law.

e.g.

10. In the

absence of Community

law provisions on
procedures and sanctions related to the enforcement of
EC competition rules by national courts, the latter apply
national procedural law and — to the extent that they are
competent to do so — impose sanctions provided for
under national
these
national provisions must be compatible with the general
principles of Community law. In this regard, it is useful to
recall the case law of the Court of Justice, according to
which:

the application of

law. However,

(a) where there is an infringement of Community law,
law must provide for sanctions which are

national
effective, proportionate and dissuasive (25);

(b) where the infringement of Community law causes
harm to an individual, the latter should be able to
ask the national court for damages (26);

(c) the rules on procedures and sanctions which national

courts apply to enforce Community law

— must not make

excessively
difficult or practically impossible (the principle of
effectiveness) (27) and they

such enforcement

— must not be
applicable
national law (the principle of equivalence) (28).

favourable
enforcement of

less
to the

than the

rules
equivalent

Because of the primacy of Community law, a national
court may not apply national rules that are incompatible
with these principles.

C. Parallel

or

consecutive

EC
competition rules by the Commission and by
national courts

application

of

11. A national court may be applying EC competition law to
an agreement, decision, concerted practice or unilateral
behaviour affecting trade between Member States at the
same time as the Commission or subsequent
to the
Commission (29). The following points outline some of
the obligations national courts have to respect in those
circumstances.

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12. Where a national court comes to a decision before the
Commission does, it must avoid adopting a decision that
would conflict with a decision contemplated by the
Commission (30). To that effect, the national court may
ask the Commission whether it has initiated proceedings
regarding the same agreements, decisions or practices (31)
and if so, on the progress of proceedings and on the
likelihood of a decision in that case (32). The national
court may, for reasons of legal certainty, also consider
staying its proceedings until the Commission has reached
a decision (33). The Commission,
its part, will
endeavour to give priority to cases for which it has
decided to initiate proceedings within the meaning of
Article 2(1) of Commission Regulation (EC) No . . . and
that are the subject of national proceedings stayed in
this way,
in particular when the outcome of a civil
dispute depends on them. However, where the national
court cannot reasonably doubt the Commission's contem-
plated decision or where the Commission has already
decided on a similar case, the national court may decide
on the case pending before it in accordance with that
contemplated or
it being
necessary
information
to ask the Commission the
mentioned above or to await the Commission's decision.

decision without

earlier

for

13. Where the Commission reaches a decision before the
national court, the latter cannot take a decision running
counter to that of the Commission. The binding effect of
the Commission's decision is of course without prejudice
to the interpretation of Community law by the Court of
Justice. Therefore, if the national court doubts the legality
of the Commission's decision, it cannot avoid the binding
effects of that decision without a ruling to the contrary by
the Court of Justice (34). Consequently, if a national court
wants to take a decision that runs counter to that of the
Commission,
it must refer a question to the Court of
Justice for a preliminary ruling (Article 234 EC). The
latter will
the
Commission's decision with Community law. However, if
the Commission's decision is
the
Community courts pursuant to Article 230 EC and the
court
the national
outcome of
the Commission's decision,
depends on the validity of
the national court should,
in order to avoid reaching a
decision that runs counter to that of the Commission,
stay its proceedings until
the Community courts have
adopted a definitive decision in the action for annulment
against the Commission decision (35).

then decide on the compatibility of

the dispute before

challenged before

14. When a national court stays proceedings, e.g. awaiting the
Commission's decision (situation described in point 12 of
this notice) or pending final judgement by the Community
courts in an action for annulment or in a preliminary
ruling procedure (situation described in point 13),
it is
incumbent on it to examine whether it is necessary to

interim measures
order
interests of the parties (36).

in order

to safeguard the

III. THE CO-OPERATION BETWEEN THE COMMISSION AND

NATIONAL COURTS

courts

15. Different from the co-operation mechanism between the
national courts and the Court of Justice under Article 234
the EC Treaty does not explicitly provide for a
EC,
co-operation between the national
and the
Commission. However, in its interpretation of Article 10
EC, which obliges the Member States to facilitate the
achievement of the Community's tasks, the Community
courts found that this Treaty provision imposes on the
European institutions and the Member States mutual
duties of loyal co-operation with a view to attaining the
objectives of the EC Treaty. Article 10 EC thus implies that
the Commission must assist national courts when they
apply Community law (37). Equally, national courts may
be obliged to assist the Commission in the fulfilment of
its tasks.

16. It is also appropriate to recall the co-operation between
in particular
national courts and national authorities,
national competition authorities,
for the application of
Articles 81 and 82 EC. While the co-operation between
these national authorities is primarily governed by national
rules, Article 15(3) of the regulation provides for the possi-
bility for national competition authorities to submit obser-
vations before the national courts of their Member State.
Points 31 and 33 to 35 of this notice are mutatis mutandis
applicable to those submissions.

A. The Commission as amicus curiae

17. In order to assist national courts in the application of EC
competition rules, the Commission is committed to help
national courts where the latter find such help necessary to
be able to decide on a case. Article 15 of the regulation
refers to the most frequent types of such assistance: the
transmission of information (points 21 to 25) and the
Commission's opinions (points 27 to 30), both at
the
request of a national court and the possibility for the
Commission to submit observations (points 31 to 35).
Since the regulation provides for these types of assistance,
it cannot be limited by any Member States' rule. However,
in the absence of Community procedural rules to this
effect and to the extent that they are necessary to facilitate
these forms of assistance, Member States must adopt the
appropriate procedural rules to allow both the national
courts and the Commission to make full use of the possi-
bilities the regulation offers (38).

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18. The national court may send its request for assistance in

writing to

European Commission
Directorate General for Competition
B-1049 Brussels

or send it electronically to comp-amicus@cec.eu.int.

22. In order to ensure the efficiency of the co-operation with
national courts, the Commission will endeavour to provide
the national court with the requested information within
one month from the date it receives the request. Where
the Commission has to ask the national court for further
clarification of its request or where the Commission has to
consult those who are directly affected by the transmission
of the information, that period starts to run from the
moment that it receives the required information.

application of

EC competition rules,

19. It should be recalled that whatever form the co-operation
with national courts takes, the Commission will respect the
independence of national courts. As a consequence, the
assistance offered by the Commission does not bind the
national court. The Commission has also to make sure that
it
it respects its duty of professional secrecy and that
its own functioning and independence (39).
safeguards
Since Article 10 EC is aimed at assisting national courts
in the
the
Commission is committed to remaining neutral and
objective in its assistance.
the Commission's
assistance to national courts is part of its duty to defend
the public interest. It has therefore no intention to serve
the private interests of the parties involved in the case
pending before the national court. As a consequence, the
Commission will not hear any of the parties about its
assistance to the national court. In case the Commission
has been contacted by any of
the parties in the case
pending before the court on issues which are raised
inform the national
before the national court,
court
these contacts
independent of whether
took place before or after the national court's request for
co-operation.

thereof,

Indeed,

it will

20. The Commission will publish a summary concerning its
co-operation with national courts pursuant to this notice
in its annual Report on Competition Policy.

1. The Commission's duty to transmit

information to

national courts

21. The duty for the Commission to assist national courts in
the application of EC competition law is mainly reflected
in the obligation for
the Commission to transmit
information it holds to national courts. A national court
may, e.g., ask the Commission for documents in its
possession or for information of a procedural nature to
enable it to discover whether a certain case is pending
before the Commission, whether
the Commission has
initiated a procedure or whether it has already taken a
position. A national court may also ask the Commission
when a decision is likely to be taken, so as to be able to
any decision to stay
determine
the
proceedings or whether
interim measures need to be
adopted (40).

conditions

for

23. In transmitting information to national

courts,

the
Commission has
to uphold the guarantees given to
natural and legal persons by Article 287 EC (41). Article
287 EC prevents members, officials and other servants of
the Commission from disclosing information covered by
the obligation of professional secrecy. The information
covered by professional secrecy may be both confidential
information and business secrets. Business secrets are
information of which not only disclosure to the public
but also mere transmission to a person other than the
one that provided the information might seriously harm
the latter's interests (42).

24. The combined reading of Articles 10 and 287 EC does not
lead to an absolute prohibition for the Commission to
transmit information which is covered by the obligation
of professional secrecy to national courts. The case law of
the Community courts confirms that the duty of loyal
co-operation requires
the Commission to provide the
national court with whatever information the latter asks
for, even information covered by professional secrecy.
However,
in offering its co-operation to the national
courts, the Commission may not in any circumstances
undermine the guarantees laid down in Article 287 EC.

25. Consequently, before transmitting information covered by
professional secrecy to a national court, the Commission
will remind the court of
the latter's obligation under
Community law to uphold the rights which Article 287
EC confers on natural and legal persons and it will ask the
court whether it can and will guarantee protection of
the
confidential
national
the
offer
Commission shall not transmit the information covered
by professional secrecy to the national court (43). Only
when the national court has offered a guarantee that it
information and business
will protect
secrets,
the information
transmit
requested,
indicating those parts which are covered by
professional secrecy and which parts are not and can
therefore be disclosed.

information and business
such

the confidential
the Commission will

If
secrets.
guarantee,

cannot

court

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26. There

are

further

exceptions

to the disclosure of
courts.
information by the Commission to national
Particularly,
the Commission may refuse to transmit
information to national courts for reasons relating to the
need to safeguard the interests of the Community or to
avoid any interference with its functioning and inde-
pendence,
accom-
plishment of the tasks entrusted to it (44).

in particular by jeopardising the

2. Request for an opinion on questions concerning the

application of EC competition rules

case

law of

the Community courts or

27. When called upon to apply EC competition rules to a case
pending before it, a national court may first seek guidance
in
in the
Commission regulations, decisions, notices and guidelines
applying Articles 81 and 82 EC (45). Where these tools do
not offer sufficient guidance, the national court may ask
the Commission for its opinion on questions concerning
the application of EC competition rules. In order to ensure
the efficiency of the co-operation with national courts, the
Commission will endeavour to provide the national court
with the requested opinion within four months from the
date it receives the request. Where the Commission has to
request the national court for further information in order
to enable it to formulate its opinion, that period starts to
run from the moment
it receives the additional
that
information.

28. The national court may ask the Commission for

its
opinion on economic, factual and legal matters (46). The
latter is of course without prejudice to the possibility or
the obligation for the national court to ask the Court of
Justice for a preliminary ruling regarding the interpretation
or the validity of Community law in accordance with
Article 234 EC.

the national

court with the

29. When giving its opinion, the Commission will limit itself
to providing
factual
information or the economic or legal clarification asked
for, without considering the merits of the case pending
before the national court. Moreover, different from the
authoritative interpretation of Community law by the
Community courts, the opinion of the Commission does
not legally bind the national court.

30. In line with what has been said in point 19 of this notice,
the Commission will not hear the parties before formu-
lating its opinion to the national court. The latter will have
to deal with the Commission's opinion in accordance with
the relevant national procedural
rules, which have to
respect the general principles of Community law.

3. The Commission's submission of observations to the

national court

31. According to Article 15(3) of the regulation, the national
competition authorities and the Commission may submit
observations on issues
relating to the application of
Articles 81 or 82 EC to a national court, which is called
upon to apply those provisions. The regulation distin-
guishes between written observations, which the national
competition authorities and the Commission may submit
on their own initiative, and oral observations, which can
only be submitted with the permission of the national
court (47).

32. The regulation specifies that the Commission will only
submit observations when the coherent application of
Articles 81 or 82 EC so requires. That being the
objective of its submission, the Commission will limit its
observations to an economic and legal analysis of the facts
underlying the case pending before the national court.

33. In order to enable the Commission to submit useful obser-
vations, national courts may be asked to transmit or
ensure the transmission to the Commission of a copy of
all documents that are necessary for the assessment of the
case (48). In line with Article 15(3), second subparagraph,
of the regulation,
the Commission will only use those
documents for the preparation of its observations (49).

34. Since the regulation does not provide for a procedural
framework within which the observations are to be
submitted, Member States' procedural rules and practices
framework. Where a
determine the relevant procedural
relevant
Member State has not yet
procedural
to
determine which procedural rules are appropriate for the
submission of observations in the case pending before it.

established the

the national

framework,

court has

35. The procedural framework should respect the principles
set out in point 10 of this notice. That implies amongst
others that the procedural framework for the submission
of observations on issues relating to the application of
Articles 81 or 82 EC

(a) has to be compatible with the general principles of
Community law, in particular the fundamental rights
of the parties involved in the case;

(b) cannot make the submission of such observations
excessively difficult or practically impossible
(the
principle of effectiveness) (50) and

(c) cannot make the submission of such observations
more difficult than the submission of observations in
court proceedings where equivalent national
law is
applied (the principle of equivalence).

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B. The national courts facilitating the role of

the
Commission in the enforcement of EC competition
rules

36. Since the duty of

loyal co-operation also implies that
Member States' authorities assist the European institutions
with a view to attaining the objectives of
the EC
Treaty (51), the regulation provides for three examples of
such assistance:
transmission of documents
necessary for the assessment of a case in which the
Commission would like to submit observations (see point
33), (2) the transmission of judgements applying Articles
81 or 82 EC and (3) the role of national courts in the
context of a Commission inspection.

the

(1)

1. The transmission of

judgements of national courts

applying Articles 81 or 82 EC

37. According to Article 15(2) of

the regulation, Member
States shall send to the Commission a copy of any
written judgement of national courts applying Articles
81 or 82 EC without delay after
the full written
judgement is notified to the parties. The transmission of
national judgements on the application of Articles 81 or
82 EC and the resulting information on proceedings before
national courts primarily enable the Commission to
become aware in a timely fashion of cases for which it
might be appropriate to submit observations where one of
the parties lodges an appeal against the judgement.

2. The role of national courts

in the context of a

Commission inspection

38. Finally, national courts may play a role in the context of a
Commission inspection of undertakings and associations of
undertakings. The role of the national courts depends on
whether
conducted in business
are
premises or in non-business premises.

inspections

the

In its control of the proportionality of the
inspection.
coercive measures,
court may ask the
the national
Commission, directly or through the national competition
authority, for detailed explanations in particular on the
grounds the Commission has for suspecting infringement
of Articles 81 and 82 EC, as well as on the seriousness of
the suspected infringement and on the nature of
the
involvement of the undertaking concerned (52).

that

In that case,
the Commission's

40. With regard to the inspection of non-business premises,
the regulation requires the authorisation from a national
court before a Commission decision ordering such an
the national
inspection can be executed.
court may control
inspection
the coercive measures
decision is authentic and that
envisaged are neither arbitrary nor excessive having
regard in particular to the seriousness of the suspected
infringement, to the importance of the evidence sought,
to the involvement of the undertaking concerned and to
the reasonable likelihood that business books and records
relating to the subject matter of the inspection are kept in
the premises for which the authorisation is requested. The
national court may ask the Commission, directly or
through the national competition authority, for detailed
explanations on those elements that are necessary to
allow its control of the proportionality of the coercive
measures envisaged (53).

41. In both cases referred to in points 39 and 40 the national
court may not call
into question the lawfulness of the
Commission's decision or the necessity for the inspection
nor demand that it be provided with information in the
Commission's file (54). Furthermore,
loyal
to take its
co-operation requires
decision within an appropriate timeframe that allows the
Commission to effectively conduct its inspection (55).

the national court

the duty of

39. With regard to the inspection of business premises,
national
legislation may require authorisation from a
national court to allow a national enforcement authority
to assist the Commission in case of opposition of the
undertaking concerned. Such authorisation may also be
sought as a precautionary measure. When dealing with
the request, the national court has the power to control
that the Commission's inspection decision is authentic and
that the coercive measures envisaged are neither arbitrary
nor excessive having regard to the subject matter of the

IV. FINAL PROVISIONS

42. This notice is issued in order to assist national courts in
the application of Articles 81 and 82 EC. It does not bind
the national courts, nor does it affect the rights and obli-
gations of the EU Member States and natural or legal
persons under Community law.

43. This notice replaces the 1993 notice on co-operation
between national courts and the Commission in applying
Articles 85 and 86 of the EEC Treaty (56).

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___________
(1) For the criteria to determine which entities can be regarded as courts or tribunals within the meaning of Article 234 EC, see e.g. case C-516/99
Schmid [2002] ECR 4573, 34: ‘The Court takes account of a number of factors, such as whether the body is established by law, whether it is
permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is
independent’.

(2) 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 (OJ L 1, 4.1.2003, p. 1).

(3) Notice on the co-operation within the network of competition authorities (OJ C . . .). For the purpose of this notice, a ‘national competition

authority’ is the authority designated by a Member State in accordance with Article 35(1) of the regulation.

(4) The jurisdiction of a national court depends on national, European and international rules of jurisdiction. In this context, it may be recalled that
Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and
commercial matters (OJ L 12, 16.1.2001, p. 1) is applicable to all competition cases of a civil or commercial nature.

(5) See Article 6 of the regulation.

(6) See Articles 2 and 3 EC.

(7) Case C-126/97 Eco Swiss [1999] ECR I-3055, 35 to 40.

(8) Joined cases C-430/93 and C-431/93 van Schijndel [1995] ECR I-4705, 13 to 22.

(9) According to the last sentence of recital 8 of Regulation (EC) No 1/2003, the regulation only applies to national laws which impose criminal
sanctions on natural persons to the extent that such sanctions are the means whereby competition rules applying to undertakings are enforced.

(10) Case T-24/90 Automec [1992] ECR II-2223, 85.

(11) For further clarification of the effect on trade concept, see the notice on this issue (OJ C . . .).

(12) Article 3(1) of the regulation.

(13) See also the notice on the application of Article 81(3) EC (OJ C . . .).

(14) Case 14/68 Walt Wilhelm [1969] ECR 1 and joined cases 253/78 and 1 to 3/79 Giry and Guerlain [1980] ECR 2327, 15 to 17.

(15) Case 106/77 Simmenthal [1978] ECR 629, 21 and case C-198/01 Consorzio Industrie Fiammiferi (CIF) [2003] ECR, 49.

(16) E.g. a national court may be asked to enforce a Commission decision taken pursuant to Articles 7 to 10, 23 and 24 of the regulation.

(17) See e.g. case 5/88 Wachauf [1989] ECR 2609, 19.

(18) Joined cases C-215/96 and C-216/96 Bagnasco [1999] ECR I-135, 50.

(19) Case 63/75 Fonderies Roubaix [1976] ECR 111, 9 to 11 and case C-234/89 Delimitis [1991] ECR I-935, 46.

(20) On the parallel or consecutive application of EC competition rules by national courts and the Commission, see also points 11 to 14.

(21) Case 66/86 Ahmed Saeed Flugreisen [1989] ECR 803, 27 and case C-234/89 Delimitis [1991] ECR I-935, 50. A list of Commission guidelines,
notices and regulations in the field of competition policy,
in particular the regulations applying Article 81(3) EC to certain categories of
agreements, decisions or concerted practices, are annexed to this notice. For the decisions of the Commission making application of Articles
81 and 82 EC (since 1964), see http://www.europa.eu.int/comm/competition/antitrust/cases/.

(22) Joined cases C-319/93, C-40/94 and C-224/94 Dijkstra [1995] ECR I-4471, 32.

(23) On the possibility for national courts to ask the Commission for an opinion, see further in points 27 to 29.

(24) On the submission of observations, see further in points 31 to 35.

(25) Case 68/88 Commission v Greece [1989] ECR 2965, 23 to 25.

(26) On damages in case of an infringement by an undertaking, see case C-453/99 Courage and Crehan [2001] ECR 6297, 26 and 27. On damages in
case of an infringement by a Member State or by an authority which is an emanation of the State and on the conditions of such state liability, see
e.g.
joined cases C-6/90 and C-9/90 Francovich [1991] ECR I-5357, 33 to 36; case C-271/91 Marshall v Southampton and South West
Hampshire Area Health Authority [1993] ECR I-4367, 30 and 34 to 35; joined cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame
[1996] ECR I-1029; case C-392/93 British Telecommunications [1996] ECR I-1631, 39 to 46 and joined cases C-178/94, C-179/94 and
C-188/94 to 190/94 Dillenkofer [1996] ECR I-4845, 22 to 26 and 72.

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(27) See e.g. case 33/76 Rewe [1976] ECR 1989, 5; case 45/76 Comet [1976] ECR 2043, 12 and case 79/83 Harz [1984] ECR 1921, 18 and 23.

(28) See e.g. case 33/76 Rewe [1976] ECR 1989, 5; case 158/80 Rewe [1981] ECR 1805, 44; case 199/82 San Giorgio [1983] ECR 3595, 12 and

case C-231/96 Edis [1998] ECR I-4951, 36 and 37.

(29) Article 11(6), juncto Article 35(3) and (4) of the regulation prevents a parallel application of Articles 81 or 82 EC by the Commission and a

national court only when the latter has been designated as a national competition authority.

(30) Article 16(1) of the regulation.

(31) The Commission may publish in the Official Journal of the European Union the initiation of its proceedings with a view to adopting a decision
pursuant to Article 7 to 10 of the regulation (see Article 2(2) of Commission Regulation (EC) No . . . relating to proceedings pursuant to Articles
81 and 82 of the EC Treaty (OJ L . . .)). According to the Court of Justice, the initiation of proceedings implies an authoritative act of the
Commission, evidencing its intention of taking a decision (case 48/72 Brasserie de Haecht [1973] ECR 77, 16).

(32) Case C-234/89 Delimitis [1991] ECR I-935, 53, and joined cases C-319/93, C-40/94 and C-224/94 Dijkstra [1995] ECR I-4471, 34. See further

on this issue in point 21 of this notice.

(33) See Article 16(1) of the regulation and case C-234/89 Delimitis [1991] ECR I-935, 47 and case C-344/98 Masterfoods [2000] ECR I-11369, 51.

(34) Case 314/85 Foto-Frost [1987] ECR 4199, 12 to 20.

(35) See Article 16(1) of the regulation and case C-344/98 Masterfoods [2000] ECR I-11369, 52 and 57.

(36) Case C-344/98 Masterfoods [2000] ECR, I-11369, 58.

(37) Case C-2/88 Imm Zwartveld [1990] ECR I-3365, 16 to 22 and case C-234/89 Delimitis [1991] I-935, 53.

(38) On the compatibility of such national procedural rules with the general principles of Community law, see points 9 and 10 of this notice.

(39) On these duties, see e.g. points 22 to 25 of this notice.

(40) Case C-234/89 Delimitis [1991] ECR I-935, 53, and joined cases C-319/93, C-40/94 and C-224/94 Dijkstra [1995] ECR I-4471, 34.

(41) Case C-234/89 Delimitis [1991] I-935, 53.

(42) Case T-353/94 Postbank [1996] ECR II-921, 86 and 87 and case 145/83 Adams [1985] ECR 3539, 34.

(43) Case C-2/88 Zwartveld [1990] ECR I-4405, 10 and 11 and case T-353/94 Postbank [1996] ECR II-921, 93.

(44) Case C-2/88 Zwartveld [1990] ECR I-4405, 10 and 11 and case C-275/00 First and Franex [2002] ECR I-10943, 49 and case T-353/94 Postbank

[1996] ECR II-921, 93.

(45) See point 8 of this notice.

(46) Case C-234/89 Delimitis [1991] ECR I-935, 53, and joined cases C-319/93, C-40/94 and C-224/94 Dijkstra [1995] ECR I-4471, 34.

(47) According to Article 15(4) of the regulation, this is without prejudice to wider powers to make observations before courts conferred on national

competition authorities under national law.

(48) Compare with case 96/81 Commission v the Netherlands [1982] ECR 1791, 7 and case 272/86 Commission v Greece [1988] ECR 4875, 30.

(49) See also Article 28(2) of the regulation, which prevents the Commission from disclosing the information it has acquired and which is covered by

the obligation of professional secrecy.

(50) Joined cases 46/87 and 227/88 Hoechst [1989] ECR, 2859, 33. See also Article 15(3) of the regulation.

(51) Case C-69/90 Commission v Italy [1991] ECR 6011, 15.

(52) Article 20(6) to (8) of the regulation and case C-94/00 Roquette Frères [2002] ECR 9011.

(53) Article 21(3) of the regulation.

(54) Case C-94/00 Roquette Frères [2002] ECR 9011, 39 and 62 to 66.

(55) See also ibidem, 91 and 92.

(56) OJ C 39, 13.2.93, p. 6.

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COMMISSION BLOCK EXEMPTION REGULATIONS, NOTICES AND GUIDELINES

ANNEX

This list is also available and updated on the website of the Directorate General for Competition of the European
Commission:

http://europa.eu.int/comm/competition/antitrust/legislation/

A. Non-sector specific rules

1. Notices of a general nature

— Notice on the definition of the relevant market for the purposes of Community competition law (OJ C 372,

9.12.1997, p. 5)

— Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1)

of the Treaty establishing the European Community (de minimis) (OJ C 368, 22.12.2001, p. 13)

— Notice on the effect on trade concept contained in Articles 81 and 82 of the Treaty (OJ C . . .)

— Guidelines on the application of Article 81(3) of the Treaty (OJ C . . .)

2. Vertical agreements

— Regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to

categories of vertical agreements and concerted practices (OJ L 336, 29.12.1999, p. 21)

— Guidelines on Vertical Restraints (OJ C 291, 13.10.2000, p. 1)

3. Horizontal co-operation agreements

— Regulation (EC) No 2658/2000 of 29 November 2000 on the application of Article 81(3) of the Treaty to

categories of specialisation agreements (OJ L 304, 5.12.2000, p. 3)

— Regulation (EC) No 2659/2000 of 29 November 2000 on the application of Article 81(3) of the Treaty to

categories of research and development agreements (OJ L 304, 5.12.2000, p. 7)

— Guidelines on the applicability of Article 81 to horizontal co-operation agreements (OJ C 3, 6.1.2001, p. 2)

4. Licensing agreements for the transfer of technology

— Regulation (EC) No . . . 2004 on the application of Article 81(3) of the Treaty to categories of technology

transfer agreements (OJ L . . .)

— Guidelines on the application of Article 81 of the EC Treaty to technology transfer agreements (OJ L . . .)

B. Sector specific rules

1. Insurance

— Regulation (EC) No 358/2003 of 27 February 2003 on the application of Article 81(3) of the Treaty to
certain categories of agreements, decisions and concerted practices in the insurance sector (OJ L 53,
28.2.2003, p. 8)

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2. Motor vehicles

— Regulation (EC) No 1400/2002 of 31 July 2002 on the application of Article 81(3) of the Treaty to categories
of vertical agreements and concerted practices in the motor vehicle sector (OJ L 203, 1.8.2002, p. 30)

3. Telecommunications and postal services

— Guidelines on the application of EEC competition rules in the telecommunications sector (OJ C 233,

6.9.1991, p. 2)

— Notice on the application of the competition rules to the postal sector and on the assessment of certain State

measures relating to postal services (OJ C 39, 6.2.1998, p. 2)

— Notice on the application of the competition rules to access agreements in the telecommunications sector —

Framework, relevant markets and principles (OJ C 265, 22.8.1998, p. 2)

— Guidelines on market analysis and the assessment of significant market power under the Community regu-

latory framework for electronic communications networks and services (OJ C 165, 11.7.2002, p. 6)

4. Transport

— Regulation (EEC) No 1617/93 on the application of Article 81(3) of the Treaty to certain categories of
agreements and concerted practices concerning joint planning and co-ordination of schedules,
joint
operations, consultations on passenger and cargo tariffs on scheduled air services and slot allocation at
airports (OJ L 155, 26.6.1993, p. 18)

— Communication on clarification of the Commission recommendations on the application of the competition

rules to new transport infrastructure projects (OJ C 298, 30.9.1997, p. 5)

— Regulation (EC) No 823/2000 of 19 April 2000 on the application of Article 81(3) of the Treaty to certain
categories of agreements, decisions and concerted practices between liner shipping companies (consortia) (OJ
L 100, 20.4.2000, p. 24)

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Draft Commission Notice on the handling of complaints by the Commission under Articles 81 and
82 of the EC Treaty

I. INTRODUCTION AND SUBJECT-MATTER OF THE NOTICE

1. Regulation (EC) No 1/2003 (1) establishes a system of
parallel competence for the application of Articles 81
and 82 of the EC Treaty by the Commission and the
Member States competition authorities and courts. The
the complementary
Regulation recognises in particular
functions of
States'
competition authorities acting as public enforcers and
the Member States' courts that rule on private lawsuits
in order to safeguard the rights of individuals deriving
from Articles 81 and 82 (2).

the Commission and Member

2. Under Regulation (EC) No 1/2003, the public enforcers
may focus their action on the investigation of serious
infringements of Articles 81 and 82 which are often
difficult
they
depend on information supplied by operators and by
consumers in the market.

to detect. For their enforcement activity,

3. The Commission therefore wishes to encourage citizens
and undertakings to address themselves to the public
enforcers to inform them about suspected infringements
of the competition rules. At the level of the Commission,
there are two ways to do this, one is by lodging a
complaint pursuant to Article 7 paragraph 2 of Regulation
(EC) No 1/2003. Under Articles 5 to 9 of Regulation No
[. . .] (3), such complaints must fulfil certain requirements.

4. The other way is the provision of market information that
does not have to comply with the requirements
for
complaints pursuant to Article 7 paragraph 2 of Regu-
lation (EC) No 1/2003. For this purpose, the Commission
has created a special website to collect information from
citizens and undertakings and their associations who wish
to inform the Commission about suspected infringements
of Articles 81 and 82. Such information can be the
starting point for an investigation by the Commission (4).
Information about suspected infringements can be supplied
to the following address:

http://europa.eu.int/dgcomp/info-on-anti-competitive-
practices

or to:

European Commission
Competition DG
B-1049 Brussels.

5. Without prejudice to the interpretation of Regulation (EC)
No 1/2003 and of Commission Regulation No [. . .] by the
Community Courts, the present Notice intends to provide
guidance to citizens and undertakings that are seeking
the competition
relief
rules. The Notice contains two main parts:

from suspected infringements of

— Part

II gives indications about

the choice between
complaining to the Commission or bringing a lawsuit

before a national court. Moreover, it recalls the prin-
related to the work-sharing between the
ciples
Commission and the national competition authorities
in the enforcement system established by Regulation
(EC) No 1/2003 that are explained in the Notice on
cooperation within the network of competition auth-
orities (5).

— Part III explains the procedure for the treatment of
to Article 7(2) of Regulation

complaints pursuant
(EC) No 1/2003 by the Commission.

6. This Notice does not address the following situations:

— complaints

lodged by Member States pursuant

to

Article 7(2) of Regulation (EC) No 1/2003,

— complaints that ask the Commission to take action
against a Member State pursuant to Article 86(3) in
conjunction with Articles 81 or 82 of the Treaty,

— complaints relating to Article 87 of the Treaty on state

aids,

— complaints relating to infringements by Member States
that the Commission may pursue in the framework of
Article 226 of the Treaty (6).

II. DIFFERENT POSSIBILITIES FOR LODGING COMPLAINTS
ABOUT SUSPECTED INFRINGEMENTS OF ARTICLES 81
OR 82

A. Complaints in the new enforcement system estab-

lished by Regulation (EC) No 1/2003

7. Depending on the nature of the complaint, a complainant
may bring his complaint either to a national court or to a
competition authority that acts as public enforcer. The
present chapter of this Notice intends to help potential
complainants to make an informed choice about whether
to address themselves to the Commission, to one of the
Member States' competition authorities or to a national
court.

8. While national courts are called upon to safeguard the
rights of individuals and are thus bound to rule on cases
brought before them, public enforcers cannot investigate
all complaints, but must set priorities in their treatment of
cases. The Court of Justice has held that the Commission,
entrusted by Article 85(1) of the EC Treaty with the task of
ensuring application of the principles laid down in Articles
81 and 82 of the Treaty, is responsible for defining and
implementing the orientation of Community competition
policy and that, in order to perform that task effectively, it
is entitled to give differing degrees of priority to the
complaints brought before it (7).

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9. Regulation (EC) No 1/2003 empowers Member States'
courts and Member States' competition authorities
to
apply Articles 81 and 82 in their entirety alongside the
Commission. Regulation (EC) No 1/2003 pursues as one
and
that Member
principal objective
competition authorities should participate effectively in
the enforcement of Articles 81 and 82 (8).

courts

States

10. Moreover, Article 3 of Regulation (EC) No 1/2003
provides that Member States' courts and competition auth-
orities have to apply Articles 81 and 82 to all cases of
agreements or conduct that are capable of affecting trade
between Member States to which they apply their national
competition laws. In addition, Articles 11 and 15 of the
Regulation create a range of mechanisms by which
Member
competition authorities
and
cooperate with the Commission in the enforcement of
Articles 81 and 82.

States'

courts

11. In this new legislative framework, the Commission intends
to refocus its enforcement resources along the following
lines:

— enforce the EC competition rules in cases for which it
is well placed to act (9), concentrating its resources on
the most serious infringements (10);

— handle cases in relation to which the Commission
view to define Community
coherent
ensure
and/or

should act with a
policy
competition
application of Articles 81 or 82.

to

B. The complementary roles of private and public

enforcement

12. It has been consistently held by the Community Courts
that national courts are called upon to safeguard the
rights of
individuals created by the direct effect of
Articles 81(1) and 82 (11).

13. Only national courts can decide upon the nullity or
validity of contracts and only national courts can grant
damages to an individual
in case of an infringement of
Articles 81 and 82. Under the case law of the Court of
Justice, any individual can claim damages for loss caused
to him by a contract or by conduct which restricts or
in order to ensure the full effec-
distorts competition,
the Community competition rules. Such
tiveness of
actions for damages before the national courts can make
a significant contribution to the maintenance of effective
competition in the Community as they discourage under-
takings from concluding or applying restrictive agreements
or practices (12).

14. Regulation (EC) No 1/2003 takes express account of the
fact that national courts have an essential part to play in
applying the EC competition rules (13). By extending the
power to apply Article 81(3) to national courts it removes
the possibility for undertakings to delay national court
proceedings by a notification to the Commission and
thus eliminates an obstacle for private litigation that
existed under Regulation No 17 (14).

15. Without prejudice to the right or obligation of national
courts to address a preliminary question to the Court of
Justice in accordance with Article 234 EC, Article 15(1) of
expressly that
Regulation (EC) No 1/2003 provides
national courts may ask for opinions or
information
from the Commission. This provision aims at facilitating
the application of Articles 81 and 82 by national
courts (15).

16. Action before national courts has the following advantages

for complainants:

— National courts may award damages for loss suffered as

a result of an infringement of Article 81 or 82.

— National courts may rule on claims for payment or
contractual obligations based on an agreement
that
they examine under Article 81.

— It is for the national courts to apply the civil sanction
of nullity of Article 81(2) in contractual relationships
between individuals (16). They can in particular assess,
in the light of the applicable national law, the scope
and consequences of the nullity of certain contractual
provisions under Article 81(2), with particular regard
to all the other matters covered by the agreement (17);

— National courts are usually better placed than the

Commission to adopt interim measures (18).

— Before national courts, it is possible to combine a claim
under Community competition law with other claims
under national law.

— Courts normally have the power to award legal costs to
the successful applicant. This is never possible in an
administrative procedure before the Commission.

17. The fact that a complainant can secure the protection of
his rights by an action before a national court,
is an
important element that the Commission may take into
account
the Community interest
in its examination of
for investigating a complaint (19).

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18. The Commission holds the view that the new enforcement
system established by Regulation (EC) No 1/2003
strengthens the possibilities for complainants to seek and
obtain effective relief before national courts.

C. Work-sharing between the public enforcers in the

European Community

19. Regulation (EC) No 1/2003 creates a system of parallel
competence for the application of Articles 81 and 82 by
empowering Member States' competition authorities to
apply Articles 81 and 82 in their entirety (Article 5).
Decentralised enforcement by Member States' competition
authorities is further encouraged by the possibility to
exchange information (Article 12) and to provide each
other assistance with investigations (Article 22).

20. The Regulation does not

regulate

the work-sharing
States'
between the Commission and the Member
leaves the division of case
competition authorities but
the Commission and the
work to the cooperation of
the
competition
Member
European Competition Network (ECN). The Regulation
pursues the objective of ensuring effective enforcement
of Articles 81 and 82 through a flexible division of case
work between the public enforcers in the Community.

authorities

States'

inside

21. Orientations

for

sharing

between

the work

the
Commission and the Member States' competition auth-
orities are laid down in a separate Notice (20). The
guidance contained in that Notice, which concerns the
relations between the public enforcers, will be of interest
to complainants as it permits them to address a complaint
to the authority most likely to be well placed to deal with
their case.

22. The Notice on cooperation within the Network of

Competition Authorities states in particular (21):

‘An authority can be considered to be well placed to
deal with a case if
the following three cumulative
conditions are met:

— the agreement or practice has substantial direct
actual or
effects on competition
within its territory, is implemented within or orig-
inates from its territory;

foreseeable

— the authority is able to effectively bring to an end
the entire infringement i.e. it can adopt a cease and
desist order the effect of which will be sufficient to
bring an end to the infringement and it can, where
appropriate, sanction the infringement adequately;

— it can gather, possibly with the assistance of other
the evidence required to prove the

authorities,
infringement.

The above criteria indicate that a material link between
the infringement and the territory of a Member State

exist

in order

that Member

State's
for
must
competition authority to be considered well placed. It
can be expected that in most cases the authorities of
those Member States where competition is substantially
affected by an infringement will be well placed
provided they are capable of effectively bringing the
infringement
single or
parallel action unless the Commission is better placed
to act (see below [. . .]).

to an end through either

It follows that a single NCA is usually well placed to
deal with agreements or practices that substantially
affect competition mainly within its territory. [. . .]

Furthermore single action of an NCA might also be
appropriate where, although more than one NCA can
be regarded as well placed, the action of a single NCA
is sufficient to bring the entire infringement to an end.
[. . .]

Parallel action by two or three NCAs may be appro-
priate where an agreement or practice has substantial
effects on competition mainly in their respective terri-
tories and the action of only one NCA would not be
sufficient to bring the entire infringement to an end
and/or to sanction it adequately. [. . .]

The authorities dealing with a case in parallel action
may find it useful to designate one of them as a lead
authority and may agree to delegate tasks to the lead
authority such as for example the coordination of
investigative measures and the information of
the
parties involved.

The Commission is particularly well placed if one or
several agreement(s) or practice(s), including networks
of similar agreements or practices, have effects on
competition in more than three Member States (cross-
border markets covering more than three Member
States or several national markets). [. . .]

to be

if Community

the Commission is
placed

considered
Moreover,
particularly well
interest
requires the adoption of a Community decision to
develop Community competition policy or to ensure
effective enforcement or if a case is closely linked to
are more
other Community
efficiently applied by the Commission or for which
the Commission has exclusive competence.’

provisions which

23. Within the European Competition Network,

formal

information
on complaints will be made available to the other
members of the network before or without delay after
investigative measure (22).
commencing the first
Where the same complaint has been lodged with several
authorities or where a case has not been lodged with an
authority that is well placed, the members of the network
endeavour to determine within an indicative time-limit of
two months which authority or authorities should be in
charge of the case.

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24. Complainants themselves have an important role to play in
further reducing the potential need for reallocation of a
case originating from their complaint by referring to the
orientations on work sharing in the network set out in the
present chapter when deciding on where to lodge their
complaint. If nonetheless a case is reallocated within the
network,
the
complainant(s) are informed as soon as possible by the
competition authorities involved (23).

undertakings

concerned

and

the

25. The Commission may reject a complaint in accordance
with Article 13 of Regulation (EC) No 1/2003, on the
grounds that a Member State competition authority is
dealing or has dealt with the case. When doing so, the
Commission must, in accordance with Article 8 of Regu-
lation [. . .], inform the complainant without delay of the
national competition authority which is dealing or has
already dealt with the case.

III. THE

COMMISSION'S HANDLING OF

COMPLAINTS
PURSUANT TO ARTICLE 7(2) OF REGULATION (EC) No
1/2003

A. General

legal persons

26. According to Article 7(2) of Regulation (EC) No 1/2003
natural or
that can show a legitimate
interest (24) are entitled to lodge a complaint to ask the
Commission to find an infringement of Articles 81 and 82
EC and to require that the infringement be brought to an
end in accordance with Article 7(1) of Regulation (EC) No
1/2003. The present part of
this Notice explains the
requirements applicable to complaints based on Article
7(2) of Regulation (EC) No 1/2003, their assessment and
the procedure followed by the Commission.

27. The Commission, unlike civil courts, whose task is to
safeguard the individual rights of private persons,
is an
in the public
administrative authority that must act
interest.
the Commission's
task as public enforcer that it has a margin of discretion
to set priorities in its enforcement activity (25).

is an inherent

feature of

It

28. The Commission is entitled to give different degrees of
priority to complaints made to it and may refer to the
Community interest presented by a case as a criterion of
priority (26). The Commission may reject a complaint when
it considers that the case does not display a sufficient
investigation.
Community
to justify
the
Where
complainant
the
Commission (27) without prejudice to Article 7(3) of Regu-
lation No [. . .].

interest
the Commission
entitled

further
a
decision

complaint,
of

rejects
a
to

is

B. Making a complaint pursuant to Article 7(2) of

Regulation (EC) No 1/2003

(a) Complaint form

29. A complaint pursuant to Article 7(2) of Regulation (EC)
an alleged
No 1/2003 can only be made
infringement of Articles 81 or 82 in view of
the
Commission taking action under Article 7(1) of Regulation
(EC) No 1/2003. A complaint under Article 7(2) of Regu-
lation (EC) No 1/2003 has to comply with Form C
mentioned in Article 5(2) of Regulation No [. . .] and
annexed to that Regulation.

about

30. Form C is

available

if possible, an electronic copy.

at http://europa.eu.int/dgcomp/
complaints-form and is also annexed to this Notice. The
complaint must be submitted in three paper copies as well
as,
the
complainant must provide a non-confidential version of
the complaint (Article 5(3) of Regulation No [. . .]). Elec-
tronic transmission to the Commission is possible via the
website indicated, the paper copies should be sent to the
following address:

In addition,

European Commission
Competition DG
B-1049 Brussels.

31. Form C requires

to submit

relevant
complainants
information to substantiate their complaint. They should
also provide copies of relevant supporting documentation
reasonably available to them and, to the extent possible,
provide indications as to where relevant information and
documents that are unavailable to them could be obtained
by the Commission. In particular cases, the Commission
may dispense with the obligation to provide part of the
information required by Form C (Article 5(2) of Regulation
No [. . .]).

32. Correspondence to the Commission that does not comply
with the requirements of Article 5 of Regulation No [. . .]
and therefore does not constitute a complaint within the
meaning of Article 7(2) of Regulation (EC) No 1/2003 will
be considered by the Commission as general information
that, where it
is useful, may lead to an own-initiative
investigation (cf. point 4 above).

(b) Legitimate interest

33. The status of formal complainant under Article 7(2) of
Regulation (EC) No 1/2003 is
reserved to legal and
natural persons who can show a legitimate interest (28).
Member States are deemed to have a legitimate interest
for all complaints they choose to lodge.

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34. In the past practice of the Commission, the condition of
legitimate interest was not often a matter of doubt as most
complainants were in a position of being directly and
adversely affected by the alleged infringement. However,
there are situations where the condition of a ‘legitimate
interest’
to
conclude that it is fulfilled. Useful guidance can best be
provided by a non-exhaustive set of examples.

in Article 7(2)

further analysis

requires

to

40. Complainants have to demonstrate their legitimate interest.
Where a natural or legal person lodging a complaint is
unable
the
a
Commission is entitled, without prejudice to its right to
initiate proceedings of its own initiative, not to pursue the
complaint. The Commission may ascertain whether this
condition is met at any stage of the investigation (33).

demonstrate

legitimate

interest,

relevant market, by the

35. The Court of First Instance has held that an association of
undertakings may claim a legitimate interest in lodging a
complaint
regarding conduct concerning its members,
even if it is not directly concerned, as an undertaking
operating in the
conduct
complained of, provided that,
is entitled to
represent the interests of its members and secondly, the
conduct complained of is liable to adversely affect the
interests of its members (29). Conversely, the Commission
has been found to be entitled not to pursue the complaint
of an association of undertakings whose members were
not
transactions
complained of (30).

type of business

involved in the

first,

it

36. From this case law, it can be inferred that undertakings
(themselves or through associations that are entitled to
represent their interests) can claim a legitimate interest
where they are operating in the relevant market or
where the conduct complained of
is liable to directly
and adversely affect their interests. This confirms the estab-
lished practice of the Commission which has accepted that
a legitimate interest can, for instance, be claimed by the
parties to the agreement or practice which is the subject of
the complaint, by competitors whose interests have
allegedly been damaged by the behaviour complained of
or by undertakings excluded from a distribution system.

37. Consumer associations can equally lodge complaints with
the Commission (31). The Commission moreover holds the
view that individual consumers whose economic interests
are directly and adversely affected insofar as they are the
buyers of goods or services that are the object of an
infringement can be in a position to show a legitimate
interest (32).

38. However,

consider

the Commission does not

a
legitimate interest within the meaning of Article 7(2) the
interest of persons or organisations that wish to come
forward on general
considerations without
interest
showing that
they or their members are liable to be
directly and adversely affected by the infringement (pro
bono publico).

as

39. Local or regional public authorities may be able to show a
legitimate interest in their capacity as buyers or users of
goods or services affected by the conduct complained of.
Conversely,
they cannot be considered as showing a
legitimate interest within the meaning of Article 7(2) of
Regulation (EC) No 1/2003 to the extent that they bring to
the attention of the Commission alleged infringements pro
bono publico.

C. Assessment of complaints

(a) Community interest

41. Under the constant case law of the Community Courts, the
Commission is not required to conduct an investigation in
each case (34) or, a fortiori, to take a decision within the
meaning of Article 249 EC on the
existence or
non-existence of an infringement of Articles 81 or
82 (35), but is entitled to refer to the Community interest
in order to determine the degree of priority to be applied
to the various complaints it receives (36). The position is
different only if the complaint falls within the exclusive
competence of the Commission (37).

42. The Commission must however examine carefully the
factual and legal elements brought to its attention by the
complainant in order to assess the Community interest in
further investigation of a case (38).

43. The assessment of the Community interest raised by a
complaint depends on the circumstances of each individual
case. Accordingly, the number of criteria of assessment to
which the Commission may refer is not limited, nor is the
Commission required to have recourse exclusively to
certain criteria. As the factual and legal circumstances
may differ considerably from case to case, it is permissible
to apply new criteria which had not before been
considered (39). Where appropriate, the Commission may
give priority to a single criterion for assessing the
Community interest (40).

44. Among the criteria which have been held relevant in the
case law for the assessment of the Community interest in
the (further) investigation of a case are the following:

— The Commission can reject a complaint on the ground
that the complainant can bring actions to assert his
rights before national courts (41).

— The Commission may not regard certain situations as
excluded in principle from its purview under the task
entrusted to it by the Treaty but is required to assess in
each case how serious the alleged infringements are
consequences are. This
and how persistent
it must take into account
means in particular that
the duration and the extent of
the infringements
complained of and their effect on the competition
situation in the Community (42).

their

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— The Commission may have to balance the significance
of the alleged infringement as regards the functioning
of the common market, the probability of establishing
the existence of the infringement and the scope of the
its task of
investigation required in order to fulfil
ensuring that Articles 81 and 82 of the Treaty are
complied with (43).

— While the Commission's discretion does not depend on
the more or less advanced stage of the investigation of
a case, the stage of the investigation forms part of the
circumstances of the case which the Commission may
have to take into consideration (44).

— The Commission may decide that it is not appropriate
to investigate a complaint where the practices
in
question have ceased (45). However, for this purpose,
the Commission will have to ascertain whether anti-
competitive effects persist and if the seriousness of the
infringements or the persistence of their effects does
not give the complaint a Community interest.

— The Commission may also decide that it is not appro-
priate to investigate a complaint where the under-
takings concerned accept to change their conduct in
such a way that it can consider that there is no longer
a sufficient Community interest to intervene (46).

the Commission may reject

45. Where it forms the view that a case does not display
investi-
sufficient Community interest to justify (further)
gation,
the complaint on
that ground. Such a decision can be taken either before
commencing an investigation or after taking investigative
measures (47). However, the Commission is not obliged to
set aside a complaint for lack of Community interest. It
may investigate any suspected infringement of Articles 81
and 82 in view of a prohibition decision (48).

(b) Assessment under Articles 81 and 82

46. The examination of a complaint under Articles 81 and 82
involves two aspects, one relating to the facts to be estab-
lished to prove an infringement of Articles 81 or 82 and
the other relating to the legal assessment of the conduct
complained of.

47. Where the evidence submitted by the complainant, while
complying with the requirements of Article 5 of Regu-
lation No [. . .] and Form C, fails to establish proof of
the allegations put forward, a complaint may be rejected
on that ground (49). In order to reject a complaint on the
ground that the conduct complained of does not infringe
the EC competition rules or does not fall within their
scope of application, the Commission is not obliged to
take into account circumstances
that have not been
brought to its attention by the complainant and that it
could only have uncovered by the investigation of the
case (50).

48. The criteria for the legal assessment of agreements or
practices under Articles 81 and 82 cannot be dealt with
exhaustively in the present Notice. However, potential
to the extensive guidance
complainants
available from the Commission (51),
in addition to other
sources and in particular the case law of the Community
Courts and the case practice of the Commission. Four
specific issues are mentioned in the following points
with indications on where to find further guidance.

should refer

49. Agreements

and practices

fall within the

scope of
application of Articles 81 and 82 where they are capable
of affecting trade between Member States. Where an
fulfil
agreement or practice does not
this condition,
national
apply, but not EC
competition law may
competition law. Extensive guidance on this subject can
be found in the Notice on the effect on trade concept (52).

50. Agreements falling within the scope of Article 81 may be
agreements of minor importance which are deemed not to
restrict competition appreciably. Guidance on this issue
can be found in the Commission's de minimis Notice (53).

51. Agreements that fulfil the conditions of a block exemption
regulation are deemed to satisfy the conditions of Article
81(3) (54). For the Commission to withdraw the benefit of
the block exemption pursuant to Article 29 of Regulation
(EC) No 1/2003,
find that upon individual
assessment an agreement to which the exemption regu-
lation applies has certain effects which are incompatible
with Article 81(3).

it must

52. Agreements that restrict competition within the meaning
of Article 81(1) EC may fulfil the conditions of Article
81(3) EC. Pursuant to Article 1(2) of Regulation (EC) No
1/2003 and without a prior administrative decision being
required such agreements are not prohibited. Guidance on
the conditions to be fulfilled by an agreement pursuant to
Article 81(3) can be found in the Notice on Article
81(3) (55).

D. The Commission's procedures when dealing with

complaints

(a) Overview

53. As recalled above, the Commission is not obliged to carry
out an investigation on every complaint submitted with a
view to establishing whether an infringement has been
committed. However, the Commission is under a duty to
consider carefully the factual and legal issues brought to its
attention by the complainant, in order to assess whether
those issues indicate conduct which is liable to infringe
Articles 81 and 82 (56).

54. In

the Commission's procedure

for

dealing with

complaints, different stages can be distinguished (57).

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55. During the first stage, following the submission of the
complaint, the Commission examines the complaint and
may collect further information in order to decide what
action it will
take on the complaint. That stage may
include an informal exchange of views between the
Commission and the complainant with a view to clarifying
the factual and legal issues with which the complaint is
In this stage, the Commission may give an
concerned.
initial
the
complainant
complainant an opportunity to expand on his allegations
in the light of that initial reaction.

allowing

reaction

the

to

56. In the second stage, the Commission may investigate the
case further with a view to initiate proceedings pursuant to
Article 7(1) of Regulation (EC) No 1/2003 against the
undertakings complained of. Where
the Commission
there are insufficient grounds for acting
considers that
its
on the complaint,
reasons and offers the complainant the opportunity to
submit any further comments within a time-limit which
it fixes (Article 7(1) of Regulation No [. . .]).

informs the complainant of

it

57. If the complainant fails to make known its views within
the time-limit set by the Commission, the complaint is
deemed to have been withdrawn (Article 7(3) of Regu-
lation No [. . .]). In all other cases, in the third stage of
the procedure, the Commission takes cognisance of the
observations submitted by the complainant and either
initiates a procedure against the subject of the complaint
or adopts a decision rejecting the complaint (58).

58. Where the Commission rejects a complaint pursuant to
Article 13 of Regulation (EC) No 1/2003 on the grounds
that another authority is dealing or has dealt with the case,
the Commission proceeds in accordance with Article 8 of
Regulation No [. . .].

59. All along the procedure, complainants benefit

from a
range of rights as provided in particular in Articles 6 to
9 of Regulation No [. . .]. However, proceedings of the
Commission in competition cases do not constitute adver-
sarial proceedings between the complainant on the one
hand and the companies which are the subject of the
investigation on the other hand. Accordingly,
the
procedural rights of complainants are less far-reaching
than the right to a fair hearing of the companies which
are the subject of an infringement procedure (59).

(b) Indicative time limit for informing the complainant of the

Commission's proposed action

60. The Commission is under an obligation to decide on
complaints within a reasonable time (60). What
is a
reasonable duration depends on the circumstances of
the various
each case and in particular,
procedural
the
steps
conduct of the parties in the course of the procedure,
the complexity of the case and its importance for the
various parties involved (61).

followed by the Commission,

its context,

61. The Commission will

in principle endeavour to inform
complainants of the action that it proposes to take on a
complaint within an indicative time frame of four months
from the reception of the complaint. Thus, subject to the
circumstances of the individual case and in particular the
possible need to request complementary information from
the complainant or third parties, the Commission will in
principle inform the complainant within four months
whether or not it intends to investigate his case further.
This time-limit does not constitute a binding statutory
term.

62. The Commission may communicate its proposed course of
action to the complainant as an initial reaction within the
first phase of the procedure. The Commission may also,
where the examination of the complaint has progressed to
this stage, directly proceed to informing the complainant
about its provisional assessment by a letter pursuant to
Article 7(1) of Regulation No [. . .].

63. To ensure
complaint,
diligently
informing the Commission of new developments.

their
is desirable that complainants cooperate
the
by

the most expeditious
it
in

procedures (62),

treatment of

example

for

(c) Procedural rights of the complainant

the complainant

64. Where the Commission addresses a statement of objections
to the companies complained of pursuant to Article 10(1)
of Regulation No [. . .],
is entitled to
this document from which business
receive a copy of
secrets
the
confidential
companies concerned have been removed (non-confi-
dential version of the statement of objections; cf. Article
6(1) of Regulation No [. . .]). The complainant is invited to
comment in writing on the statement of objections. A
time-limit will be set for such written comments.

information of

and other

65. Furthermore,

the Commission may, where appropriate,
afford complainants the opportunity of expressing their
the parties to which a
views at
statement of objections has been addressed,
the
complainants so request in their written comments (63).

the oral hearing of

if

66. Complainants may submit, of

information will be protected by

their own initiative or
following a request by the Commission, documents that
contain business secrets or other confidential information.
Confidential
the
Commission (64). Pursuant to Article 16 of Regulation No
[. . .], the Commission may request complainants which
have produced documents or statements, to identify the
documents or parts of
statements
which they consider to be confidential. It may in particular
set a deadline for the complainant
to specify why it
considers a piece of information to be confidential and
to provide a non-confidential version, including a concise
description or non-confidential version of each piece of
information deleted.

the documents or

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Official Journal of the European Union

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information,

67. In case of disagreement about the confidentiality of a piece
of
the settlement procedure regulated in
Article 17 of Regulation No [. . .] applies. According to
this procedure the Commission informs undertakings of
information
its intention to disclose a certain piece of
and states its reasons.
If the undertaking maintains its
objection to the disclosure the Commission adopts a
decision on the disclosure of
information in
question. This decision is subject to judicial control by
including the possibility for
the Community Courts,
complainants to ask for interim relief.

the

information

68. The qualification of information as confidential does not
the Commission from disclosing and using
prevent
information necessary to prove
an infringement of
Articles 81 or 82 (65). Where business secrets and confi-
dential
an
infringement, the Commission must balance the interest
in the protection of such information and the public
interest
the competition
it must assess for each
rules terminated. To that end,
the need to disclose is
individual document whether
greater than the harm which might result from disclosure.

in having the infringement of

necessary

prove

are

to

69. Where the Commission takes

it will

the orientation that a
complaint should not be further examined, because there
is no sufficient Community interest in pursuing the case
further or on other
inform the
grounds,
complainant in the form of a letter which indicates its
legal basis (Article 7(1) of Regulation No [. . .]), sets out
the reasons that have led the Commission to provisionally
conclude
the
complainant
the opportunity to submit supplementary
information or observations within a time-limit set by
the Commission. The Commission will also indicate the
consequences of an omission to reply pursuant to Article
7(3) of Regulation No [. . .], as explained below.

indicated and provides

in the

sense

73. In

the

case, where

complainant
the Commission

submits
that
observations,
takes
supplementary
cognisance of
those observations. Where they are of
such a nature as to make the Commission change its
it may initiate a procedure
previous course of action,
against the companies complained of. In this procedure,
the complainant has the procedural rights explained above.

74. Where the observations of the complainant do not alter
the Commission's proposed course of action, it rejects the
complaint by decision (66).

(d) The Commission decision rejecting a complaint

75. Where the Commission rejects a complaint by decision
pursuant to Article 7(2) of Regulation No [. . .] it must
state the reasons in accordance with Article 253 EC, i.e.
in a way that is appropriate to the act at issue and takes
into account the circumstances of each case.

fashion the

76. The statement of reasons must disclose in a clear and
unequivocal
reasoning followed by the
Commission in such a way as to enable the complainant
to ascertain the reasons for the decision and to enable the
competent Community Court
to exercise its power of
the Commission is not obliged to
review. However,
adopt a position on all the arguments relied on by the
complainants
It only
needs to set out the facts and legal considerations which
are of decisive
the
decision (67).

their complaint.

in support of

context of

importance

in the

70. Pursuant

to Article 9(1) of Regulation No [. . .],

the
complainant has the right to access the information on
which the Commission bases its preliminary view. Such
access is normally provided by annexing to the letter a
copy of the relevant documents.

77. Where the Commission rejects a complaint in a case that
also gives rise to a decision pursuant to Article 10 of
Regulation (EC) No 1/2003 (Finding of inapplicability of
Articles 81 or 82) or Article 9 of Regulation (EC) No
1/2003
a
complaint may refer to that other decision adopted on
the basis of the provisions mentioned.

(Commitments),

rejecting

decision

the

71. The time-limit for observations by the complainant on the
letter pursuant to Article 7(1) of Regulation No [. . .] will
be set in accordance with the circumstances of the case. It
will not be shorter than four weeks (Article 18(2) of Regu-
the complainant does not respond
lation No [. . .]).
within the time-limit set,
is deemed to
have been withdrawn pursuant to Article 7(3) of Regu-
lation No [. . .]. Complainants
also entitled to
withdraw their complaint at any time if they so wish.

the complaint

are

If

72. The

complainant may request

the
time-limit for comments. Depending on the circumstances
of the case, the Commission may grant such an extension.

an extension of

78. A decision to reject a complaint is subject to appeal before

the Community Courts (68).

79. A decision rejecting a complaint prevents complainants
from requiring the reopening of the investigation unless
they put forward significant new evidence. Accordingly, a
further correspondence on the same alleged infringement
by former complainants cannot be regarded as a new
complaint unless significant new evidence is brought to
the attention of the Commission. However, the closing
of a file does not prevent the Commission from re-opening
it.

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80. A decision to reject a complaint does not definitively rule
on the question whether or not there is an infringement of
Articles 81 or 82, even where the Commission has
assessed the facts on the basis of Articles 81 and 82.
The assessments made by the Commission in a decision
rejecting a complaint therefore do not prevent a Member
State
competition authority from applying
Articles 81 and 82 to agreements and practices brought
before it. The assessments made by the Commission in a
decision rejecting a complaint constitute facts which
Member States courts or competition authorities may
take into account in examining whether the agreements
or conduct in question are in conformity with Articles 81
and 82 (69).

court or

(e) Specific situations

81. According to Article 8 of Regulation (EC) No 1/2003 the
interim

Commission may on its own initiative order

measures where there is the risk of serious and irreparable
damage to competition. Article 8 of Regulation (EC) No
1/2003 makes it clear that interim measures cannot be
applied for by complainants under Article 7(2) of Regu-
lation (EC) No 1/2003. Requests of interim measures by
undertakings can be brought before Member States' courts
which are well placed to decide on such measures (70).

their

82. Some persons wish to inform the Commission about
suspected infringements of Articles 81 or 82 without
having
revealed to the undertakings
concerned by the allegations. These persons are welcome
to contact the Commission. The Commission is bound to
respect an informant's request for anonymity (71), unless
the request to remain anonymous is manifestly unjustified.

identity

___________
(1) 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 (OJ L 1, 4.1.2003, p. 1).

(2) Cf. in particular Recitals 3-7 and 35 of Regulation (EC) No 1/2003.

(3) Commission Regulation (EC) No . . ./04 of . . . relating to proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ

. . .).

(4) The Commission handles correspondence from informants in accordance with its principles of good administrative practice.

(5) Notice on cooperation within the Network of competition authorities.

(6) For the handling of such complaints, cf. Commission communication of 10 October 2002, COM(2002) 141.

(7) Case C-344/98, Masterfoods v HB Ice Cream, [2000] ECR I-11369, para 46; Case C-119/97 P, Union française de l'express (Ufex) and Others v
Commission of the European Communities, [1999] ECR I-1341, para 88; Case T-24/90, Automec v Commission of the European Communities,
[1992] ECR II-2223, paras 73-77.

(8) Cf. in particular Articles 5, 6, 11, 12, 15, 22, 29, 35 and Recitals 2 to 4 and 6 to 8 of Regulation (EC) No 1/2003.

(9) Cf. Notice on cooperation within the network of competition authorities . . ., points 5ss.

(10) Cf. Recital 3 of Regulation (EC) No 1/2003.

(11) Constant case law, cf. Case 127/73, Belgische Radio en Televisie (BRT) v SABAM and Fonior, [1974] ECR 51, para 16; Case C-282/95 P, Guérin
automobiles v Commission of the European Communities, [1997] ECR I-1503, para 39; Case C-453/99, Courage v Bernhard Crehan, [2001] ECR
I-6297, para 23.

(12) Case C-453/99, Courage v Bernhard Crehan, [2001] ECR I-6297, paras 26 and 27; the power of national courts to grant damages is also

underlined in Recital 7 of Regulation (EC) No 1/2003.

(13) Cf. Articles 1, 6 and 15 as well as Recital 7 of Regulation (EC) No 1/2003.

(14) Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty; OJ 13 of 21 February 1962, p. 204-211; English special
edition: Series I Chapter 1959-1962 p. 87. Regulation No 17 is repealed by Article 43 of Regulation (EC) No 1/2003 with effect of 1 May 2004.

(15) For more detailed explanations of this mechanism, cf. Notice on the cooperation between the Commission and the courts of the EU Member

States in the application of Articles 81 and 82 EC.

(16) Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 93.

(17) Case C-230/96, Cabour and Nord Distribution Automobile v Arnor ‘SOCO’, [1998] ECR I-2055, para 51; Joined Cases T-185/96, T-189/96 and

T-190/96, Dalmasso and Others v Commission of the European Communities, [1999] ECR II-93, para 50.

(18) Cf. Article 8 of Regulation (EC) No 1/2003 and para 81 below. Depending on the case, Member States' competition authorities may equally be

well placed to adopt interim measures.

(19) Cf. points 41ss. below.

(20) Notice on cooperation within the Network of competition authorities.

(21) Notice on cooperation within the Network of competition authorities, points 8-15.

(22) Article 11(2) and (3) of Regulation (EC) No 1/2003; Notice on cooperation within the Network of Competition Authorities, points 16/17.

(23) Notice on cooperation within the Network of Competition Authorities, point 34.

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(24) For more extensive explanations on this notion in particular, cf. points 33ss. below.

(25) Case C-119/97 P, Union française de l'express (Ufex) and Others v Commission of the European Communities, [1999] ECR I-1341, para 88; Case

T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, paras 73-77 and 85.

(26) Constant case law since Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 85.

(27) Case C-282/95 P, Guérin automobiles v Commission of the European Communities, [1997] ECR I-1503, para 36.

(28) Cf. Article 5(1) of Regulation No [. . .].

(29) Case T-114/92, Bureau Européen des Médias et de l'Industrie Musicale (BEMIM) v Commission of the European Communities, [1995] ECR II-147,
para 28. Associations of undertakings were also the complainants in the cases underlying the judgements in Case 298/83, Comité des industries
cinématographiques des Communautés européennes (CICCE) v Commission of the European Communities, [1985] ECR 1105 and Case T-319/99,
Federacion Nacional de Empresas (FENIN) v Commission of the European Communities, not yet published in [2003] ECR.

(30) Joined Cases T-133/95 and T-204/95, International Express Carriers Conference (IECC) v Commission of the European Communities, [1998] ECR

II-3645, paras 79-83.

(31) Case T-37/92, Bureau Européen des Unions des Consommateurs (BEUC) v Commission of the European Communities, [1994] ECR II-285, para

36.

(32) This question is currently raised in a pending procedure before the Court of First Instance (Joined cases T-213 and 214/01). The Commission has
also accepted as complainant an individual consumer in its Decision of 9 December 1998 in Case IV/D-2/34.466, Greek Ferries (OJ L 109 of
27.4.1999, p. 24, para 1).

(33) Joined Cases T-133/95 and T-204/95, International Express Carriers Conference (IECC) v Commission of the European Communities, [1998] ECR

II-3645, para 79.

(34) Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 76; Case C-91/95 P, Roger Tremblay and Others

v Commission of the European Communities, [1996] ECR I-5547, para 30.

(35) Case 125/78, GEMA v Commission of the European Communities, [1979] ECR 3173, paragraph 17; Case C-119/97P, Union française de

l'express (Ufex) and Others v Commission of the European Communities, [1999] ECR I-1341, para 87.

(36) Constant case law since the Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 85; Recital 18 of

Regulation (EC) No 1/2003 expressly confirms this possibility.

(37) Constant case law since Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 75. Under Regulation

(EC) No 1/2003, this principle may only be relevant in the context of Article 29 of that Regulation.

(38) Case 210/81, Oswald Schmidt, trading as Demo-Studio Schmidt v Commission of the European Communities, [1983] ECR 3045, para 19, Case
C-119/97 P, Union française de l'express (Ufex) and Others v Commission of the European Communities, [1999] ECR I-1341, para 86.

(39) Case C-119/97 P, Union française de l'express (Ufex) and Others v Commission of the European Communities, [1999] ECR I-1341, paras 79-80.

(40) Case C-450/98 P, International Express Carriers Conference (IECC) v Commission of the European Communities, [2001] ECR I-3947, paras 57-59.

(41) Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, paras 88ss.; Case T-5/93, Roger Tremblay and Others
v Commission of the European Communities, [1995] ECR II-185, paras 65ss.; Case T-575/93, Casper Koelman v Commission of the European
Communities, [1996] ECR II-1, paras 75-80; see also part II above where more detailed explanations on this situation are given.

(42) Case C-119/97 P, Union française de l'express (Ufex) and Others v Commission of the European Communities, [1999] ECR I-1341, paras 92/93.

(43) Constant case law since Case T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 86.

(44) Case C-449/98 P, International Express Carriers Conference (IECC) v Commission of the European Communities [2001] ECR I-3875, para 37.

(45) Case T-77/95, Syndicat français de Express International and Others v Commission of the European Communities [1997] ECR II-1, para 57,
upheld on the condition referred to in the same point by Case C-119/97 P, Union française de l'express (Ufex) and Others v Commission of the
European Communities, [1999] ECR I-1341, para 95. Cf. also Case T-37/92, Bureau Européen des Unions des Consommateurs (BEUC) v
Commission of the European Communities, [1994] ECR II-285, para 113, where an unwritten commitment between a Member State and a
third county outside the common commercial policy was held not to suffice to establish that the conduct complained of had ceased.

(46) Case T-110/95, International Express Carriers (IECC) v Commission of the European Communities and Others, [1998] ECR II-3605, para 57,
upheld by Case 449/98 P, International Express Carriers (IECC) v Commission of the European Communities and Others, [2001] ECR I-3875,
paras 44-47.

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(47) Case C-449/98 P, International Express Carriers (IECC) v Commission of the European Communities e.a [2001] ECR I-3875, para 37.

(48) Cf. already Case T-77/92, Parker Pen v Commission of the European Communities, [1994] ECR II-549, paras 64/65; even clearer in Case

C-344/98, Masterfoods v HB Ice Cream, [2000] ECR 11369, para 48.

(49) Case 298/83, Comité des industries cinématographiques des Communautés européennes (CICCE) v Commission of the European Communities,
[1985] ECR 1105, paras 21-24; Case T-198/98, Micro Leader Business v Commission of the European Communities, [1999] ECR II-3989, paras
32-39.

(50) Case T-319/99, Federacion Nacional de Empresas (FENIN) v Commission of the European Communities, not yet published in [2003] ECR, para

43.

(51) Extensive guidance can be found on the Commission's website at http://europa.eu.int/comm/competition/index_en.html

(52) Notice on the effect on trade concept contained in Articles 81 and 82 of the Treaty.

(53) Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty

establishing the European Community (de minimis) (OJ C 368, 22.12.2002, p. 13).

(54) The texts of all block exemption regulations are available on the Commission's website at http://europa.eu.int/comm/competition/index_en.html

(55) Commission Notice — Guidelines on the application of Article 81(3) of the Treaty.

(56) Case 210/81, Oswald Schmidt, trading as Demo-Studio Schmidt v Commission of the European Communities, [1983] ECR 3045, para 19; Case

T-24/90, Automec v Commission of the European Communities, [1992] ECR II-2223, para 79.

(57) Cf. Case T-64/89, Automec v Commission of the European Communities, [1990] ECR II-367, paras 45-47 Case T-37/92, Bureau Européen des

Unions des Consommateurs (BEUC) v Commission of the European Communities, [1994] ECR II-285, para 29.

(58) Case C-282/95 P, Guérin automobiles v Commission of the European Communities, [1997] ECR I-1503, para 36.

(59) Joined Cases 142 and 156/84, British American Tobacco Company and R. J. Reynolds Industries v Commission of the European Communities

[1987] ECR 249, paras 19/20.

(60) Case C-282/95 P, Guérin automobiles v Commission of the European Communities, [1997] ECR I-1503, para 37.

(61) Joined Cases T-213/95 and T-18/96, Stichting Certificatie Kraanverhuurbedrijf (SCK) and Federatie van Nederlandse Kraanbedrijven (FNK) v

Commission of the European Communities, [1997] ECR 1739, para 57.

(62) The notion of ‘diligence’ on the part of the complainant is used by the Court of First Instance in Case T-77/94, Vereniging van Groothandelaren in

Bloemkwekerijprodukten and Others v Commission of the European Communities. [1997] ECR II-759, para 75.

(63) Article 6(2) of Commission Regulation No [. . .].

(64) Article 287 EC, Article 28 of Regulation (EC) No 1/2003 and Articles 15-17 of Regulation No [. . .].

(65) Article 27(2) of Regulation (EC) No 1/2003.

(66) Article 7(2) of Regulation No [. . .]; Case C-282/95 P, Guérin automobiles v Commission of the European Communities, [1997] ECR I-1503, para

36.

(67) Constant case law, cf.

i.a. Case T-114/92, Bureau Européen des Médias et de l'Industrie Musicale (BEMIM) v Commission of the European

Communities, [1995] ECR II-147, para 41.

(68) Constant case law since Case 210/81, Oswald Schmidt, trading as Demo-Studio Schmidt v Commission of the European Communities, [1983]

ECR 3045.

(69) Case T-575/93, Casper Koelman v Commission of the European Communities, [1996] ECR II-1, paras 41-43.

(70) Depending on the case, Member States' competition authorities may equally be well placed to adopt interim measures.

(71) Case 145/83, Stanley George Adams v Commission of the European Communities, [1985] ECR 3539.

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ANNEX

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on informal guidance relating to novel questions concerning Articles 81 and 82 of the EC Treaty
that arise in individual cases (guidance letters)

Draft Commission Notice

I. REGULATION (EC) No 1/2003

II. FRAMEWORK FOR ASSESSING WHETHER TO ISSUE A

GUIDANCE LETTER

1. Regulation (EC) No 1/2003 (1) sets up a new enforcement
system for Articles 81 and 82 of
the Treaty. While
designed to restore the focus on the primary task of
effective enforcement of the competition rules, the Regu-
lation also creates legal certainty inasmuch as agreements
which fall under Article 81(1) but fulfil the conditions in
Article 81(3) are valid and fully enforceable ab initio
without a prior decision by a competition authority
(Article 1 of Regulation (EC) No 1/2003).

2. The framework of Regulation (EC) No 1/2003, while intro-
ducing parallel competence of the Commission, Member
States' competition authorities and Member States' courts
to apply Article 81 and 82 in their entirety, limits risks of
inconsistent application by a range of measures, thereby
certainty for
ensuring the primary aspect of
companies as reflected in the case law of the Court of
Justice,
i.e. that the competition rules are applied in a
consistent way throughout the Community.

legal

3. Undertakings are generally well placed to assess the legality
of their actions in such a way as to enable them to take an
informed decision on whether
to go ahead with an
agreement or conduct and in what form. They are close
to the facts and dispose of
the framework of block
exemption regulations, case law and case practice as well
as extensive guidance in Commission Guidelines and
Notices (2).

4. Alongside the reform of the rules implementing Articles
81 and 82 through Regulation (EC) No 1/2003,
the
Commission has conducted a review of block exemption
regulations, Commission notices and guidelines, with a
view to further
economic
operators. The Commission has also produced guidelines
on the application of Article 81(3) (3). This allows under-
takings in the vast majority of cases to reliably assess their
agreements with regard to Article 81.

self-assessment by

assist

5. Where cases, despite the above elements, give rise to
genuine uncertainty because they present novel or unre-
solved questions for the application of Articles 81 and 82,
individual undertakings may wish to seek informal
guidance from the Commission (4).

6. Where it considers it appropriate and subject

to its
enforcement priorities,
the Commission may provide
informal guidance on novel questions concerning the
interpretation of Articles 81 and/or 82 in a written
statement (guidance letter).

The present Notice explains details about this instrument.

to

prosecute

effectively

7. Regulation (EC) No 1/2003 confers powers on the
sanction
Commission
infringements against Articles 81 and 82 (5). One major
objective of
efficient
enforcement of
the EC competition rules by removing
the former notification system and thus allowing the
Commission to focus its enforcement policy on the most
serious infringements (6).

the Regulation is

to ensure

and

8. While Regulation (EC) No 1/2003 is without prejudice to
the ability of the Commission to issue informal guidance
to individual undertakings (7), as set out in the present
Notice, the primary objective of the Regulation to ensure
effective enforcement should not be affected by the possi-
bility to issue informal guidance. The Commission may in
any case provide informal guidance to individual under-
takings only in so far as this is compatible with the
enforcement priorities.

9. Subject to point 8, the Commission seized with a request
for a guidance letter will consider whether it is appropriate
to process such a request. The issuing of a guidance letter
may only be considered if
the following cumulative
conditions are fulfilled:

(a) The substantive assessment of an agreement, decision
or practice with regard to Articles 81 and/or 82 of the
Treaty, poses a question of application of the law for
which there is no clarification in the existing EC legal
framework or publicly available general guidance nor
precedent
in case law, decision-making practice or
previous guidance letters.

(b) A prima facie evaluation of the specificities and back-
ground of the case suggests that the clarification of the
novel question through a guidance letter is useful,
taking into account the following elements:

— the economic importance from the point of view
of the consumer of the goods or services concerned
by the agreement, decision or practice, and/or

— the extent

to which the agreement, decision or
practice corresponds or is liable to correspond to
a more widely spread economic usage in the
marketplace and/or

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— the scope of the investments related to the trans-
action in relation to the size of the companies
concerned and the extent to which the transaction
affects a structural operation such as the creation
of a non-full function joint venture.

(c) The guidance letter can be issued on the basis of the
i.e. no further fact-finding is

information provided,
required.

15. There is no form. A memorandum should be presented

which clearly states:

— the identity of all undertaking(s) or association(s) of
undertakings concerned as well as a single address
for contacts with the Commission;

— the specific questions on which guidance is sought;

10. Furthermore, the Commission will not consider a request
for a guidance letter in either of the following circum-
stances:

— full and exhaustive information on all points relevant
for an informed evaluation of the questions raised,
including pertinent documentation;

— the questions raised in the request are identical or
similar to issues raised in a case pending before the
European Court of First
Instance or the European
Court of Justice;

— a detailed reasoning, having regard to point 9(a), why
the request presents (a) novel question(s) and what are
the exact points on which guidance is sought;

— the agreement, decision or practice to which the
request refers is subject to proceedings pending with
the Commission, a Member State court or Member
State competition authority.

11. The Commission will not consider hypothetical questions
and will not
issue guidance letters on agreements or
practices that are no longer applied by the parties. Under-
takings may however present a request for a guidance
letter
from the Commission in relation to questions
raised by an agreement, decision or practice that they
envisage, i.e. before the implementation of that agreement,
decision or practice. In this case the transaction must have
reached a sufficient degree of development for a request to
be considered.

12. A request for a guidance letter is without prejudice to the
in
power of
accordance with Regulation (EC) No 1/2003 with regard
to the facts presented in the request.

the Commission to open proceedings

III. INDICATIONS ON HOW TO REQUEST GUIDANCE

13. A request can be presented by undertakings or associations
of undertakings within the meaning of Articles 81 and 82
which have entered into or
into an
agreement, decision or practice that could fall within the
scope of Articles 81 and/or 82 of the Treaty with regard
to questions of interpretation raised by such agreement,
decision or practice.

intend to enter

14. A request for a guidance letter should be addressed to the

following address:

Commission européenne
Competition DG
B-1049 Bruxelles

— all other information that permits to evaluate the
request in the light of the aspects explained in points
9-11 of this Notice;

— where

the

request

are
contains
considered business secrets, a clear identification of
these elements;

elements

that

— any other information or documentation relevant in

the specific individual case.

IV. PROCESSING OF THE REQUEST

16. The Commission will in principle evaluate the request on
the basis of the information provided. Notwithstanding
point 9c), the Commission may use additional information
at its disposal from public sources, former proceedings or
any other source and may ask the applicant(s) to provide
supplementary information.

17. The Commission may share the information submitted to
them with the services of the Member States' competition
authorities and receive input from them. It may discuss the
request with the Member States'
substance of
competition authorities before issuing a guidance letter.
Confidentiality of information provided by the applicants
will be respected.

the

18. Where no guidance letter is issued, the Commission shall

inform the applicant(s) accordingly.

19. An undertaking can withdraw its request at any point in
time. Information supplied in the context of a request for
guidance remains with the Commission and can be used in
subsequent procedures under Regulation (EC) No 1/2003.
This is also the case if undertakings withdraw their request.

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V. GUIDANCE LETTERS

20. A guidance letter sets out:

— a summary description of the facts on which it is

based;

legal reasoning underlying the under-
— the principal
standing of
the Commission on novel questions
relating to Articles 81 and/or 82 raised by the request.

21. A guidance letter may be limited to part of the questions
raised in the request. It may also include additional aspects
to those set out in the request.

22. Guidance letters will be published on the Commission's
web-site. The publication has regard to business secrets.

VI. THE EFFECTS OF GUIDANCE LETTERS

24. A guidance letter cannot prejudge the assessment of the

same question by the Community Courts.

25. A guidance letter does not bind the subsequent assessment
of the same issues by the Commission. A guidance letter
on questions relating to an agreement, decision or practice
does in particular not preclude the Commission from
examining a subsequent complaint related to the same
agreement, decision or practice. The Commission would
however,
if it receives a complaint concerning the same
facts as those underlying a previous guidance letter, and in
the absence of new aspects raised by that complaint that
had not been taken into account when the guidance letter
was prepared or any development in the case law of the
European Courts, normally take a previous guidance letter
into account.

23. Guidance letters are in the first place intended to help
undertakings carry out themselves an informed assessment
of their agreements and practices.

26. Guidance letters do not bind Member States' authorities or
courts having the power to apply Articles 81 and 82.

___________
(1) 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 (OJ L 1, 4.1.2003, p. 1).

(2) All texts mentioned are available at: http://europa.eu.int/comm/competition/index_en.html.
(3) Commission Notice — Guidelines on the application of Article 81(3) of the Treaty . . .
(4) Cf. Recital 38 of Regulation (EC) No 1/2003.
(5) Cf. in particular Articles 7 to 9, 12, 17-24, 29 of Regulation (EC) No 1/2003.
(6) Cf. in particular Recital 3 of Regulation (EC) No 1/2003.
(7) Cf. Recital 38 of Regulation (EC) No 1/2003.

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Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty

Draft Commission Notice

I. INTRODUCTION

1. Articles 81 and 82 of the Treaty are applicable to hori-
zontal and vertical agreements (1) and practices on the
part of undertakings which ‘may affect trade between
Member States’.

7. Article 82 on its part stipulates that ‘any abuse by one or
more undertakings of a dominant position within the
common market or in a substantial part thereof shall
be prohibited as incompatible with the common market
insofar as it may affect trade between Member States.’

2. In their

interpretation of Articles 81 and 82,

the
Community Courts have already substantially clarified
the content and scope of the concept of effect on trade
between Member States.

8. The effect on trade criterion also determines the scope of
application of Article 3 of Regulation (EC) No 1/2003 on
the implementation of
the rules on competition laid
down in Articles 81 and 82 of the Treaty (3).

are unlikely to be

3. The present guidelines set out the principles developed by
the Community Courts in relation to the interpretation of
the effect on trade concept of Articles 81 and 82. They
further spell out a rule indicating when agreements in
general
capable of appreciably
affecting trade between Member States (the no appre-
ciable affectation of
trade rule or NAAT-rule). The
guidelines are not intended to be exhaustive. The aim
is to set out the methodology for the application of the
effect on trade concept and to provide guidance on its
application in frequently occurring situations.

4. The present guidelines do not address the issue of what
constitutes an appreciable restriction of competition
under Article 81(1). This issue, which is distinct from
the ability of agreements to appreciably affect
trade
between Member States, is dealt with in the Commission
Notice on agreements of minor importance which do not
appreciably restrict competition under Article 81(1) of
the Treaty (2)
(the de minimis rule). The guidelines are
also not intended to provide guidance on the effect on
trade concept contained in Article 87(1) of the Treaty on
State aid.

5. These guidelines are without prejudice to the interpre-
tation of Articles 81 and 82 which may be given by
the Court of Justice and the Court of First Instance.

9. According to Article 3(1) the competition authorities and
courts of the Member States must apply Article 81 to
agreements, decisions by associations of undertakings or
concerted practices within the meaning of Article 81(1)
of the Treaty which may affect trade between Member
States within the meaning of that provision, when they
apply national competition law to such agreements,
decisions or concerted practices. Similarly, where the
the Member
competition authorities and courts of
States apply national competition law to any abuse
prohibited by Article 82 of the Treaty, they must also
apply Article 82 of the Treaty. Article 3(1) does not
prevent national competition authorities and courts
from applying only Articles 81 and 82 to agreements,
decisions
and to abusive
practices. It only obliges them to also apply Articles 81
and 82 when they apply national competition law to
it
such agreements and abusive practices. Moreover,
follows
application of
national competition law may not lead to the prohibition
of agreements, decisions by associations of undertakings
or concerted practices which may affect trade between
Member States but which do not restrict competition
within the meaning of Article 81(1) of the Treaty, or
which fulfil
the
Treaty or which are covered by a Regulation for the
application of Article 81(3) of the Treaty.

the conditions of Article 81(3) of

and concerted practices

from Article 3(2)

that

the

10. Member States, however, are not under Regulation (EC)
No 1/2003 precluded from adopting and applying on
their territory stricter national
laws which prohibit or
sanction unilateral conduct engaged in by undertakings.

II. THE EFFECT ON TRADE CRITERION

A. General principles

6. Article 81(1) provides

‘the following shall be
that
prohibited as incompatible with the common market:
agreements between undertakings, decisions of
all
associations of undertakings and concerted practices
trade between Member States and
which may affect
which have as their object or effect
the prevention,
restriction or distortion of
competition within the
common market.’

11. Finally it should be mentioned that Article 3(3) stipulates
that without prejudice to general principles and other
provisions of Community law, Article 3(1) and (2) do
not apply when the competition authorities and the
the Member States apply national merger
courts of
laws nor do they preclude the application of
control
provisions of national
law that predominantly pursue
an objective different from that pursued by Articles 81
and 82 of the Treaty.

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12. The

criterion is

effect on trade

an autonomous
Community law criterion, which must be assessed sepa-
rately in each case. It is a jurisdictional criterion, which
defines
application of Community
competition law (4). Community competition law is not
applicable to agreements and practices that are not
capable of appreciably affecting trade between Member
States.

scope of

the

13. The effect on trade criterion confines the scope of
application of Articles 81 and 82 to agreements and
practices that are capable of having a minimum level
In the
of cross-border effects within the Community.
words of
the
agreement or practice to affect trade between Member
States must be ‘appreciable’ (5).

the ability of

the Court of

Justice,

14. In the case of Article 81 of the Treaty, it is the agreement
as a whole that must be capable of affecting trade
between Member States. It is not required that each indi-
vidual part of the agreements, including any restriction of
is
competition which may flow from the agreement,
capable of doing so (6), provided that
the individual
restriction forms an integral part of the agreement in
question and does not constitute a separate agreement.
If the agreement as a whole is capable of affecting trade
between Member States, there is Community law juris-
diction in respect of the entire agreement, including any
parts of the agreement that individually do not affect
trade between Member States.

15. It is also immaterial whether or not the participation of a
is having an
particular undertaking in the agreement
appreciable effect on trade between Member States (7).
An undertaking cannot escape Community law juris-
diction merely because of
its own
contribution to an agreement, which itself is capable of
affecting trade between Member States, is insignificant.

that

fact

the

prohibiting exports is clearly capable of affecting trade
between Member States.

17. In the case of Article 82 it is the abuse that must affect
imply,
trade between Member States. This does not
that each element of behaviour must be
however,
assessed in isolation. Conduct
forms part of an
that
overall strategy pursued by the dominant undertaking
must be assessed in terms of its overall impact. Where
a dominant undertaking adopts various practices
in
pursuit of the same aim, for instance practices that aim
at eliminating or foreclosing competitors, it is sufficient
the practices,
for Article 82 to be applicable to all
forming part of this overall strategy, that at least one
of these practices is capable of affecting trade between
Member States (8).

18. It follows from the wording of Articles 81 and 82 and
the case law of
in the
application of the effect on trade criterion particularly
three elements must be addressed:

the Community Courts that

(a) The concept of ‘trade between Member States’,

(b) The notion of ‘may affect’, and

(c) The concept of appreciability.

B. The concept of ‘trade between Member States’

19. The concept of

‘trade’

limited to traditional
is not
exchanges of goods and services across borders (9). It is
a wider concept, covering all cross-border economic
activity (10). This interpretation, which is consistent with
the fundamental objective of the Treaty to promote free
implies
movement,
trade
encompasses
flows of goods and services between
Member States as well as other forms of economic
activity such as establishment (11).

concept

that

the

of

16. It

is not necessary for

agreements may
For
States.

the purposes of establishing
Community law jurisdiction to establish a link between
the alleged restriction of competition and the capacity of
the agreement to affect trade between Member States.
trade
Non-restrictive
between Member
selective
distribution agreements based on purely qualitative
selection criteria justified by the nature of the products,
restrictive of competition within the
which are not
meaning of Article 81(1), may nevertheless affect trade
between Member States. However, the alleged restrictions
of an agreement may provide a clear indication as to the
capacity of
trade between
Member States. For instance, a distribution agreement

also
example,

the agreement

to affect

affect

20. According to settled case law the concept of ‘trade’ also
encompasses cases where agreements or practices affect
the competitive structure on the market. Agreements and
practices that affect the competitive structure inside the
Community by eliminating or threatening to eliminate a
competitor operating within the Community may be
subject to the Community competition rules (12). When
an undertaking
eliminated the
competitive structure within the Community is affected
and so are the economic activities in which the under-
taking is engaging.

risks being

is or

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economic activities

21. The requirement that there must be an effect on trade
‘between Member States’ implies that there must be an
impact on the flow of goods and services or other
relevant
two
Member States. It is not required that the agreement or
practice affects trade between one Member State and the
whole of another Member State. Articles 81 and 82 may
be applicable also in cases involving part of a Member
State provided that the effect on trade is appreciable (13).

involving at

least

22. The application of the effect on trade criterion is inde-
pendent of the definition of relevant geographic markets.
Trade between Member States may be affected also in
cases where
is national or
relevant market
sub-national (14).

the

C. The notion of ‘may affect’

23. The function of the notion of ‘may affect’ is to define the
nature of the required impact on trade between Member
States. According to the standard test developed by the
Court of Justice the notion of ‘may affect’ implies that it
must be possible to foresee with a sufficient degree of
probability on the basis of a set of objective factors of
law or fact that the agreement or practice may have an
influence, direct or indirect, actual or potential, on the
trade between Member States (15) (16). As
pattern of
mentioned in point 0 above the Court of Justice has in
addition developed a test based on whether or not the
agreement or practice affects the competitive structure. In
cases where the agreement or practice is liable to affect
the
the Community,
Community law jurisdiction is established.

competitive

structure

inside

24. The ‘pattern of

trade’-test developed by the Court of
Justice contains the following main elements, which are
dealt with in the following sections:

(a)

‘A sufficient degree of probability on the basis of a set
of objective factors of law or fact’,

(b) An influence on the ‘pattern of

trade between

Member States’,

(c)

‘A direct or indirect, actual or potential influence’ on
the pattern of trade.

(i) A sufficient degree of probability on the basis of a set

of objective factors of law or fact

25. The assessment of trade effects is based on objective
factors. Subjective intent on the part of the undertakings
concerned is not required. If, however, there is evidence
that undertakings have intended to affect trade between
Member States, for example because they have sought to
hinder exports to or imports from other Member States,
this is a relevant factor to be taken into account.

26. The words ‘may affect’ and the reference by the Court of
Justice to ‘a sufficient degree of probability’ imply that it
is not required for Community law jurisdiction to be
established that the agreement or practice will actually
have or has had an effect on trade between Member
States. It is sufficient that the agreement or practice is
‘capable’ of having such an effect (17).

27. There is no obligation or need to calculate the actual
volume of trade between Member States affected by the
in the case of
agreement or practice. For example,
agreements prohibiting exports to other Member States
there is no need to estimate what would have been in the
absence of
trade
between the Member States concerned. This interpre-
tation is consistent with the jurisdictional nature of the
effect on trade criterion. Community law jurisdiction
extends to categories of agreements and practices that
are capable of having cross-border effects,
irrespective
of whether a particular agreement or practice actually
has such effects.

the level of parallel

the agreement

28. The assessment under

the effect on trade criterion
depends on a number of factors that individually may
not be decisive (18). The relevant
factors include the
nature of the agreement and practice, the nature of the
products covered by the agreement or practice and the
position
undertakings
and
concerned (19).

importance

the

of

the agreement or practice to affect

29. The nature of the agreement and practice provides an
indication from a qualitative point of view of
the
trade
ability of
between Member States. Some agreements and practices
are by their very nature capable of affecting trade
between Member States, whereas others require more
detailed analysis in this respect. Cross-border cartels are
an example of
joint ventures
the former, whereas
confined to the territory of a single Member State are
an example of
further
examined in section III below, which deals with various
categories of agreements and practices.

latter. This

aspect

the

is

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30. The nature of the products covered by the agreements or
practices also provides an indication of whether trade
between Member States is capable of being affected.
When by their nature products are easily traded across
borders or are important for undertakings that want to
enter or expand their activities in other Member States,
Community jurisdiction is more readily established than
in cases where due to their nature there is limited
demand for products offered by suppliers from other
Member States and where the products are of limited
interest from the point of view of cross-border estab-
lishment or
the economic activity
carried out from such place of establishment (20). Estab-
lishment means the setting up of a new business in
another Member State.

the expansion of

31. The market position of the undertakings concerned and
their sales volumes are indicative from a quantitative
point of view of
the agreement or
the ability of
practice concerned to affect
trade between Member
States. This aspect, which forms an integral part of the
assessment of appreciability,
is addressed in section D
below.

can also be affected when an agreement or practice
causes an increase in trade. Indeed, Community law juris-
diction is established if trade between Member States is
likely to develop differently with the agreement or
practice compared to the way in which it would likely
have developed in the absence of
the agreement or
practice (22).

35. This interpretation reflects the fact that the effect on
trade criterion is a jurisdictional one, which serves to
distinguish those agreements and practices which are
capable of having cross-border effects so as to warrant
an examination under the Community competition rules,
from those agreements and practices, which do not.

(iii) A ‘direct or indirect, actual or potential influence’ on

the pattern of trade

36. The influence of agreements and practices on patterns of
trade between Member States must be ‘direct or indirect,
actual or potential’.

32. In addition to the factors already mentioned,

it

relevant

in which the

economic and legal

is
the legal and factual
necessary to take account of
agreement or practice
environment
context
operates. The
into the potential
for trade between
provides insight
Member States.
If there are absolute legal barriers to
cross-border trade between Member States, trade is only
capable of being affected if these barriers are likely to
disappear in the foreseeable future. In cases where legal
barriers are not absolute but merely render cross-border
activities more difficult, it is of the utmost importance to
ensure that agreements and practices do not
further
that do so are
hinder
capable of affecting trade between Member States. The
same is true in cases where there are other high barriers
to cross-border activities, which are external
to the
agreement or practice. To the extent that in spite of
such barriers cross-border activities
remain possible,
agreements and practices that create further obstacles to
trade are subject to Articles 81 and 82.

such activities. Agreements

(ii) An influence on the ‘pattern of

trade between

Member States’

33. For Articles 81 and 82 to be applicable there must be an
trade between Member

influence on the ‘pattern of
States’.

34. The term ‘pattern of trade’ is neutral. It is not a condition
that trade is restricted or reduced (21). Patterns of trade

37. Direct effects on trade between Member States normally
in relation to the products covered by an
occur
agreement or practice. When, for example, producers of
a particular product in different Member States agree to
share markets, direct effects are produced on trade
between Member States on the market for the products
in question. Another example of direct effects being
produced is when a supplier limits rebates to distributors
to products sold within the Member State in which the
distributors are established. Such practices increase the
relative
exports,
rendering export sales less attractive and less competitive.

products

destined

price

for

of

undertakings

use
that
covered by
can,
effects

of
activities
rely on the products
or practice (23).
Such

38. Indirect effects often occur in relation to products that
are related to those covered by an agreement or practice.
Indirect effects may,
for example, occur where an
agreement or practice has an impact on cross-border
or
economic
the
otherwise
for
agreement
instance, arise where the agreement or practice relates
to an intermediate product, which is not
traded, but
which is used in the supply of a final product, which
is traded. The Court of
trade
between Member States was capable of being affected
in the case of an agreement
involving the fixing of
prices of spirits used in the production of cognac (24).
Whereas the raw material was not exported, the final
product — cognac — was exported.
In such cases
Community competition law is thus applicable, if trade
in the final product
is capable of being appreciably
affected.

Justice has held that

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or

For

practice.

instance,

39. Indirect effects on trade between Member States may also
in relation to the products covered by the
occur
agreement
agreements
whereby a manufacturer limits warranties to products
sold by distributors within their Member State of estab-
lishment create disincentives for consumers from other
Member States to buy the products because they would
not be able to invoke the warranty (25). Export by official
distributors and parallel traders is made more difficult
because in the eyes of consumers the products are less
attractive without the manufacturer's warranty (26).

40. Actual effects on trade between Member States are those
that are produced by the agreement or practice once it is
implemented. An agreement between a supplier and a
distributor within the same Member State, for instance,
that prohibits exports to other Member States is likely to
produce actual effects on trade between Member States.
Without the agreement the distributor would have been
free to engage in export sales. It is recalled, however, that
it is not required that actual effects are demonstrated. It is
sufficient that the agreement or practice is capable of
having such effects.

41. Potential effects are those that may occur in the future
with a sufficient degree of probability. In other words,
foreseeable market developments must be taken into
account (27). Even if
trade is not capable of being
affected at the time when the agreement is concluded
or the practice is implemented, Articles 81 and 82
remain applicable if
the factors which led to that
conclusion are likely to change in the foreseeable
to consider the
future.
impact of
the
Community or the Member State in question and other
foreseeable measures aiming at eliminating legal barriers
to trade.

it
liberalisation measures

In this respect

adopted by

is relevant

effects. The

not mean that the analysis can be based on abstract and
hypothetical
likelihood of a particular
agreement
to produce indirect and potential effects
must be explained by the authority or party claiming
that trade between Member States is capable of being
appreciably affected. Hypothetical and speculative effects
are not sufficient for establishing Community law juris-
diction.

D. The concept of appreciability

(i) General principle

a

fall outside

law jurisdiction

limiting Community

certain magnitude. Agreements
scope of

44. The effect on trade criterion incorporates a quantitative
element,
to
agreements and practices that are capable of having
effects of
and
application of
practices
Articles 81 and 82 when they affect the market only
insignificantly having regard to the weak position of
the
the undertakings concerned on the market
products
be
appraised in particular by reference to the position and
the importance of
the relevant undertakings on the
market for the products concerned (30).

question (29). Appreciability

for
can

the

in

45. In a number of cases concerning imports and exports the
Court of Justice has considered that the appreciability
requirement was fulfilled when the sales of the under-
takings concerned have accounted for about 5 % of the
market (31). Market share alone, however, has not always
it is
been considered the decisive factor. In particular,
necessary also to take account of the turnover of the
undertakings in the products concerned (32).

42. Moreover, even if at a given point

in time market
for
conditions are unfavourable to cross-border trade,
example because prices are similar
in the Member
States in question, trade may still be capable of being
affected if
the situation may change as a result of
changing market conditions (28). What matters is the
trade
ability of
between Member States and not whether at any given
point in time it actually does so.

the agreement or practice to affect

43. The inclusion of

indirect and potential effects in the
analysis of effects on trade between Member States does

46. Appreciability can thus be measured both in absolute
terms (turnover) and in relative terms, comparing the
position of
the undertaking(s) concerned to that of
other players on the market (market share). This focus
on the position and importance of
the undertakings
concerned is consistent with the concept of ‘may affect’,
which implies that the assessment is based on the ability
of
trade between
Member States rather than on the impact on actual
flows of goods and services across borders. The market
position of
concerned and their
turnover in the products concerned are indicative of
the ability of an agreement or practice to affect trade
between Member
are
States. These
reflected in the de minimis rule set out in point 0 below.

the agreement or practice to affect

the undertakings

two elements

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is

the

appreciable. This

impact on trade

47. The application of the appreciability test does not neces-
sarily require that relevant markets be defined and market
shares calculated (33). The sales of an undertaking in
absolute terms may be sufficient to support a finding
is
that
particularly so in the case of agreements and practices
that by their very nature are liable to affect trade between
they concern
Member States,
imports or
several
in such circumstances
Member States. The fact
turnover
in the products covered by the agreement
may be sufficient for a finding of an appreciable effect
on trade between Member States is reflected in the
positive presumption set out in point 0 below.

exports or because

example because

they cover

that

for

capable of affecting trade between Member States. The
reason for this presumption is the fact that the activities
of SMEs are normally local or at most regional in nature.
However, SME's may be subject to Community law juris-
diction in particular where they engage in cross-border
economic activity. Secondly, it is in the present context
possible to set out a general rule indicating when trade is
normally not capable of being appreciably affected, i.e. a
negative rebuttable presumption, defining the absence of
an appreciable effect on trade between Member States
all
(the NAAT-rule).
The NAAT-rule
agreements within the meaning of Article 81(1)
irres-
the restrictions contained in
pective of the nature of
the agreement,
including restrictions that have been
identified as hardcore restrictions in Commission block
exemption regulations and guidelines.

applies

to

48. Agreements and practices must always be considered in
the economic and legal context in which they occur. In
the case of vertical agreements it may be necessary to
have regard to any cumulative effects of parallel networks
of similar agreements (34). Even if a single agreement or
network of agreements is not capable of appreciably
affecting trade between Member States,
the effect of
parallel networks of agreements, taken as a whole, may
be capable of doing so.

51. Without prejudice to point 0 below, this negative defi-
nition of appreciability does not imply that agreements,
which do not fall within the criteria set out below, are
automatically capable of appreciably affecting trade
between Member States. A case by case analysis is
necessary.

(ii) Quantification of appreciability

52. The Commission holds

in principle
agreements are not capable of appreciably affecting
trade between Member States when the following cumu-
lative conditions are met:

the view that

49. The assessment of appreciability depends on the circum-
stances of each individual case, in particular the nature of
the agreement and practice, the products that they cover
and the market position of the undertakings concerned.
When by its very nature the agreement or practice is
capable of affecting trade between Member States, the
appreciability threshold is lower than in the case of
agreements and practices that are not by their very
nature
capable of affecting trade between Member
States. The stronger the market position of the under-
an
takings
trade
agreement or practice
between Member
can be held to do so
appreciably (35).

is
affecting

capable of

concerned,

the more

likely it

States

that

is possible, however,

50. It is not possible to establish general quantitative rules
covering all categories of agreements and practices indi-
cating when trade between Member States is capable of
being appreciably affected.
to
It
indicate when trade is normally not capable of being
appreciably affected. Firstly, in its notice on agreements
of minor importance which do not appreciably restrict
competition under Article 81(1) of the Treaty (the de
stated that
minimis
agreements between small and medium-sized under-
takings (SMEs) as defined in the Annex to Commission
Recommendation 96/280/EC (37)
not

the Commission has

normally

rule) (36)

are

(a) The aggregate market share of the parties on any
relevant market within the Community affected by
the agreement does not exceed 5 %, and

(b) In the case of horizontal agreements, the aggregate
the undertakings
covered by the

annual Community turnover of
concerned (38)
in the products
agreement does not exceed Euro 40 million.

In the case of vertical agreements,
the aggregate
annual Community turnover of the supplier in the
products covered by the agreement does not exceed
40 million Euro.
case of purchasing
In the
agreements giving rise to buyer power concerns,
the relevant turnover shall be that of the buyer(s).
the relevant
In the case of
turnover
the
licensees in the products incorporating the licensed
technology and the licensor's own turnover in such
products.

licence agreements
shall be the aggregate turnover of

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In cases where

This NAAT-rule remains applicable where during two
successive calendar years the above turnover threshold
is not exceeded by more than 10 % and the above
threshold is not exceeded by more than 2
market
agreement
percentage points.
concerns an emerging not yet existing market and
where as a consequence the parties neither generate
relevant turnover nor accumulate any relevant market
share,
In such cases
appreciability may have to be assessed on the basis of
the position of the parties on related product markets or
their strength in technologies relating to the agreement.

the NAAT-rule does not apply.

the

53. The Commission also holds the view that where an
agreement or practice by its very nature is capable of
affecting trade between Member States,
for example,
imports and exports or covers
because it concerns
several Member States,
there is a rebuttable positive
presumption that such effects on trade are appreciable
when the turnover of
in the products
covered by the agreement calculated as indicated in
points 52 and 54 exceeds Euro 40 million. This
presumption does not imply that trade is not capable
of being affected by such agreements and practices
even when the turnover threshold is below Euro 40
million but where the market position of the under-
takings
stated in the
previous point
the general NAAT-rule only applies
where both conditions mentioned above are satisfied.

concerned exceeds 5 %. As

the parties

54. The turnover threshold of Euro 40 million is calculated
on the basis of
total Community sales excluding tax
financial year by the undertakings
during the last
concerned, cf. point 52 above, of the products covered
by the agreement (the contract products). Sales between
entities that
the same undertaking are
excluded (39).

form part of

it

55. In order to apply the market share threshold,

is
necessary to determine the relevant market (40). This
consists of the relevant product market and the relevant
geographic market. The market
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.

shares

are

56. In the case of networks of agreements entered into by the
same supplier with different distributors, sales made
through the entire network are taken into account.

57. Contracts that form part of the same economic trans-
action constitute a single agreement for the purposes of

the NAAT-rule. Undertakings cannot bring themselves
inside this rule by dividing up an agreement that from
an economic perspective forms a whole.

III. THE APPLICATION OF THE ABOVE PRINCIPLES TO

COMMON TYPES OF AGREEMENTS AND ABUSES

58. The condition that agreements and practices must be
capable of appreciably affecting trade between Member
States is general and does not depend on the nature of
the agreement or practice. Accordingly, the NAAT-rule
set out in the preceding section applies to all agreements
including agreements
that by their very nature are
capable of affecting trade between Member States, cf.
point 0 above, as well as agreements that involve trade
with undertakings located in third countries, cf. section C
below.

59. However, outside the scope of the NAAT-rule the nature
the agreement or practice is relevant. As already
of
indicated in point 0 above,
an
agreement or practice to affect trade between Member
States is, inter alia, a function of its nature. Some types
of agreements and practices are by their very nature
capable of affecting trade between Member States,
whereas that is not so with regard to other types of
agreements and practices.

capacity of

the

60. In the following sections a principal distinction is drawn
between agreements and practices that cover several
Member States and agreements and practices that are
confined to a single Member State or to part of a
single Member State. These two main categories are
broken down into further subcategories based on the
nature of the agreement or practice involved. Agreements
and practices involving third countries are also dealt
with.

A. Agreements and abuse covering or implemented

in several Member States

61. Agreements and practices covering or implemented in
several Member States are in almost all cases by their
very nature capable of affecting trade between Member
States. When the relevant turnover exceeds the threshold
set out in point 0 above it will therefore in most cases
not be necessary to conduct a detailed analysis of
trade between Member States is capable of
whether
being affected. However,
in order to provide guidance
also in these cases and to illustrate the principles
developed in section II above,
to explain
what are the factors that are normally used to support
a finding of Community law jurisdiction.

is useful

it

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(i) Agreements concerning imports and exports

62. Agreements between undertakings

Such

States.

irrespective

agreements,

in two or more
Member States that concern imports and exports are by
their very nature capable of affecting trade between
Member
of
whether they are restrictive of competition or not, have
a direct impact on patterns of trade between Member
States.
example, which
concerned an agreement between a French producer
and a German distributor covering more than 10 % of
exports of cement from France to Germany, amounting
in total to 350 000 tonnes per year, the Court of Justice
held that it was impossible to take the view that such an
(appreciably) affecting
agreement was not capable of
trade between Member States (41).

In Kerpen & Kerpen,

for

63. This

that

includes

category

agreements

impose
restrictions on imports and exports, including restrictions
on active and passive sales and resale by buyers to
customers in other Member States (42).
In these cases
there is an inherent link between the alleged restriction
of competition and the effect on trade, since the very
purpose of the restriction is to prevent flows of goods
and services between Member States, which would
otherwise be possible.
the
is
parties
to the agreement are located in the same
Member State or in different Member States.

immaterial whether

It

(ii) Cartels covering several Member States

cartels harmonise

64. Cartel agreements such as those involving price fixing
and market sharing covering several Member States are
by their very nature capable of affecting trade between
Member States. Cross-border
the
conditions of competition and affect the interpenetration
of trade by cementing traditional patterns of trade (43).
When undertakings agree to allocate geographic terri-
tories, sales from other areas into the allocated territories
are capable of being eliminated or reduced. When under-
takings agree to fix prices, they eliminate competition
and any resulting price differentials that would entice
both competitors and customers to engage in cross-
border trade. When undertakings agree on sales quotas
traditional patterns of trade are preserved. The under-
takings concerned abstain from expanding output and
in other
thereby from serving potential
Member States.

customers

normally only formed when the participating under-
takings together hold a large share of the market as
this allows them to raise price or reduce output.

(iii) Horizontal cooperation agreements covering several

Member States

66. This section covers various types of horizontal coop-
eration agreements. Horizontal cooperation agreements
may for instance take the form of agreements whereby
two or more undertakings cooperate in the performance
of a particular economic activity such as production and
distribution (44). Often such agreements are referred to as
joint ventures. However, joint ventures that perform on a
lasting basis
an autonomous
economic entity are covered by the Merger Regu-
lation (45). At
the Community such full
function joint ventures
are not dealt with under
Articles 81 and 82 (46). This section therefore does not
deal with full-function joint ventures.
In the case of
function joint ventures the joint entity does
non-full
not operate as an autonomous supplier (or buyer) on
any market. It merely serves the parents, who themselves
operate on the market (47).

functions of

the level of

the

all

67. Joint ventures which engage in activities in two or more
Member States or which produce an output that is sold
by the parents in two or more Member States affect the
commercial activities of the parties in those areas of the
Community. Such agreements are therefore normally by
their very nature capable of affecting trade between
Member States compared to the situation without the
agreement (48). Patterns of trade are affected when under-
takings switch their activities to the joint venture or use
it for the purpose of establishing a new source of supply
in the Community.

68. Trade may also be capable of being affected where a joint
venture produces an input
for the parent companies
which is subsequently further processed or incorporated
into a product by the parent undertakings. This is likely
to be the case where the input in question was previously
sourced from suppliers in other Member States, where
the parents previously produced the input
in other
Member States or where the final product is traded in
more than one Member State.

65. The effect on trade produced by cross-border cartels is
generally also by its very nature appreciable due to the
market position of the parties to the cartel. Cartels are

69. In the assessment of appreciability it is important to take
account of the sales of the parents and not only those of
the joint entity created by the agreement, given that the
joint venture does not operate as an autonomous supplier
or buyer on any market.

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(iv) Vertical agreements implemented in several Member

States

70. Vertical agreements and networks of similar vertical
agreements implemented in several Member States are
normally capable of affecting trade between Member
States, if they cause trade to be channelled in a particular
way. Networks of selective distribution agreements imple-
mented in two or more Member States for example,
trade in a particular way because they limit
channel
trade to members of the network, thereby affecting the
patterns of trade compared to the situation without the
agreement (49).

71. Trade between Member States is also capable of being
affected by vertical agreements that have foreclosure
effects. This may for instance be the case of agreements
whereby distributors in several Member States agree to
buy only from a particular supplier or to sell only his
products. Such agreements may limit trade between the
Member States in which the agreements are implemented
or from Member States not covered by the agreements.
Foreclosure may result
from individual agreements or
from networks of agreements. When an agreement or
several Member
networks of agreements
the
ability of
foreclosure
States have
agreement or
trade between
Member States is normally by its very nature appreciable.

that cover
the
effects,
to affect

agreements

72. Agreements between suppliers and distributors which
provide for resale price maintenance (RPM) and which
cover two or more Member States are normally also by
their very nature capable of affecting trade between
Member States (50). Such agreements alter
the price
levels that would likely have existed in the absence of
the agreements and thereby affect patterns of trade.

(v) Abuses of dominant positions

covering several

Member States

73. In the case of abuse of a dominant position it is useful to
distinguish between abuses that raise barriers to entry or
eliminate competitors (exclusionary abuses) and abuses
its
whereby

undertaking

dominant

exploits

the

economic power for instance by charging excessive or
discriminatory prices (exploitative abuses). Both kinds of
abuse may be carried out either through agreements,
which are equally subject to Article 81(1), or through
as Community
unilateral
competition law is concerned is subject only to Article
82.

conduct, which

far

as

74. In the case of exploitative abuses such as discriminatory
rebates, the impact is on down-stream trading partners,
which either benefit or suffer, altering their competitive
position and affecting patterns of trade between Member
States.

less

likely

system are

to purchase

the dominant

75. When a dominant undertaking engages in exclusionary
conduct in more than one Member State, such abuse is
normally by its very nature capable of affecting trade
between Member States. Such conduct has a negative
impact on competition in an area extending beyond a
single Member State, being likely to divert trade from
the course it would have followed in the absence of
the abuse. For example, patterns of trade are capable of
being affected where the dominant undertaking grants
loyalty rebates. Customers covered by the exclusionary
rebate
from
firm than they would
competitors of
otherwise have done. Exclusionary conduct
that aims
directly at eliminating a competitor such as predatory
pricing is also capable of affecting trade between
Member States because of its impact on the competitive
structure inside the Community (51).When a dominant
firm engages in behaviour with a view to eliminating a
competitor operating in more than one Member State,
trade is capable of being affected in several ways. First,
there is a risk that the affected competitor will cease to
be a source of supply inside the Community. Even if the
targeted undertaking
future
is not
competitive conduct is likely to be affected, which may
also have an impact on trade between Member States.
the abuse may have an impact on other
Secondly,
the
abusive
its
competitors.
dominant undertaking can signal to its competitors that
it will discipline attempts to engage in real competition.
Thirdly, the very fact of eliminating a competitor may be
sufficient for trade between Member States to be capable
of being affected. This may be the case even where the
undertaking that risks being eliminated mainly engages in
exports
effective
competitive structure inside the Community risks being
further impaired, there is Community law jurisdiction.

to third countries (52). Once

eliminated,

behaviour

Through

the

its

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10.10.2003

76. Where a dominant undertaking engages in exploitative or
exclusionary abuse in more than one Member State, the
capacity of the abuse to affect trade between Member
States will normally also by its very nature be appre-
ciable. Given the market position of the dominant under-
taking concerned and the fact that the abuse is imple-
mented in several Member States, the scale of the abuse
and its likely impact on patterns of trade is normally such
that trade between Member States is capable of being
In the case of an exploitative
appreciably affected.
abuse such as price discrimination, the abuse alters the
competitive position of
in several
Member States.
In the case of exclusionary abuses,
including abuses that aim at eliminating a competitor,
the economic activity engaged in by competitors in
several Member States is affected. The very existence of
a dominant position in several Member States implies
that competition in a substantial part of the common
market is already weakened (53). When a dominant under-
taking through recourse to abusive conduct
further
for example by eliminating a
weakens competition,
competitor,
trade
the abuse to affect
between Member States is normally appreciable.

trading partners

the ability of

B. Agreements and abuses covering a single or only

part of a Member State

It

77. When agreements or abusive practices cover the territory
of a single Member State, it may be necessary to proceed
with a more detailed inquiry into the ability of
the
agreements or abusive practices to affect trade between
Member States. It is recalled that for there to be an effect
on trade between Member States it is not required that
trade is reduced.
that an appreciable
is sufficient
change is capable of being caused in the pattern of
in many
trade between Member States. Nevertheless,
cases involving a single Member State the nature of the
alleged infringement and, in particular, its propensity to
foreclose the national market provides a good indication
of the capacity of the agreement or practice to affect
trade between Member States. The examples mentioned
hereafter
exhaustive. They merely provide
examples of cases where agreements confined to the
territory of a single Member State can be considered
capable of affecting trade between Member States.

are not

basis by hindering the economic penetration which the
Treaty is designed to bring about (54).

79. The capacity of such agreements to partition the internal
market follows from the fact that undertakings, partici-
pating in cartels in only one Member State, normally
need to take action to exclude competitors from other
Member States (55).
they do not, and the product
the cartel
covered by the agreement
risks being undermined by competition from under-
takings from other Member States. Such agreements are
normally also by their very nature capable of having
appreciable effects on trade between Member States,
given the market coverage required for such cartels to
be effective.

is tradable (56),

If

80. Given the

the

fact

that

effect on trade

concept
encompasses potential effects, it is not decisive whether
such action against competitors from other Member
States is in fact adopted at any given point in time. If
the cartel price is similar to the price prevailing in other
Member States, there may be no immediate need for the
members of the cartel to take action against competitors
from other Member States. What matters is whether or
not they are likely to do so, if market conditions change.
The likelihood thereof depends on the existence or
otherwise of natural barriers to trade in the market,
including in particular whether or not the product in
In a case involving certain retail
question is tradable.
banking services (57)
for
the Court of
example, held that
trade was not capable of being
appreciably affected because the potential for trade in
the specific products concerned was very limited and
because they were not an important
in the
choice made by undertakings from other Member States
regarding whether or not to establish themselves in the
Member State in question (58).

Justice has,

factor

(i) Cartels covering a single Member State

78. Horizontal cartels covering the whole of a Member State
are normally capable of affecting trade between Member
States. Indeed, the Community Courts have consistently
held that agreements extending over the whole territory
of a Member State by their very nature have the effect of
reinforcing the partitioning of markets on a national

the extent

81. The extent to which the members of a cartel monitor
prices and competitors from other Member States can
to which the
provide an indication of
products covered by the cartel are tradable. Monitoring
suggests that competition and competitors from other
Member States are perceived as a potential threat to the
cartel. Moreover, if there is evidence that the members of
the cartel have deliberately fixed the price level in light of
the price level prevailing in other Member States (limit
pricing), it is an indication that the products in question
are tradable and that trade between Member States is
capable of being affected.

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82. Trade is normally also capable of being affected when the
members of a national cartel
temper the competitive
constraint imposed by competitors from other Member
States by inducing them to join the restrictive agreement
their exclusion from the agreement places the
or if
competitors at a competitive disadvantage (59). In such
cases the agreement either prevents these competitors
from exploiting any competitive advantage that
they
have, or raises their costs thereby having a negative
impact on their competitiveness and their sales. In both
cases
of
competitors from other Member States on the national
in question. The same is true when a cartel
market
agreement
is
resell products
that
concluded between undertakings
imported from other Member States (60).

single Member State

confined to a

operations

agreement

hampers

the

the

(ii) Horizontal cooperation agreements covering a single

Member State

83. Horizontal cooperation agreements and in particular
non-full
function joint ventures, cf. point 66 above,
which are confined to a single Member State and
which do not directly relate to imports and exports, are
not by their very nature capable of affecting trade
between Member States. A careful examination of the
capacity of
trade
to affect
the individual agreement
between Member States may therefore be required.

84. Horizontal cooperation agreements may, in particular, be
capable of affecting trade between Member States where
they have foreclosure effects. This may be the case with
agreements that establish sector-wide standardisation and
certification regimes, which either exclude undertakings
from other Member States or which are more easily
fulfilled by undertakings from the Member State in
question due to the fact
they are based on
national rules and traditions. In such circumstances the
agreements make it more difficult for undertakings from
other Member States to penetrate the national market.

that

85. Trade may also be affected where a joint venture results
in undertakings from other Member States being cut off
from an important channel of distribution or source of
demand. If, for example, two or more distributors estab-
lished within the same Member State, and which account
for a substantial share of imports of the products in
venture
question,
combining their purchases of that product, the resulting
reduction in the number of distribution channels limits
the possibilities for suppliers from other Member States
for gaining access to the national market in question.
Trade is therefore capable of being affected (61). Trade

purchasing

establish

joint

a

also be

affected where undertakings, which
may
previously imported a particular product, form a joint
venture which is entrusted with the production of that
same product. In this case the agreement causes a change
in the patterns of trade between Member States compared
to the situation before the agreement.

(iii) Vertical agreements covering a single Member State

86. Vertical agreements covering the whole of a Member
State may, in particular, be capable of affecting patterns
of trade between Member States when they make it more
difficult for undertakings from other Member States to
penetrate the national market
in question either by
means of exports or by means of establishment (fore-
closure effect). When vertical agreements give rise to
they contribute to the parti-
such foreclosure effects,
tioning of markets on a national basis
thereby
interpenetration which the
hindering the
Treaty is designed to bring about (62).

economic

87. Foreclosure may,

the Court of

for example, occur when suppliers
impose exclusive purchasing obligations on buyers (63).
In Delimitis (64), which concerned agreements between a
brewer
and owners of premises where beer was
consumed whereby the latter undertook to buy beer
exclusively from the brewer,
Justice
defined foreclosure as the absence, due to the agreements,
of real and concrete possibilities of gaining access to the
market. Agreements normally only create significant
barriers to entry when they cover a significant proportion
of the market. Market share and market coverage can be
In making the
used as an indicator in this respect.
the
assessment account must be taken not only of
particular
in
agreement or network of agreements
question, but
also of other parallel networks of
agreements having similar effects (65).

88. Vertical agreements which cover the whole of a Member
State and relate to tradable products may also be capable
of affecting trade between Member States, even if they do
not create direct obstacles to trade. Agreements whereby
undertakings engage in resale price maintenance (RPM)
may have direct effects on trade between Member States
by increasing imports from other Member States and by
decreasing
in
question (66). Agreements involving RPM may also affect
patterns of trade in much the same way as horizontal
cartels. To the extent that the price resulting from RPM is
higher than that prevailing in other Member States this
price level
imports from other
is only sustainable if
Member States can be controlled.

from the Member

exports

State

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(iv) Agreements covering only part of a Member State

considered to have an appreciable
between Member States.

effect on trade

89. In qualitative

the

terms

assessment of

agreements
covering only part of a Member State is approached in
the same way as in the case of agreements covering the
whole of a Member State. This means that the analysis in
section II applies.
In the assessment of appreciability,
however, the two categories must be distinguished, as it
must be taken into account that only part of a Member
State is covered by the agreement. It must also be taken
into account what proportion of the national market is
susceptible to trade. If, for example, transport costs or the
operating radius of equipment render it economically
unviable for undertakings from other Member States to
serve the entire territory of another Member State, trade
is capable of being affected if the agreement forecloses
access to the part of the territory that is susceptible to
trade (67).

90. Where an agreement

to total

the best

sales of

share of

concerned

the parties

the size of

the Member

forecloses access to a regional
market, the volume of sales affected must be significant
the
in proportion to the overall volume of sales of
products
in
State
inside
trade to be appreciably affected. This
question for
assessment cannot be based merely on geographic
coverage. The market
to the
agreement must also be given fairly limited weight.
the parties have a high market share in a
Even if
that
properly defined regional market,
in terms of volume may still be insignificant
market
the products
when compared
In
concerned within the Member State in question.
the
indicator of
general,
agreement to (appreciably) affect trade between Member
States is therefore considered to be the share of
the
national market in terms of volume that is being fore-
closed. Coverage of areas with a high concentration of
demand will thus weigh more heavily than agreements
covering areas where demand is less concentrated. For
Community jurisdiction to be established the share of
is being foreclosed must be
the national market that
significant. Agreements that are local
in nature are in
themselves not capable of appreciably affecting trade
between Member States. This is the case even if
the
local market is located in a border region. Conversely,
if
is
the
significant,
trade is capable of being affected even
where the market in question is not located in a border
region.

the national market

foreclosed share of

the capacity of

91. In cases in this category guidance may be derived from
the case law concerning the concept in Article 82 of a
substantial part of the common market (68). Agreements
that,
effect of hindering
competitors from other Member States from gaining
access to part of a Member State, which constitutes a
should be
substantial part of

the common market

example, have

the

for

(v) Abuses of dominant positions covering a single

Member State

92. Where an undertaking holds a dominant position, which
covers the whole of a Member State, and which engages
in exclusionary abuses, trade between Member States is
normally capable of being affected. Such abusive conduct
will generally make it more difficult for competitors from
other Member States to penetrate the market, in which
case patterns of trade are capable of being affected (69). In
Michelin (70), for example, the Court of Justice held that a
system of
loyalty rebates foreclosed competitors from
other Member States and therefore affected trade within
the Court
the meaning of Article 82.
similarly held that an abuse in the form of an exclusive
purchasing obligation on customers foreclosed products
from other Member States.

In Rennet (71)

in a single Member State,

93. Exclusionary abuses that affect the competitive structure
inside a Member State, for instance by eliminating or
threatening to eliminate a competitor, may also be
capable of affecting trade between Member States.
Where the undertaking that risks being eliminated only
operates
the abuse will
normally not affect
trade between Member States.
However,
trade between Member States is capable of
being affected where the targeted undertaking exports
to or imports from other Member States (72) and where
it also operates in other Member States (73). An effect on
trade may arise from the dissuasive impact of the abuse
on other competitors. If through repeated conduct the
dominant undertaking has acquired a reputation of
adopting exclusionary practices
competitors
that attempt to engage in direct competition, competitors
from other Member States are likely to compete less
aggressively, in which case trade may be affected, even
if the victim in the case at hand is not from another
Member State.

towards

Price

affect

vis-à-vis

discrimination

94. In the case of exploitative abuses such as price discrimi-
nation and excessive pricing, the situation may be more
complex.
domestic
trade between
customers will normally not
Member States. However,
it may do so if the buyers
are engaged in export activities and are disadvantaged
by the discriminatory pricing or if this practice is used
to prevent imports (74). Practices consisting in offering
lower prices to customers that are the most likely to
import products from other Member States may make
it more difficult
for competitors from other Member
States to enter the market. In such cases trade between
Member States is capable of being affected.

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access

to broad categories of

the whole of a Member State it

95. As long as an undertaking has a dominant position
which covers
is
normally not material that the specific abuse engaged
in by the dominant undertaking only covers part of its
territory or affects certain buyers within the national
territory. A dominant
firm can significantly impede
trade by implementing an abusive conduct in the areas
or vis-à-vis the customers that are the most likely to be
targeted by competitors from other Member States. For
example, it may be the case that a particular channel of
distribution constitutes a particularly important means of
gaining
consumers.
Hindering access to such channels can have a substantial
impact on trade between Member States.
In the
assessment of appreciability it must also be taken into
account that the very presence of the dominant under-
taking covering the whole of a Member State is likely to
make market penetration more difficult. Any abuse,
to enter the national
which makes it more difficult
market should therefore be considered to appreciably
affect trade. The combination of the market position of
the dominant undertaking and the anti-competitive
such abuses are
nature of
implies
if
normally by their very nature appreciable. However,
the abuse is purely local in nature or involves only an
insignificant share of the sales of the dominant under-
taking within the Member State in question, trade may
not be capable of being appreciably affected.

its conduct

that

(vi) Abuse of dominant positions covering only part of a

Member State

as

in the

96. Where a dominant position covers only part of a
Member State guidance may,
case of
agreements, be derived from the condition in Article
82 that the dominant position must cover a substantial
part of the common market. If the dominant position
covers part of a Member State that constitutes a
substantial part of the common market and the abuse
makes
from other
Member States to gain access to the market where the
undertaking is dominant, trade between Member States
must
being
considered
be
appreciably affected.

it more difficult

for competitors

normally

capable

of

the point of view of providing cross-border services,
trade between Member States is capable of being affected.

C. Agreements and abuses involving imports and
located in third
exports with undertakings
countries
practices
agreements
and
involving undertakings located in third countries

and

(i) General remarks

are

inside

effects

implemented or have

98. Articles 81 and 82 apply to agreements and practices
that are capable of affecting trade between Member
States even if one or more of the parties are located
outside the Community (76). Agreements and practices
that
the
Community are subject to Articles 81 and 82 irrespective
of where the undertakings are located or where the
agreement has been concluded (77). Articles 81 and 82
may also apply to agreements and practices that cover
third countries, provided that
they are capable of
affecting trade between Member States. The general
principle set out in section II above according to which
the agreement or practice must be capable of having an
appreciable
actual or
potential, on the pattern of
trade between Member
States also applies in the case of agreements and abuses
which involve undertakings located in third countries or
which relate to imports or exports with third countries.

influence, direct or

indirect,

is sufficient

99. For the purposes of establishing Community law juris-
that an agreement or practice,
diction it
located in
involving third countries or undertakings
is capable of affecting cross-border
third countries,
Importation
economic activity inside the Community.
into one Member State may be sufficient
to trigger
effects of this nature. Imports can affect the conditions
of competition in the importing Member State, which in
turn can have an impact on exports and imports of
competing products to and from other Member States.
imports from third countries resulting
In other words,
from the agreement or practice may cause a deflection
of trade between Member States, thus affecting patterns
of trade.

97. In the application of this criterion regard must be had in
particular to the size of the market in question in terms
of volume. Regions and even a port or an airport situated
in a Member State may, depending on their importance,
constitute a substantial part of the common market (75).
In the latter cases it must be taken into account whether
the infrastructure in question is used to provide cross-
border services and, if so, to what extent. When infra-
structures such as airports and ports are important from

100. In the application of the effect on trade criterion to the
above mentioned agreements and practices it is relevant
to examine, inter alia, what is the object of the agreement
or practice as indicated by its content or the underlying
intent of the undertakings involved (78).

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101. Where

is

the object of

the agreement

to restrict
competition inside the Community the requisite effect
on trade between Member States is more readily estab-
lished than where the object is predominantly to regulate
Indeed in the
competition outside the Community.
former case the agreement or practice has a direct
impact on competition inside the Community and trade
between Member States. Such agreements and practices,
which may concern both imports and exports, are
normally by their very nature capable of affecting trade
between Member States.

(ii) Arrangements that have as their object the restriction

of competition inside the Community

102. In the case of imports, this category includes agreements
that bring about an isolation of the internal market (79).
This is, for instance, the case of agreements whereby
competitors in the Community and in third countries
in each
share markets, e.g. by agreeing not
other's home markets or by concluding reciprocal
(exclusive) distribution agreements (80).

to sell

103. In the case of exports, this category includes cases where
undertakings that compete in two or more Member
States agree to export certain (surplus) quantities to
third countries with a view to co-ordinating their
inside the Community. Such export
market conduct
competition by
to reduce price
agreements
limiting output inside the Community, thereby affecting
trade between Member States. Without
export
agreement these quantities may have been sold inside
the Community (81).

serve

the

(iii) Other arrangements

104. In the case of agreements and practices whose object is
not to restrict competition inside the Community, it is
normally necessary to proceed with a more detailed
analysis of whether or not
economic
activity inside the Community and thus patterns of
trade between Member States are capable of being
affected.

cross-border

105. In this regard it is relevant to examine the effects of the
agreement or practice on customers and other operators
inside the Community that rely on the products of the
agreement or
undertakings

are party to the

that

affecting

trade
they altered the

between Member
catchment

In Compagnie maritime belge (83), which
practice (82).
concerned agreements between shipping companies
operating between Community ports and West African
the agreements were held to be capable of
ports,
States
indirectly
the
because
Community ports
and
covered by the
because they affected the activities of other undertakings
inside those areas. More specifically,
the agreements
affected the activities of undertakings that relied on the
parties for transportation services either as a means of
transporting goods purchased in third countries or sold
there or as an important input into the services that the
ports themselves offered.

areas of
agreements

106. Trade may also be capable of being affected when the
agreement prevents re-imports into the Community. This
for example, be the case of vertical agreements
may,
country
between Community
imposing restrictions on resale outside an
distributors,
including the Community. If in the
allocated territory,
absence of
resale to the Community
would be possible and likely, such imports may be
the
capable of
Community (84).

affecting patterns of

the agreement,

suppliers

inside

trade

third

and

107. However, for such effects to be likely, there must be an
appreciable difference between the prices of the products
charged in the Community and those charged outside the
Community, and this price difference must not be eroded
by customs duties and transport costs. In addition, the
product volumes exported compared to the total market
for those products in the territory of the common market
must not be insignificant (85). If these product volumes
are small compared to those sold inside the Community,
the impact of any re-importation on trade between
Member States is considered not to be appreciable. In
making this assessment, regard must be had not only
to the individual agreement concluded between the
parties, but also to any cumulative effect of similar
agreements concluded by the same and competing
the product
suppliers.
volumes covered by a single agreement are quite small,
but that the product volumes covered by several such
agreements are significant. In that case the agreements
taken as a whole may be capable of appreciably
affecting trade between Member States.

for example,

It may be,

that

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Official Journal of the European Union

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___________
(1) The terms ‘agreements’, ‘concerted practices’ and ‘decisions of associations of undertakings’ are autonomous concepts of Community law. In the

present notice the term ‘agreement’ encompasses all three concepts.

(2) OJ C 368, 22.12.2001, p. 13.
(3) OJ L 1, 4.1.2003, p. 1.
(4) See e.g. Joined Cases 56/64 and 58/64, Consten and Grundig, [1966] ECR p. 429, and Joined Cases 6/73 and 7/73, Commercial Solvents, [1974]

ECR p. 223.

(5) See in this respect Case 22/71, Béguelin, [1971] ECR p. 949, paragraph 16.
(6) See Case 193/83, Windsurfing, [1986] ECR p. 611, paragraph 96, and Case T-77/94, Vereniging van Groothandelaren in Bloemkwerkerij-

produkten, [1997] ECR II-759, paragraph 126.

(7) See e.g. Case T-2/89, Petrofina, [1991] ECR II-1087, paragraph 226.
(8) See in this respect Case 85/76, Hoffmann-La Roche, [1979] ECR p. 461, paragraph 126.
(9) Throughout these guidelines the term ‘products’ covers both goods and services.
(10) See Case 172/80, Züchner, [1981] ECR p. 2021, paragraph 18.
(11) See e.g. Case C-309/99, Wouters, [2002] ECR I-1577, paragraph 95, Case C-475/99, Ambulanz Glöckner, [2001] ECR I-8089, paragraph 49,
Joined Cases C-215/96 and 216/96, Bagnasco, [1999] ECR I-135, paragraph 51, Case C-55/96, Job Centre, [1997] ECR I-7119, paragraph 37,
and Case C-41/90, Höfner and Elser, [1991] ECR I-1979, paragraph 33.

(12) See e.g. Joined Cases T-24/93 and others, Compagnie maritime belge, [1996] ECR II-1201, paragraph 203, and paragraph 23 of the judgment in

Commercial Solvents cited in note 4.

(13) See e.g. Joined Cases T-213/95 and T-18/96, SCK and FNK, [1997] ECR II-1739, and sections IV.B.iv. and B.vi. below.
(14) See section III.B. below.
(15) See e.g. the judgment in, in Züchner cited in note 10 and Case 319/82, Kerpen & Kerpen, [1983] ECR 4173, Joined Cases 240/82 and others,
Stichting Sigarettenindustrie, [1985] ECR p. 3831, paragraph 48, and Joined Cases T-25/95 and others, Cimenteries CBR, [2000] ECR II-491,
paragraph 3930.

(16) In some judgments mainly relating to vertical agreements the Court of Justice has added wording to the effect that the agreement was capable of
hindering the attainment of the objectives of a single market between Member States, see e.g. Case T-62/98, Volkswagen, [2000] ECR II-2707,
paragraph 179, and paragraph 47 of the Bagnasco judgment cited in note 11, and Case 56/65, Société Technique Minière, [1966] ECR 337. The
impact of the agreement on the single market objective is thus a factor which can be taken into account.

(17) See e.g. Case T-228/97, Irish Sugar, [1999] ECR II-2969, paragraph 170, and Case 17/77, Miller, [1978] ECR 131, paragraph 15.
(18) See e.g. Case C-250/92, Gøttrup-Klim. [1994] ECR II-5641, paragraph 54.
(19) See e.g. Case C-306/96, Javico, [1998] ECR I-1983, paragraph 17, and paragraph 18 of the judgment in Béguelin cited in note 5.
(20) See in this respect the judgment in Bagnasco cited in note 11.
(21) See e.g. Case T-141/89, Tréfileurope, [1995] ECR II-791, Case T-29/92, Vereniging van Samenwerkende Prijsregelende Organisaties in de
Bouwnijverheid (SPO), [1995] ECR II-289, as far as exports were concerned, and Commission Decision in Volkswagen (II) (OJ L 262, 2.10.2001,
p. 14).

(22) See in this respect Case 71/74, Frubo, [1975] ECR 563, paragraph 38, Joined Cases 209/78 and others, Van Landewyck, [1980] ECR 3125,
paragraph 172, Case T-61/89, Dansk Pelsdyravler Forening, [1992] ECR II-1931, paragraph 143, and Case T-65/89, BPB Industries and British
Gypsum, [1993] ECR II-389, paragraph 135.

(23) See in this respect Case T-86/95, Compagnie Générale Maritime and others, [2002] ECR II-1011, paragraph 148, and paragraph 202 of the

judgment in Compagnie Maritime Belge cited in note 12.

(24) See Case 123/83, BNIC v Clair, [1985] ECR 391, paragraph 29.
(25) See Commission Decision in Zanussi (OJ L 322, 16.11.1978, p. 36, paragraph 11).
(26) See in this respect Case 31/85, ETA Frabrique d'Ebauches, [1985] ECR 3933, paragraphs 12 and 13.
(27) See Joined Cases C-241/91 P and C-242/91 P, RTE (Magill), [1995] ECR I-743, paragraph 70, and Case 107/82, AEG, [1983] ECR 3151,

paragraph 60.

(28) See paragraph 60 of the AEG judgment cited in the previous note.
(29) See Case 5/69, Völk, [1969] ECR 295, paragraph 7.
(30) See e.g. paragraph 17 of the judgment in Javico cited in note 19, and paragraph 138 of the judgment in BPB Industries and British Gypsum cited

in note 22.

(31) See e.g. paragraphs 9 and 10 of the Miller judgment cited in note 17, and paragraph 58 of the AEG judgment cited in note 27.
(32) See Joined Cases 100/80 and others, Musique Diffusion Française, [1983] ECR p. 1825, paragraph 86. In this case the products in question
accounted for just above 3 % of sales on the national markets concerned. The Court held that the agreements, which hindered parallel trade, were
capable of appreciably affecting trade between Member States due to the high turnover of the parties and the relative market position of the
products compared to those of products produced by competing suppliers.

(33) See in this respect paragraphs 179 and 231 of the Volkswagen judgment cited in note 16, and Case T-213/00, CMA CGM and others, [2003]

ECR I, paragraphs 219 and 220.

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(34) See e.g. Case T-7/93, Langnese-Iglo, [1995] ECR II-1533, paragraph 120.

(35) See paragraph 138 of the judgment in BPB Industries and British Gypsum cited in note 22.

(36) See Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty (OJ

C 368, 22.12.2001, p. 13, point 3).

(37) OJ L 107, 30.4.1996, p. 4. With effect from 1.1.2005 this recommendation will be replaced by Commission Recommendation concerning the

definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).

(38) The term ‘undertakings concerned’ shall include connected undertakings as defined in point 12.2 of the Commission's Notice on agreements of
minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community (OJ C
368, 22.12.2001, p. 13).

(39) See the previous note.

(40) When defining the relevant market, reference should be had to the notice on the definition of the relevant market for the purposes of Community

competition law, see OJ C 372, 9.12.1997, p. 5.

(41) See paragraph 8 of the judgment in Kerpen & Kerpen cited in note 15. It should be noted that the Court does not refer to market share but to the

share of French exports and to the product volumes involved.

(42) See e.g. the judgment in Volkswagen cited in note 16 and Case T-175/95, BASF Coatings, [1999] ECR II-1581. For a horizontal agreement to

prevent parallel trade see Joined Cases 96/82 and others, IAZ International, [1983] ECR 3369, paragraph 27.

(43) See e.g. Case T-142/89, Usines Gustave Boël, [1995] ECR II-867, paragraph 102.

(44) Horizontal cooperation agreements are dealt with in the Commission Guidelines on the applicability of Article 81 of the EC Treaty to horizontal
cooperation agreements (OJ C 3, 6.1.2001, p. 2). These guidelines deal with the substantive competition assessment of various types of
agreements but do not deal with the effect on trade issue.

(45) See Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (OJ L 257, 21.9.1990, p. 13).

(46) Commission Notice on the concept of full-function joint ventures under the Merger Regulation (OJ C 66, 2.3.1998, p. 1) gives guidance on the

scope of this concept.

(47) See e.g. the Commission Decision in Ford/Volkswagen (OJ L 20, 28.1.1993, p. 14).

(48) See in this respect paragraph 146 of the Compagnie Générale Maritime judgment cited in note 23 above.

(49) See in this respect Joined Cases 43/82 and 63/82, VBVB and VBBB, [1984] ECR 19, paragraph 9.

(50) See in this respect Case T-66/89, Publishers Association, [1992] ECR II-1995.

(51) See in this respect the judgment in Commercial Solvents cited in note 4, in the judgment in Hoffmann-La Roche, cited in note 2, paragraph 125,
and in RTE and ITP cited in note 2, as well as Case 6/72, Continental Can, [1973] ECR 215, paragraph 16, and Case 27/76, United Brands,
[1978] ECR 207, paragraphs 197 to 203.

(52) See paragraphs 32 and 33 of the judgment in Commercial Solvents cited in note 4.

(53) According to settled case law dominance is a position of economic strength enjoyed by an undertaking which enables it to prevent effective
competition being maintained on the relevant market by affording it the power to act to an appreciable extent independently of its competitors,
its customers and ultimately of the consumers, see e.g. paragraph 38 of the judgment in Hoffmann-La Roche cited in note 8.

(54) See for a recent example paragraph 95 of the Wouters judgment cited in note 11.

(55) See e.g. Case 246/86, Belasco, [1989] ECR 2117, paragraph 32-38.

(56) See paragraph 34 of the Belasco judgment cited in the previous note and more recently Joined Cases T-202/98 a.o., British Sugar, [2001] ECR
II-2035, paragraph 79. On the other hand this is not so when the market is not susceptible to imports, see paragraph 51 of the Bagnasco
judgment cited in note 11.

(57) Guarantees for current account credit facilities.

(58) See the Bagnasco judgment cited in note 11.

(59) See in this respect Case 45/85, Verband der Sachversicherer, [1987] ECR 405, paragraph 50, and Case C-7/95 P, John Deere, [1998] ECR I-3111.
See also paragraph 172 of the judgment in Van Landewyck cited in note 22, where the Court stressed that the agreement in question reduced
appreciably the incentive to sell imported products.

(60) See e.g. the judgment in Stichting Sigarettenindustrie, cited in note 15, paragraphs 49 and 50.

(61) See in this respect Case T-22/97, Kesko, [1999] ECR II-3775, paragraph 109.

(62) See e.g. judgment in Langnese-Iglo, cited in note 34 paragraph 120.

(63) See e.g. judgment of 7.12.2000, Case C-214/99, Neste, ECR I-11121.

(64) See judgment of 28.2.1991, Case C-234/89, Delimitis, ECR I-935.

(65) See the Langnese-Iglo judgment cited in note 34.

(66) See e.g. Commission Decision in Volkswagen (II), cited in note 21, paragraphs 81 et seq.

(67) See in this respect paragraphs 177 to 181 of the judgment in SCK and FNK cited in note 13.

(68) See as to this notion the judgment in Ambulanz Glöckner, cited in note 11, paragraph 38, and Case C-179/90, Merci convenzionali porto di

Genova, [1991] ECR I-5889, and Case C-242/95, GT-Link, [1997] ECR I-4449.

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(69) See e.g. the judgment in BPB Industries and British Gypsum cited in note 22.

(70) See Case 322/81, Nederlandse Banden Industrie Michelin, [1983] ECR 3461.

(71) See Case 61/80, Coöperative Stremsel- en Kleurselfabriek, [1981] ECR 851, paragraph 15.

(72) See in this respect judgment in Irish Sugar, cited in note 17 paragraph 169.

(73) See paragraph 70 of the judgment in RTE (Magill) cited in note 27.

(74) See the judgment in Irish Sugar cited in note 17.

(75) See e.g. the case law cited in note 68.

(76) See in this respect Case 28/77, Tepea, [1978] ECR 1391, paragraph 48, and paragraph 16 of the judgment in Continental Can cited in note 51.

(77) See Joined Cases C-89/85 and others, Ahlström Osakeyhtiö (Woodpulp), [1988] ECR 651, paragraph 16.

(78) See to that effect paragraph 19 of the judgment in Javico cited in note 19.

(79) See in this respect Case 51/75, EMI v CBS, [1976] ECR 811, paragraphs 28 and 29.

(80) See Commission Decision in Siemens/Fanuc (OJ L 376, 31.12.1985, p. 29).

(81) See in this respect Joined Cases 29/83 and 30/83, CRAM and Rheinzinc, [1984] ECR 1679, and Joined Cases 40/73 and others, Suiker Unie,

[1975] ECR 1663, paragraphs 564 and 580.

(82) See paragraph 22 of the judgment in Javico cited in note 19.

(83) See the judgment in Compagnie maritime belge cited in note 12.

(84) See in this respect the judgment in Javico cited in the note 19.

(85) See in this respect paragraphs 24 to 26 of the Javico judgment cited in note 19.

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Draft Notice — Communication from the Commission

Guidelines on the application of Article 81(3) of the Treaty

I. INTRODUCTION

1. Article 81(3) of the Treaty sets out an exception rule,
which provides a defence to undertakings against a
finding of an infringement of Article 81(1) of
the
Treaty. Agreements, decisions of associations of under-
takings and concerted practices caught by Article 81(1)
which satisfy the conditions of Article 81(3) are valid and
enforceable, no prior decision to that effect being
required.

5. The standards set forth in the present guidelines must be
applied in light of the circumstances specific to each case.
This excludes a mechanical application. Each case must
be assessed on its own facts and the guidelines must be
applied reasonably and flexibly.

6. The present guidelines are without prejudice to the inter-
pretation of Article 81(3) that may be given by the Court
of Justice and the Court of First Instance.

2. Article 81(3) can be applied in individual cases or to
categories of agreements and concerted practices by
way of block exemption regulation. Regulation (EC) No
1/2003 on the implementation of the competition rules
laid down in Articles 81 and 82 (1) does not affect the
validity and legal nature of block exemption regulations.
All existing block exemption regulations remain in force
and agreements covered by block exemption regulations
are legally valid and enforceable even if
they are
restrictive of competition within the meaning of Article
81(1) (2). Such agreements can only be prohibited for the
future and only upon formal withdrawal of the block
exemption by the Commission or a national competition
authority (3). Block exempted agreements cannot be held
invalid by national courts in the context of private liti-
gation.

II. THE GENERAL FRAMEWORK OF ARTICLE 81 EC

A. The Treaty provisions

7. Article 81(1) prohibits all agreements between under-
takings, decisions by associations of undertakings and
concerted practices (5) which may affect trade between
Member States (6) and which have as their object or
effect
restriction or distortion of
competition (7).

the prevention,

cooperation

agreements (4)

3. The existing guidelines on vertical restraints and on hori-
zontal
the
application of Article 81 to various types of agreements
and concerted practices. The purpose of those guidelines
is to set out the Commission's view of the substantive
assessment criteria applied to the various
types of
agreements and practices.

deal with

4. The present guidelines establish an analytical framework
for the application of Article 81(3), the purpose of which
is to develop a methodology for the application of this
Treaty provision. This framework provides more detailed
guidance on the application of the four conditions of
Article 81(3) than that contained in the guidelines on
vertical
co-operation
restraints
agreements. The framework of
the present guidelines
also applies to agreements covered by those guidelines.

horizontal

and

8. As an exception to this rule Article 81(3) provides that
the prohibition contained in Article 81(1) may be
declared inapplicable
in case of agreements which
contribute to improving the production or distribution
of goods or
economic
progress, while allowing consumers a fair share of the
resulting benefits, and which do not impose restrictions
which are not indispensable to the attainment of these
objectives, and do not afford such undertakings the possi-
bility of
a
substantial part of the products concerned.

eliminating competition in respect of

to promoting technical or

9. According to Article 1(1) of Regulation (EC) No 1/2003
agreements which are caught by Article 81(1) and which
satisfy the conditions of Article 81(3) are
do not
prohibited, no prior decision to that
effect being
required (8). According to Article 1(2) of the same Regu-
lation agreements which are caught by Article 81(1) but
which satisfy the conditions of Article 81(3) are not
prohibited, no prior decision to that
effect being
required. Such agreements are valid and enforceable
from the moment that the conditions of Article 81(3)
are satisfied and for as long as that remains the case.

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10. The assessment under Article 81 thus consists of two
parts. The first step is to assess whether an agreement
between undertakings, which is capable of affecting trade
between Member States, has an anti-competitive object or
likely anti-competitive effects. The second step, which
only becomes relevant when an agreement is found to
be
the
pro-competitive benefits produced by that agreement
and to assess whether
these pro-competitive effects
outweigh the anti-competitive effects. The balancing of
anti-competitive and pro-competitive effects is conducted
exclusively within the framework laid down by Article
81(3) (9).

to determine

restrictive of

competition,

is

11. The assessment of any countervailing benefits under
Article 81(3) necessarily requires prior determination of
the restrictive nature and impact of the agreement. To
place Article 81(3) in its proper context it is appropriate
to briefly outline the objective and principal content of
the prohibition rule of Article 81(1).

B. The prohibition rule of Article 81(1)

1. General remarks

12. The objective of Article 81(1) is to protect competition
on the market as a means of enhancing consumer welfare
resources.
and of ensuring an efficient allocation of
Competition and market
integration serve these ends
since the creation and preservation of an open single
market promotes an efficient allocation of
resources
throughout the Community for the benefit of consumers.

13. The prohibition rule of Article 81(1) applies to restrictive
agreements and concerted practices between undertakings
and decisions by associations of undertakings in so far as
they are capable of affecting trade between Member
States. A general principle underlying Article 81(1)
which is expressed in the case law of the Community
Courts is that each economic operator must determine
independently the policy, which he intends to adopt on
the market (10). In view of this the Community Courts
have defined ‘agreements’, ‘decisions’ and ‘concerted prac-
tices’ as Community law concepts which allow to make a
distinction between unilateral conduct of an undertaking
and co-ordination of behaviour or collusion between
subject only to
undertakings. Unilateral conduct
Article 82 of the Treaty as far as Community competition
law is concerned. Moreover, the convergence rule set out
in Article 3(2) of Regulation (EC) No 1/2003 does not
apply to unilateral conduct. This provision applies only
to agreements, decisions and concerted practices, which

is

are capable of affecting trade between Member States.
Article 3(2) provides
that when such agreements,
decisions and concerted practices are not prohibited by
Article 81,
they cannot be prohibited by national
competition law. Article 3 is without prejudice to the
fundamental principle of primacy of Community law,
which entails in particular that agreements and abusive
practices that are prohibited by Articles 81 and 82
cannot be upheld by national law (11).

is

or

not

restrictive

eliminated or

14. For co-ordination of behaviour or collusion between
undertakings within the meaning of Article 81(1) to be
established — whether
of
competition (12) — it is sufficient that at least one under-
taking vis-à-vis another undertaking undertakes to adopt
a certain conduct on the market or that as a result of
contacts between them uncertainty as to their conduct on
the market
substantially
reduced (13). It follows that co-ordination can take the
form of obligations that regulate the market conduct of
at least one of the parties as well as of arrangements that
influence the market conduct of at
the
parties by changing its incentives.
is not required
that co-ordination is in the interest of all the under-
concerned (14). Co-ordination must also not
takings
necessarily be express.
It can for instance be inferred
from an ongoing commercial relationship between the
parties (15).

least one of

least

at

It

15. Co-ordination of market behaviour is caught by the
prohibition rule of Article 81(1) when it
is likely to
have an adverse impact on the parameters of competition
on the market, i.e. price, output, product quality, product
variety and innovation. Co-ordination can have this effect
by appreciably reducing rivalry between the parties to the
agreement or between them and third parties.

16. Article 81(1) distinguishes between those agreements that
have a restriction of competition as their object and those
agreements that have a restriction of competition as their
effect. This distinction is important. Once it has been
established that an agreement has as its object
the
there is no need to take
restriction of competition,
account of its concrete effects (16). In other words, for
the purpose of applying Article 81(1) no actual anti-
competitive effects need to be demonstrated where the
agreement has a restriction of competition as its object.
Article 81(3), on the other hand, does not distinguish
between agreements that restrict competition by object
and agreements that restrict competition by effect. Article
81(3) applies to all agreements
the four
conditions contained therein (17).

fulfil

that

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2. Restrictions of competition by object and by effect

the potential of

17. Restrictions of competition by object are those that by
their very nature have
restricting
competition. These are restrictions which in light of the
objectives pursued by the Community competition rules
are presumed to have negative effects on competition and
in respect of which it is therefore unnecessary for the
purposes of applying Article 81(1) to demonstrate any
actual effects on the market. This presumption is based
on the serious nature of the restriction and on experience
showing that restrictions of competition by object are
likely to produce negative effects on the market and to
jeopardise the objectives pursued by the Community
competition rules. Restrictions by object such as price
fixing and market
sharing reduce output and raise
prices,
leading to a misallocation of resources, because
goods and services demanded by customers are not
produced. They also lead to a reduction in consumer
welfare, because consumers have to pay higher prices
for the goods and services in question.

18. The assessment of whether or not an agreement has as its
the restriction of competition is based on a
object
in particular,
number of factors. These factors include,
the content of the agreement and the objective aims
pursued by it. It may also be necessary to consider the
context in which it is (to be) applied and the actual
conduct and behaviour of the parties on the market (18).
The way in which an agreement is actually implemented
may reveal a restriction by object even where the formal
agreement does not contain an express provision to that
effect. Evidence of subjective intent on the part of the
parties to restrict competition is a relevant factor but not
a necessary condition.

in guidelines

19. Non-exhaustive guidance on what constitutes restrictions
by object can be found in Commission block exemption
regulations, guidelines and notices. Restrictions that are
black listed in block exemptions or identified as hardcore
restrictions
and notices are generally
considered by the Commission to constitute restrictions
agreements
by object.
restrictions of competition by object
include price
limitation and sharing of markets and
fixing, output
customers (19). As
the
category of restrictions by object includes, in particular,
fixed and minimum resale price maintenance
and
territorial protection,
restrictions providing absolute
including restrictions on passive sales (20).

case of horizontal

agreements

In the

regards

vertical

20. If an agreement is not restrictive of competition by object
it must be examined whether it has or is likely to have
restrictive effects on competition. Account must be taken
of both actual and potential effects (21). In the case of

of

For

there

effect

effects.

competition by

is no
restrictions of
presumption
an
anti-competitive
agreement to be restrictive by effect it must be capable
of affecting competition to such an extent that on the
relevant market negative effects on prices, output, inno-
vation or the variety or quality of goods and services can
be expected with a reasonable degree of probability. Such
negative effects must be appreciable. The prohibition rule
of Article 81(1) does not apply when the anti-competitive
effects are insignificant (22).

least one of

21. Negative effects on competition within the relevant
market are likely to occur when at
the
parties has or obtains some degree of market power
and the agreement contributes to the creation, main-
tenance or
that market power or
allows the parties to exploit such market power. Market
power is the ability to maintain prices above competitive
levels for a significant period of time or output in terms
of product quantities, product quality and variety or
innovation below competitive levels for a significant
period of time.

strengthening of

22. The creation, maintenance or strengthening of market
from a restriction of competition
power can result
between the parties to the agreement. It can also result
from a restriction of competition between any one of the
parties and third parties, e.g. because the agreement leads
to foreclosure of competitors or because
raises
limiting their capacity to compete
competitors' costs,
effectively with the contracting parties. Market power is
a question of degree. The degree of market power
normally required for the finding of an infringement
under Article 81(1) in the case of agreements that are
restrictive of competition by effect is less than the degree
of market power required for a finding of dominance
under Article 82.

it

23. For the purposes of analysing the restrictive effects of an
agreement it is normally necessary to define the relevant
market (23). It is normally also necessary to examine and
assess, inter alia, the nature of the products, the market
the market position of
the parties,
position of
competitors,
the
the market position of
existence of potential competitors and the level of entry
barriers. In some cases, however, it may be possible to
show anti-competitive effects directly by analysing the
conduct of the parties to the agreement on the market.
It may for example be possible to ascertain that an
agreement has led to price increases. The Guidelines on
horizontal
and on vertical
restraints set out a detailed framework for analysing the
competitive impact of various types of horizontal and
vertical agreements under Article 81(1) (24).

cooperation agreements

buyers,

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of

on

the

impact

agreement

24. The assessment of whether an agreement is restrictive of
competition must be made within the actual context in
which competition would occur in the absence of the
agreement with its alleged restrictions (25).
In making
this assessment it is necessary to take account of the
likely
inter-brand
competition (i.e.
competition between suppliers of
competing brands) and on intra-brand competition (i.e.
competition between distributors of
the same brand).
Article 81(1) prohibits restrictions of both inter-brand
competition and intra-brand competition (26).
In order
to ascertain whether an agreement or
its individual
parts are restrictive of competition within the meaning
of Article 81(1) it is relevant to ask the two questions set
out below. The first question relates to the impact of the
agreement on inter-brand competition while the second
question relates to the impact of
the agreement on
intra-brand competition. As restraints may be capable
of affecting both inter-brand competition and intra-brand
competition at the same time,
it may be necessary to
analyse a restraint in light of both questions before it
can be concluded whether or not
is restrictive of
competition within the meaning of Article 81(1):

it

(1) Does

the agreement

restrict actual or potential
competition that would have existed in the absence
of the agreement? If so, the agreement is normally
caught by Article 81(1) provided that trade between
Member States
is capable of being appreciably
affected. For instance, where two undertakings estab-
lished in different Member States undertake not to
in each other's home markets,
sell products
(potential) competition that existed prior
to the
agreement is restricted. Similarly, where a supplier
imposes on his distributors not to sell competing
products and these obligations foreclose third party
access to the market, actual or potential competition
that would have existed in the absence of
the
agreement is restricted.

(2) Does

the agreement

restrict actual or potential
competition that would have existed in the absence
of
the alleged restriction(s) of competition? This
question relates to the issue of whether or not the
restriction is objectively necessary for the conclusion
the agreement with its
of
restraints
is not caught by Article 81(1). This
assessment is made on the basis of objective factors
external
the
subjective views and characteristics of
the parties.
The question is not whether the parties in their

themselves and not

to the parties

the ageement.

so,

If

have

accepted

situation would

to
particular
conclude a less restrictive agreement, but whether
given the nature of the agreement and the charac-
teristics of the market a less restrictive agreement
would have been concluded by undertakings in a
similar setting. For instance, territorial restraints in
an agreement between a supplier and a distributor
may fall outside Article 81(1),
if the restraints are
objectively necessary in order for the distributor to
penetrate a new market (27). Claims
in the
absence of a restriction the supplier would have
resorted to vertical
integration are not sufficient.
Decisions on whether or not to vertically integrate
depend on a broad range of complex economic
factors, a number of which are internal to the under-
taking concerned. The initial choice to rely on
co-operation rather than vertical integration anyhow
already generally indicates that vertical
integration
was not practicable.

that

3. Ancillary restraints

If an agreement

a main non-restrictive

25. In Community competition law the concept of ancillary
restraints covers any alleged restriction of competition
which is directly related and necessary to the implemen-
transaction and
tation of
proportionate to it (28).
in its main
parts, for instance a distribution agreement or a joint
the
venture, does not have as
restriction of competition, then restrictions, which are
directly related to and necessary for the implementation
transaction, also fall outside Article 81(1) (29).
of that
These related restrictions are called ancillary restraints.
A restriction is directly related to the main transaction
if it is subordinate to the implementation of that trans-
action and is inseparably linked to it. The test of necessity
implies that the restriction must be objectively necessary
for the implementation of the main transaction and be
proportionate to it.

its object or effect

26. The application of the ancillary restraint concept must be
distinguished from the application of the defence under
Article 81(3) which relates to certain economic benefits
and which are
produced by restrictive
balanced against the restrictive effects of the agreements.
The application of the ancillary restraint concept does
not involve any weighing of pro-competitive and anti-
competitive
reserved for
effects. Such balancing is
Article 81(3) (30).

agreements

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activity,

transaction or

in the specific context of

27. The assessment of ancillary restraints is limited to deter-
the main
mining whether,
non-restrictive
a particular
restriction is necessary for the implementation of that
transaction or activity and proportionate to it. If on the
basis of objective factors it can be concluded that without
the restriction the main non-restrictive transaction would
be difficult or impossible to implement, the restriction
its
may be
for
implementation and proportionate
example, the main object of a franchise agreement does
not restrict competition,
then restrictions, which are
necessary for the proper functioning of the agreement,
such as obligations aimed at protecting the uniformity
and reputation of the franchise system, also fall outside
Article 81(1) (32).

regarded as objectively necessary for
If,

to it (31).

(b) Consumers must receive a fair share of the resulting

benefits,

(c) The

restrictions must be

indispensable

to the

attainment of these objectives, and finally

(d) The agreement must not afford the parties the possi-
bility of eliminating competition in respect of a
substantial part of the products in question.

4. The exception rule of Article 81(3)

28. The assessment of restrictions by object and effect under
Article 81(1) is only one side of the analysis. The other
side, which is reflected in Article 81(3), is the assessment
of the positive economic effects of restrictive agreements.

competition within the

When these four conditions are fulfilled the agreement
enhances
relevant market,
because it leads the undertakings concerned to improve
their competitiveness on the market by offering cheaper
or better products to consumers, compensating the latter
for the adverse effects of the restrictions of competition.

29. The aim of

and of

ensuring

consumer welfare

improving the quality of

the Community competition rules is to
protect competition on the market as a means of
enhancing
an
efficient allocation of resources. Agreements that restrict
competition may at the same time have pro-competitive
effects by way of efficiency gains. Efficiencies may create
additional value by lowering the cost of producing an
output,
the product or
creating a new product. When the pro-competitive
effects of an agreement outweigh its anti-competitive
effects the agreement is on balance pro-competitive and
the Community
compatible with the objectives of
competition rules. The net effect of such agreements is
to promote the very essence of the competitive process,
namely to win customers by offering better products or
better prices than those offered by rivals. This analytical
framework is reflected in Article 81(1) and Article 81(3).
The
that
restrictive agreements may generate objective economic
benefits so as to outweigh the negative effects of the
restriction of competition (33).

acknowledges

provision

expressly

latter

30. The application of the exception rule of Article 81(3) is
subject to four cumulative conditions, two positive and
two negative:

(a) The agreement must contribute to improving the
production or distribution of goods or contribute to
promoting technical or economic progress,

31. Article 81(3)

can be

applied either

to individual
agreements or to categories of agreements by way of a
block exemption regulation. When an agreement
is
covered by a block exemption the parties
to the
restrictive agreement are relieved of their burden under
Article 2 of Regulation (EC) No 1/2003 of showing that
their individual agreement satisfies each of the conditions
of Article 81(3). They only have to prove that
the
restrictive agreement is block exempted. The application
of Article 81(3) to categories of agreements by way of
block exemption regulation is based on the presumption
that restrictive agreements falling within their scope fulfil
each of the four conditions laid down in Article 81(3).

case

an agreement

32. If in an individual case the conditions of Article 81(3) are
not fulfilled the block exemption may be withdrawn.
According to Article 29(1) of Regulation (EC) No
1/2003 the Commission is empowered to withdraw the
benefit of a block exemption when it finds that in a
particular
covered by a block
exemption regulation has certain effects which are
incompatible with Article 81(3) of the Treaty. Pursuant
to Article 29(2) of Regulation (EC) No 1/2003 a
competition authority of a Member State may also
withdraw the benefit of a Commission block exemption
its
regulation in respect of
territory), if this territory has all the characteristics of a
distinct geographic market. In the case of withdrawal it is
for the competition authorities concerned to demonstrate
that the agreement infringes Article 81(1) and that it does
not fulfil the conditions of Article 81(3).

its territory (or part of

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33. The courts of

the Member States have no power to
withdraw the benefit of block exemption regulations.
Moreover, in their application of block exemption regu-
lations Member State courts may not modify their scope
by extending their sphere of application to agreements
not covered by the block exemption regulation in
question (34). The powers of Member State courts are
limited to finding whether or not an agreement
is
covered by a block exemption regulation.

Article 81(3) can be invoked as a defence. According to
Article 2 of Regulation (EC) No 1/2003 the burden of
proof under Article 81(3) rests on the undertaking(s)
invoking the benefit of the exception rule.

III. THE APPLICATION OF THE FOUR CONDITIONS OF

ARTICLE 81(3)

34. The remainder of these guidelines will consider each of
the four conditions of Article 81(3) (35). Given that these
four conditions are cumulative (36) it is unnecessary to
examine any remaining conditions once it is found that
one of the conditions of Article 81(3) is not fulfilled. In
individual cases
it may therefore be appropriate to
consider the four conditions in a different order.

35. For the purposes of

these guidelines it

is considered
appropriate to invert the order of the second and the
third condition and thus deal with the issue of indispen-
sability before the issue of pass-on to consumers. The
analysis of pass-on requires a balancing of the negative
and positive effects on consumers. This analysis should
not include the effects of any restrictions, which already
fail the indispensability test and which for that reason are
prohibited by Article 81.

A. General principles

36. Article 81(3) of the Treaty only becomes relevant when
an agreement between undertakings restricts competition
within the meaning of Article 81(1).
In the case of
non-restrictive agreements there is no need to examine
any benefits generated by the agreement.

37. Where in an individual case a restriction of competition
within the meaning of Article 81(1) has been proven,

38. According to settled case law the four conditions of
Article 81(3) are cumulative (37),
i.e. they must all be
fulfilled for the exception rule to be applicable. If they
are not, the application of the exception rule of Article
81(3) must be refused (38). The four conditions of Article
the
81(3) are also exhaustive. When they are met
exception is
be made
dependant on any other condition. Goals pursued by
other Treaty provisions can be taken into account to
the extent that they can be subsumed under the four
conditions of Article 81(3).
is not, on the other
hand,
role of Article 81 and the authorities
enforcing this Treaty provision to allow undertakings to
interest
competition in pursuit of general
restrict
aims (39).

and may not

applicable

the

It

39. The assessment under Article 81(3) of benefits flowing
from restrictive agreements is in principle made within
the confines of each relevant market
to which the
agreement
relates. The Community competition rules
have as their objective the protection of competition
on the market and cannot be detached from this
objective. Moreover, it is inherent in the condition that
consumers (40) must receive a fair share of the benefits
that efficiencies generated by the restrictive agreement
within a relevant market must be sufficient to outweigh
the anti-competitive effects produced by the agreement
within that same relevant market (41). Negative effects on
consumers in one geographic market or product market
cannot normally be balanced against and compensated by
positive effects
in another unrelated
geographic market or product market. However, where
two markets are closely interrelated, efficiencies achieved
on separate markets can be taken into account provided
that the group of consumers affected by the restriction
and benefiting from the efficiency gains are substantially
the same (42). Indeed, in some cases only consumers in a
downstream market are affected by the agreement
in
which case the impact of
the agreement on such
consumers must be assessed. This is for instance so in
the case of purchasing agreements (43).

for consumers

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the

In some

cases, however,

in time. The assessment

40. The assessment of restrictive agreements under Article
81(3) is made within the actual context in which they
occur (44) and on the basis of the facts existing at any
given point
is sensitive to
material changes in the facts. The exception rule of
Article 81(3) applies as long as the four conditions are
fulfilled and ceases to apply when that is no longer the
case (45).
restrictive
agreement is an irreversible event. Once the restrictive
agreement has been implemented the ex ante situation
cannot be re-established.
In such cases the assessment
must be made on the basis of the facts pertaining at
the time of implementation. For instance, in the case of
a research and development agreement whereby each
party agrees to abandon its respective research project
and pool its capabilities with those of another party, it
may from an objective point of view be technically and
economically impossible to revive a project once it has
been abandoned. The assessment of the anti-competitive
and pro-competitive effects of the agreement to abandon
the individual research projects must therefore be made
as of the time of the completion of its implementation. If
at that point in time the agreement is compatible with
Article 81, for instance because a sufficient number of
third parties have competing research and development
projects, the parties' agreement to abandon their indi-
vidual projects
remains compatible with Article 81,
even if at a later point in time the third party projects
fail. However, the prohibition of Article 81 may apply to
other parts of the agreement in respect of which the issue
of irreversibility does not arise. If for example in addition
to joint
agreement
provides for joint exploitation, Article 81 may apply to
this part of the agreement if due to subsequent market
developments
restrictive of
the agreement becomes
competition.

research and development,

the

agreements generally also fail
under the third condition (49).

the indispensability test

42. Any claim that restrictive agreements are justified because
they aim at ensuring fair conditions of competition on
the market
is by nature unfounded and must be
discarded (50). The purpose of Article 81 is to protect
effective competition by ensuring that markets remain
open and competitive. The protection of fair conditions
of competition is a task for the legislator in compliance
with Community law obligations (51) and not for under-
takings to regulate themselves.

B. First condition of Article 81(3): Efficiency gains

1. General remarks

43. According to the first condition of Article 81(3)

the
restrictive agreement must contribute to improving the
production or distribution of goods or to promoting
technical or economic progress. The provision refers
expressly only to goods, but applies by analogy to
services. The purpose of this condition is to define the
types of efficiency gains that can be taken into account
and be subject to the further tests of the second, third
and fourth conditions of Article 81(3).

41. Article 81(3) does not exclude a priori certain types of
agreements from its scope. As a matter of principle all
restrictive agreements that fulfil the four conditions of
Article 81(3) are covered by the exception rule (46).
However, severe restrictions of competition are likely to
only fulfil the conditions of Article 81(3) in exceptional
circumstances. Such restrictions are usually black listed in
block exemption regulations or qualified as hardcore
and notices.
in Commission guidelines
restrictions
Agreements of this nature generally fail
(at least) the
two first conditions of Article 81(3). They neither
create objective economic benefits (47) nor do they
a horizontal
For
benefit
agreement to fix prices limits output leading to misal-
location of
from
consumers to producers, since it leads to higher prices
without producing any countervailing value to consumers
these types of
within the relevant market. Moreover,

It also transfers value

consumers (48).

resources.

example,

44. It follows from the case law of the Court of Justice that
only objective benefits can be taken into account (52).
This means that efficiencies are not assessed from the
subjective point of view of the parties (53). Cost savings
that arise from the mere exercise of market power by the
parties cannot be taken into account. For instance, when
companies agree to fix prices or share markets they
reduce output and thereby production costs. Reduced
competition may also lead to lower sales and marketing
expenditures. Such cost reductions are a direct conse-
quence of a reduction in output and value. The cost
produce
reductions
any
In particular,
pro-competitive effects on the market.
they do not lead to the creation of value through an
integration of assets and activities. They merely allow
the undertakings concerned to increase their profits and
are therefore irrelevant from the point of view of Article
81(3).

question

not

do

in

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the

efficiencies (54)

45. For the first condition of Article 81(3) to be met there
link between the agreement and the
must be a causal
efficiencies must
and
claimed
normally result from the economic activity that forms
for
the object of the agreement. Such activities may,
example, take the form of distribution, licensing of tech-
nology,
joint production or joint research and devel-
opment. To the extent, however, that an agreement has
wider efficiency enhancing effects within the relevant
market, for example because it leads to a reduction in
industry wide costs, these additional benefits are also
taken into account.

46. All efficiency claims must be substantiated so that the

following can be verified:

(a) The nature of the claimed efficiencies;

(b) The link between the agreement and the efficiencies;

(c) The likelihood and magnitude of each claimed effi-

ciency;

(d) How and when each claimed efficiency would be

achieved; and

(e) Any cost of achieving the claimed efficiencies.

47. Letter (a) allows the decision-maker to determine whether
the nature of the claimed efficiency is such that it can be
taken into account under Article 81(3).

48. Letter (b) allows the decision-maker to determine whether
there is a sufficient causal
link between the restrictive
agreement and the claimed efficiencies. Normally, a
link is required. Claims based on indirect
direct causal
effects are as a general
rule too uncertain and too
difficult to verify to be taken into account.

49. Letters (c) and (d) allow the decision-maker to determine
the value of the claimed efficiencies, which in the context
of the third condition of Article 81(3) must be balanced
against the anti-competitive effects of the agreement, see
point 89 below. In the case of claimed cost efficiencies
the undertakings invoking the benefit of Article 81(3)
must as accurately as possible calculate the (monetary)
value of the efficiencies and describe in detail how the

amount has been calculated. They must also describe the
method(s) by which the efficiencies have been or will be
achieved. The data submitted must be verifiable so that
there can be a sufficient degree of certainty that the
efficiencies have materialised or will materialise. In the
case of claimed efficiencies in the form of new or
improved products,
the
benefit of Article 81(3) must describe and explain in
detail what is the nature of the improvements and how
and why they constitute an objective economic benefit
compared to existing products.
In cases where the
agreement has yet to be fully implemented the parties
must substantiate any projections as to the date from
which the efficiencies will become operational so as to
have a significant positive impact in the market.

the undertakings

claiming

50. Letter (e) ensures that only net efficiencies are taken into
account. If costs are incurred in obtaining the efficiencies
such costs must be deducted. If, for example, a coop-
eration
reduce
production costs in present values by 50 million EUR
over 5 years and it costs 20 million EUR in present
values to implement the agreement, then the net cost
efficiency generated by the agreement is 30 million EUR.

agreement

parties

allows

the

to

2. The different categories of efficiencies

51. The types of efficiencies listed in Article 81(3) are broad
categories which are intended to cover all objective
economic efficiencies. There
is considerable overlap
between the various categories mentioned in Article
81(3) and the same agreement may give rise to several
kinds of efficiencies.
It is therefore not appropriate to
draw clear and firm distinctions between the various
categories. For
a
distinction is made between cost efficiencies and effi-
ciencies
that create value in the form of new or
improved products.

these guidelines,

the purpose of

52. In general, efficiencies

to achieve what

stem from an integration of
economic activities whereby undertakings combine their
they could not achieve as
assets
efficiently on their own or whereby they entrust
another undertaking with tasks that can be performed
more efficiently by that other undertaking.

53. The

and

research

production

development,

and
distribution process may be viewed as a value chain
that can be divided into a number of stages. At each
stage of this chain an undertaking must make a choice
between performing the activity itself, performing it
together with (an)other undertaking(s) or outsourcing
the activity entirely to (an)other undertaking(s).

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54. In each case where the choice made involves another
undertaking an agreement within the meaning of
Article 81(1) normally needs to be concluded. These
agreements can be vertical, as is the case where the
parties operate at different levels of the value chain or
horizontal, as is the case where the firms operate at the
same level of
the value chain. Both categories of
agreements may create efficiencies by allowing the under-
takings in question to perform a particular task at lower
cost or with higher added value for consumers. However,
such agreements may also contain or lead to restrictions
of competition in which case the prohibition rule of
Article 81(1) and the exception rule of Article 81(3)
may become relevant.

55. The types of efficiencies mentioned in the following are
only examples and are not intended to be exhaustive.

(i) Cost efficiencies

56. Cost efficiencies flowing from agreements between under-
takings can originate from a number of different sources.
One very important source of cost savings is the devel-
opment of new production technologies and methods. In
general, it is when technological leaps are made that the
greatest potential
is achieved. For
instance, the introduction of the assembly line led to a
very substantial reduction in the cost of producing motor
vehicles.

for cost

savings

57. Another very important source of efficiency is synergies
resulting from an integration of existing assets. When the
parties to an agreement combine their respective assets
they may be able to attain a cost/output configuration
that would not otherwise be possible. The combination
of two existing technologies that have complementary
strengths may reduce production costs or lead to the
production of a higher quality product. Similarly, if one
undertaking has optimised one part of the value chain
and another undertaking has optimised another part of
the value chain, the combination of their operations may
lead to lower costs.

58. Cost efficiencies may also result from economies of scale,
i.e. declining cost per unit of output as output increases.
To give an example: investment in equipment and other
assets often has to be made in indivisible blocks. If an
undertaking cannot fully utilise a block, its average costs
will be higher than if it could do so. For instance, the
cost of operating a truck is virtually the same regardless
full.
of whether
Agreements whereby
their
logistics operations may allow them to increase the
vehicles
load factors

empty, half-full or

the number of

undertakings

and reduce

combine

almost

is

it

scale may also allow for better
employed. Larger
division of
labour leading to lower unit costs. Firms
may achieve economies of scale in respect of all parts
of the value chain, including research and development,
Learning
production,
economies constitute a related type of efficiency. As
experience is gained in using a particular production
process or in performing particular tasks, productivity
may increase because the process is made to run more
efficiently or because the task is performed more quickly.

and marketing.

distribution

cost

59. Economies of scope are another source of cost efficiency,
which occur when firms achieve
savings by
producing different products on the basis of the same
input. Such efficiencies may arise from the fact that it
is possible to use the same components and the same
facilities and personnel to produce a variety of products.
Similarly, economies of scope may arise in distribution
when several types of goods are distributed in the same
vehicles. For instance, a producer of frozen pizzas and a
producer of frozen vegetables may obtain economies of
scope by jointly distributing their products. Both groups
of products must be distributed in refrigerated vehicles
and it is likely that there are significant overlaps in terms
of customers. By combining their operations the two
producers may obtain lower distribution costs per
distributed unit.

reducing

60. Efficiencies in the form of cost reductions can also follow
that allow for better planning of
from agreements
production,
the need to hold expensive
inventory and allowing for better capacity utilisation.
Efficiencies of this nature may for example stem from
i.e. an obligation
the use of ‘just in time’ purchasing,
on a supplier of components to continuously supply
the buyer according to its needs thereby avoiding the
need for the buyer to maintain a significant stock of
components which risks becoming obsolete. Cost
savings may also result from agreements that allow the
parties to rationalise production across their facilities.

(ii) Efficiencies taking the form of new or improved products

61. Technical and technological advances form an essential
and dynamic part of the economy, generating significant
benefits in the form of new or improved goods and
services. By cooperating undertakings may be able to
create efficiencies that would not have been possible
without the restrictive agreement or would have been
possible only with substantial delay or at higher cost.
Such efficiencies constitute an important
source of
economic benefits covered by the first condition of
Article 81(3).

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62. Agreements capable of producing efficiencies of

and

licence
agreements,
joint production of new or

this
in particular, research and development
nature include,
agreements
agreements,
providing for
improved
goods or services. Licence agreements may, in particular,
ensure more rapid dissemination of new technology in
the Community and enable the licensee(s)
to make
available new products or to employ new production
techniques. Joint research and development agreements
in particular,
and joint production agreements may,
improved products or services to be
allow new or
introduced on the market more quickly or at
lower
cost (55). In the telecommunications sector, for example,
cooperation agreements have been held to create effi-
ciencies by making available more quickly new global
services (56).
cooperation
banking
agreements that made available improved facilities for
making cross-border payments have also been held to
efficiencies within the meaning of Article
create
81(3) (57).

sector

the

In

63. Improvements

this

category.

in product quality and service levels
constitute yet another example of efficiencies forming
for
part of
example, may be able to provide services
that are
better tailored to customer needs or to provide quicker
delivery or better quality assurance throughout
the
distribution chain (58).

Specialised distributors,

C. Third condition of Article 81(3): Indispensability

of the restrictions

impose

agreement must not

64. According to the third condition of Article 81(3) the
restrictive
restrictions,
which are not indispensable to the attainment of the
efficiencies created by the agreement in question. This
the restrictive
condition implies a two-fold test. First,
agreement as
to
individual
achieve
the
restrictions
flow from the
agreement must also be necessary for the attainment of
the efficiencies.

such must be necessary in order
Secondly,
efficiencies.
that

competition

the

of

produced with the agreement or restriction than in the
absence of the agreement or restriction (59).

In making this latter assessment

66. The first test contained in the third condition of Article
the efficiencies be specific to the
81(3) requires that
agreement in question in the sense that there are no
other practicable and less restrictive means of achieving
the
the efficiencies.
facing the
market conditions and business
parties to the agreement must be taken into account.
Undertakings invoking the benefit of Article 81(3) are
not required to consider purely hypothetical or theor-
etical alternatives. They must only explain and demon-
strate why seemingly realistic and less restrictive alter-
natives to the agreement would be significantly less
efficient.

realities

achieved

efficiencies without

67. It is particularly relevant to examine whether the parties
could have
the
the
restrictive agreement, either on their own or by means
of another less restrictive type of agreement and, if so,
when they would be able to obtain the efficiencies. For
instance, where the claimed efficiencies take the form of
cost reductions resulting from economies of scale or
scope the undertakings concerned must
substantiate
why the same efficiencies would not be likely to be
attained through internal growth and price competition.
In making this assessment it is relevant to consider, inter
alia, what is the minimum efficient scale on the market
concerned. The minimum efficient scale is the level of
output required to minimise average cost and exhaust
the minimum
economies of
efficient scale compared to the current size of either of
the parties to the agreement, the more likely it is that the
efficiencies will be deemed to be
to the
agreement.
that produce
substantial synergies through the combination of comple-
mentary assets and capabilities the very nature of the
efficiencies
the
agreement is necessary to attain them.

In the case of agreements

to a presumption that

scale (60). The

specific

larger

give

rise

65. In the context of the third condition of Article 81(3) the
decisive factor is whether or not the restrictive agreement
and individual restrictions make it possible to perform
the activity in question more efficiently than would
have been the case in the absence of the agreement or
the restriction concerned. The question is not whether in
the absence of the restriction the agreement would not
have been concluded, but whether more efficiencies are

68. Once it

is found that

the agreement

in question is
necessary in order to produce the efficiencies, the indis-
pensability of each restriction of competition flowing
from the agreement must be assessed. In this context it
must be assessed whether
restrictions are
reasonably necessary in order to produce the efficiencies.
The parties to the agreement must substantiate their
claim with regard to both the nature of the restriction
and its intensity.

individual

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69. A restriction is

indispensable if

its absence would
eliminate or significantly reduce the efficiencies
that
follow from the agreement or make it significantly less
likely that they will materialise. The assessment of alter-
native solutions must take into account the actual and
potential improvement in the field of competition by the
elimination of a particular restriction or the application
of a less restrictive alternative. The more restrictive the
restraint the stricter the test under the third condition (61).
Restrictions that are black listed in block exemption regu-
lations
in
Commission guidelines and notices are only likely to be
considered indispensable in exceptional circumstances.

restrictions

hardcore

qualified

or

as

70. The assessment of indispensability is made within the
actual context
in which the agreement operates and
must in particular take account of the structure of the
market, the economic risks related to the agreement, and
the incentives facing the parties. The more uncertain the
success of the product covered by the agreement, the
more a restriction may be required to ensure that the
efficiencies will materialise. Restrictions may also be
indispensable in order to align the incentives of
the
parties and ensure that they concentrate their efforts on
the implementation of the agreement. A restriction may
for instance be necessary in order to avoid hold-up
problems once a substantial sunk investment has been
instance a
made by one of
supplier has made a substantial
relationship-specific
investment with a view to supplying a customer with
an input, the supplier is locked into the customer. In
order to avoid that ex post the customer exploits this
dependence to obtain more favourable terms, it may be
necessary to impose an obligation not to purchase the
component from third parties or to purchase minimum
quantities of the component from the supplier (62).

the parties. Once for

D. Second condition of Article 81(3): Fair share for

consumers

1. General remarks

72. According to the second condition of Article 81(3)
consumers must receive a fair share of the efficiencies
generated by the restrictive agreement.

73. The concept of ‘consumers’ encompasses all users of the
including whol-
products covered by the agreement,
esalers, retailers and final consumers.
In other words,
consumers within the meaning of Article 81(3) are the
customers of the parties to the agreement and subsequent
purchasers. These customers can be undertakings as in
the case of buyers of industrial machinery or an input for
further processing or private individuals as for instance in
the case of buyers of impulse ice cream or bicycles.

74. The concept of ‘fair share’

the net

effect of

agreements,

implies that the pass-on of
benefits must at
least compensate consumers for any
actual or likely negative impact caused to them by the
restriction of competition found under Article 81(1). In
line with the overall objective of Article 81 to prevent
anti-competitive
the
agreement must at least be neutral from the point of
view of consumers within each relevant market. If such
consumers are worse off following the agreement, the
second condition of Article 81(3)
is not fulfilled. The
positive effects of an agreement must be balanced
its negative effects on
against and compensate for
consumers within each relevant market (64). When that
is the case consumers are not harmed by the agreement.
Moreover, society as a whole benefits because the effi-
ciencies lead either to fewer resources being used to
produce the output consumed or to the production of
more valuable products and thus to a more efficient
allocation of resources.

71. In some cases a restriction may be indispensable only for
a certain period of time, in which case the exception of
Article 81(3) only applies during that period. In making
this assessment it is necessary to take due account of the
period of time required for the parties to achieve the
efficiencies justifying the application of
the exception
rule (63). In cases where the benefits cannot be achieved
without
in
particular, be taken of the period of time required to
ensure an adequate return on such investment.

account must,

considerable

investment,

75. It is not required that consumers receive a share of each
and every efficiency gain identified under
the first
condition. It suffices that sufficient benefits are passed
on to compensate for
the
restrictive agreement in which case consumers obtain a
the overall benefits (65).
If a restrictive
fair share of
agreement
and
likely to lead to higher prices
is
consumers are not fully compensated through increased
quality or other benefits, the second condition of Article
81(3) is not fulfilled.

the negative effects of

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the loss

to compensate also for

76. In some cases a certain period of time may be required
before the efficiencies materialise. Until such time the
agreement may have only negative effects. The fact that
pass-on to the consumer occurs with a certain time lag
does not in itself exclude the application of Article 81(3).
However, the greater the time lag, the greater must be
the efficiencies
to
consumers during the period preceding the pass-on.
The decisive factor is the overall impact on consumers
of the products within the relevant market and not the
this group of
impact on individual members of
consumers (66).
it must be
taken into account
the value of a gain for
consumers in the future is not the same as a present
saving 100 EUR
gain for consumers. The value of
than the value of saving the same
today is greater
amount a year
later. A gain for consumers in the
future therefore does not fully compensate for a present
In order to
loss to consumers of equal nominal size.
allow for an appropriate comparison of a present loss
to consumers with a future gain to consumers,
the
value of future gains must be discounted applying an
appropriate discount rate.

In making this assessment

that

77. In other cases the agreement may enable the parties to
obtain the efficiencies earlier than would otherwise be
possible. In such circumstances it is necessary to take
account of
the likely negative impact on consumers
lead-time has
within the relevant market once this
lapsed. If through the restrictive agreement the parties
obtain a strong position on the market, they may be
able to charge a substantially higher price than would
to
otherwise have been the
consumers of having earlier access to the products is
not equally substantial, the second condition of Article
81(3) is unlikely to be fulfilled.

the benefit

case.

If

78. The second condition of Article 81(3)

if

incorporates a
sliding scale. The greater the restriction of competition
found under Article 81(1) the greater must be the effi-
ciencies and the pass-on to consumers. This sliding scale
approach implies that
the restrictive effects of an
agreement are relatively limited and the efficiencies are
substantial it is likely that a fair share of the cost savings
is
will be passed on to consumers.
therefore normally not necessary to engage
in a
the second condition of Article
detailed analysis of
81(3), provided that the three other conditions for the
application of this provision are fulfilled.

In such cases it

79. If, on the other hand,

the restrictive effects of

agreement are substantial and the cost

the
savings are

relatively insignificant, it is very unlikely that the second
condition of Article 81(3) will be fulfilled. The impact of
the restriction of competition depends on the intensity of
the restriction and the degree of competition that
remains following the agreement.

80. If the agreement has both substantial anti-competitive
effects and substantial pro-competitive effects a careful
analysis is required. In the application of the balancing
test in such cases it must be taken into account that
long-term driver of effi-
competition is an important
ciency and innovation. Undertakings
are not
that
subject to effective competitive constraints — such as
for instance dominant firms — have less incentive to
maintain or build on the
efficiencies. The more
substantial the impact of the agreement on competition,
the more likely it is that consumers will suffer in the long
run.

81. The following two sections describe in more detail the
analytical framework for assessing consumer pass-on of
efficiency gains. The first section deals with cost effi-
ciencies, whereas the section that follows covers other
types of efficiencies such as new or improved products.
The framework, which is developed in these two sections,
is particularly important
is not
immediately obvious that the competitive harms exceed
the benefits to consumers or vice versa (67).

in cases where it

82. In the application of the principles set out below the
Commission will have regard to the fact that in many
cases it is difficult to accurately calculate the consumer
pass-on rate and other
types of consumer pass-on.
Undertakings are only required to substantiate their
claims by providing estimates and other data to the
extent reasonably possible, taking account of the circum-
stances of the individual case.

2. Pass-on and balancing of cost efficiencies

83. When markets, as is normally the case, are not perfectly
competitive, undertakings are able to influence the
market price to a greater or lesser extent by altering
their output (68). They may also be able to price
discriminate amongst customers.

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for

84. Cost efficiencies may in some circumstances lead to
increased output and lower prices
the affected
consumers. If due to cost efficiencies the undertakings
in question can increase profits by expanding output,
consumer pass-on may occur. In assessing the extent to
which cost efficiencies are likely to be passed on to
consumers and the outcome of
the balancing test
contained in Article 81(3) the following factors are in
particular taken into account:

(a) The characteristics and structure of the market,

(b) The nature and magnitude of the efficiency gains,

(c) The elasticity of demand, and

(d) The magnitude of the restriction of competition.

All factors must normally be considered. Since Article
81(3) only applies in cases where competition on the
market is being appreciably restricted, there can be no
presumption that residual competition will ensure that
consumers receive a fair share of the benefits.

the agreement may turn the undertakings concerned into
so-called ‘mavericks’ (70).

is

two

each

revenue

produce

set, pricing

equals marginal

86. The nature of the efficiency gains also plays an important
role. According
theory undertakings
to economic
maximise their profits by selling units of output until
cost. Marginal
marginal
revenue is the change in total revenue resulting from
selling an additional unit of output and marginal cost is
the change in total cost resulting from producing that
additional unit of output. It follows from this principle
that as a general rule output and pricing decisions of a
profit maximising undertaking are not determined by its
fixed costs (i.e. costs that do not vary with the rate of
production) but by its variable costs (i.e. costs that vary
fixed costs are
with the rate of production). After
incurred and capacity
and output
decisions are determined by variable cost and demand
conditions. Take for instance a situation in which two
companies
two
production lines operating only at half their capacities.
A specialisation agreement may allow the two under-
takings
the two
to specialise in producing one of
products and scrap their second production line for the
other product. At the same time the specialisation may
to reduce variable input and
allow the companies
stocking costs. Only the latter savings will have a direct
effect on the pricing and output decisions of the under-
takings, as they will
influence the marginal costs of
production. The scrapping by each undertaking of one
of their production lines will not reduce their variable
costs and will not have an impact on their production
costs.
It follows that undertakings may have a direct
incentive to pass on to consumers in the form of
higher output and lower prices efficiencies that reduce
marginal costs, whereas they have no such an incentive
with regard to efficiencies
reduce fixed costs.
Consumers are therefore more likely to receive a fair
share of the cost efficiencies in the case of reductions
in variable costs than they are in the case of reductions
in fixed costs.

products

that

on

85. The degree of competition remaining on the market and
the nature of this competition influences the likelihood of
pass-on. The greater the degree of residual competition
the more likely it is that individual undertakings will try
to increase their sales by passing on cost efficiencies. If
undertakings compete mainly on price and are not
subject to significant capacity constraints, pass-on may
occur relatively quickly.
If competition is mainly on
capacity and capacity adaptations occur with a certain
time lag, pass-on will be slower. Pass-on is also likely
to be slower when the market structure is conducive to
tacit collusion (69). If competitors are likely to retaliate
against an increase in output by one or more parties to
the agreement, the incentive to increase output may be
tempered, unless the competitive advantage conferred by
the efficiencies is such that the undertakings concerned
have an incentive to break away from the common
policy adopted on the market by the members of the
oligopoly. In other words, the efficiencies generated by

87. The fact that undertakings may have an incentive to pass
on certain types of cost efficiencies does not imply that
the pass-on rate will necessarily be 100 %. The actual
pass-on rate depends on the extent to which consumers
respond to changes in price, i.e. the elasticity of demand.
The greater the increase in demand caused by a decrease
in price, the greater the pass-on rate. This follows from
that fact that the greater the additional sales caused by a
price reduction due to an increase in output the more
likely it is that these sales will offset the loss of revenue
caused by the lower price resulting from the increase in
output.
In the absence of price discrimination the
lowering of prices affects all units sold by the under-
taking, in which case marginal revenue is less than the
price obtained for the marginal product. If the under-
takings concerned are able to charge different prices to
different customers,
i.e. price discriminate, pass-on will
normally only benefit price sensitive consumers (71).

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88. It must also be taken into account that efficiency gains
often do not affect the whole cost structure of the under-
takings concerned. In such event the impact on the price
to consumers is reduced. If for example an agreement
allows the parties to reduce production costs by 6 %,
but production costs only make up one third of the
costs on the basis of which prices are determined, the
impact on the product price is 2 %, assuming that the full
amount is passed-on.

agreement is to increase prices for consumers within the
relevant market it must be carefully assessed whether the
claimed efficiencies create real value for consumers in
that market so as to compensate for the adverse effects
of the restriction of competition.

E. Fourth condition of Article 81(3): No elimination

of competition

89. Finally, and very importantly, it is necessary to balance
the two opposing forces resulting from the restriction of
competition and the cost efficiencies. On the one hand,
any increase in market power caused by the restrictive
agreement gives the undertakings concerned the ability
and incentive to raise price. On the other hand, the types
of cost efficiencies that are taken into account may give
the undertakings concerned an incentive to reduce price,
see point 87 above. The effects of these two opposing
forces must be balanced against each other. It is recalled
in this regard that the consumer pass-on condition incor-
porates a sliding scale. When the agreement causes a
substantial
constraint
facing the parties, extraordinarily large cost efficiencies
are normally required for sufficient pass-on to occur.

reduction in the

competitive

3. Pass-on and balancing of other types of efficiencies

93. According to the fourth condition of Article 81(3) the
agreement must not afford the undertakings concerned
the possibility of eliminating competition in respect of a
substantial part of the products concerned. Ultimately the
protection of the long term competitive structure is given
priority over potentially pro-competitive efficiency gains
which could result from restrictive agreements in the
short term. The last condition of Article 81(3) recognises
the fact that rivalry between undertakings is an essential
including longer-term
driver of economic efficiency,
In
dynamic efficiencies
other words,
to
protect the competitive process not only in the short
term but also in the long term. When competition is
eliminated the competitive process is brought to an end
and short-term efficiency gains are outweighed by
longer-term losses stemming inter alia from expenditures
incurred by the incumbent to maintain its position (rent
seeking), misallocation of resources, reduced innovation
and higher prices.

innovation.
the ultimate aim of Article 81 is

in the shape of

90. Consumer pass-on can also take the form of new and
value
for
anti-competitive

improved
consumers
effects of the agreement, including a price increase.

products,
to compensate

sufficient
the

creating

for

91. Any such assessment necessarily requires value judgment.
It is difficult to assign precise values to dynamic effi-
ciencies of
fundamental
objective of the assessment remains the same, namely
to ascertain the overall impact of the agreement on the
consumers within the relevant market.

this nature. However,

the

92. The

improved

availability

of new and

products
constitutes an important source of consumer welfare.
As long as the increase in value stemming from such
improvements exceeds any harm from an increase in
price caused by the restrictive agreement, consumers
the agreement and the
are better off
consumer pass-on requirement of Article 81(3)
is
normally fulfilled. In cases where the likely effect of the

than without

94. The

concept

in Article 81(3) of

elimination of
competition in respect of a substantial part of
the
products concerned is an autonomous Community law
concept specific to Article 81(3) (72). However, according
to settled case law the application of Article 81(3) cannot
prevent the application of Article 82 of the Treaty (73).
Similarly,
the application of Article 81(3) does not
prevent the application of the Treaty rules on the free
movement of goods, services, persons and capital (74).

95. Moreover, since Articles 81 and 82 both pursue the aim
of maintaining effective competition on the market,
consistency requires that Article 81(3) be interpreted as
precluding any application of this provision to restrictive
agreements
that constitute an abuse of a dominant
position (75) (76). However, not all restrictive agreements
concluded by a dominant undertaking constitute an
abuse of a dominant position. This is for instance the
case where a dominant undertaking is party to a
non-full function joint venture (77), which is found to
the same time
be restrictive of competition but at
involves
Such
substantial
agreements may, depending on the circumstances, be
considered objectively justified under Article 82 and
thus not abusive.

integration of

assets.

a

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96. The existence of an elimination of competition within the
meaning of the last condition of Article 81(3) depends on
the degree of competition existing prior to the agreement
and on the impact of
the restrictive agreement on
i.e. the reduction in competition that the
competition,
agreement brings
competition is
already weakened in the market concerned the slighter
the further reduction required for competition to be elim-
inated within the meaning of Article 81(3). Moreover, the
the reduction of competition caused by the
greater
the greater the likelihood that competition
agreement
in respect of
the products
a
concerned risks being eliminated.

substantial part of

about. The more

97. The application of the last condition of Article 81(3)
requires an analysis of the various sources of competition
in the market, the level of competitive constraint that
they impose on the parties to the agreement and the
impact of the agreement on this competitive constraint.
Both
be
considered.

competition must

potential

actual

and

98. In the assessment of the impact of the agreement on
competition it is also relevant to examine its influence
on the various parameters of competition. The last
condition for exception under Article 81(3)
is not
fulfilled, if the agreement eliminates competition in one
of its most important expressions. This is particularly the
case when an agreement eliminates price competition (78)
or competition in respect of innovation and development
of new products.

99. The magnitude

of

of

sources

actual
remaining
competition cannot be assessed purely on the basis of
market share. More extensive qualitative and quantitative
analysis is normally called for. The capacity of actual
competitors to compete and their incentive to do so
must be examined.
for example, competitors face
capacity constraints or have relatively higher costs of
production their competitive response will necessarily
be limited.

If,

100. The actual market conduct of the parties can provide
If following
insight into the impact of the agreement.
the conclusion of the agreement the parties have imple-
mented and maintained substantial price increases or
engaged in other conduct indicative of the existence of
a considerable degree of market power, it is an indication
that the parties are not subject to any real competitive
pressure and that competition has been eliminated with
regard to a substantial part of the products concerned.

101. Past competitive interaction may also provide an indi-
cation of
the agreement on future
competitive interaction. An undertaking may be able to
eliminate competition within the meaning of Article

the impact of

81(3) by concluding an agreement with a competitor
in the past has been a ‘maverick’ (79). Such an
that
agreement may change the competitive incentives and
capabilities of the competitor and thereby remove an
important source of competition in the market.

the

that

offer

constraint

competitive

undertakings

sold by the parties

102. 2. In cases involving differentiated products, i.e. products
that differ in the eyes of consumers, the impact of the
agreement may depend on the competitive relationship
to the
between the products
differentiated
agreement. When
products
individual
products impose on each other differs according to the
degree of substitutability between them. It must therefore
be considered what
the degree of substitutability
between the products offered by the parties, i.e. what is
the competitive constraint
they impose on each
the parties to the
other. The more the products of
agreement are close substitutes the greater the likely
restrictive effect of the agreement. In other words, the
more substitutable the products the greater the likely
in terms of
change brought about by the agreement
restriction of competition on the market and the more
likely it is that competition in respect of a substantial
part of the products concerned risks being eliminated.

that

is

103. While sources of actual competition are usually the most
important, as they are most easily verified, sources of
potential competition must also be taken into account.
The assessment of potential competition requires an
analysis of barriers to entry facing undertakings that are
not already competing within the relevant market. Any
assertions by the parties that there are low barriers to
market entry must be supported by information ident-
ifying the sources of potential competition and the
parties must
sources
also substantiate why
constitute a real competitive pressure on the parties.

these

104. In the assessment of entry barriers and the real possibility
inter alia, the

it is relevant to examine,

for new entry,
following:

(i) The regulatory framework with a view to deter-

mining its impact on new entry.

(ii) The cost of entry including sunk costs. Sunk costs
are those that cannot be recovered if the entrant
subsequently exits the market. The higher the sunk
costs the higher the commercial risk for potential
entrants.

rate of output where

(iii) The minimum efficient scale within the industry, i.e.
the
are
minimised. If the minimum efficient scale is large
compared to the size of the market, efficient entry
is likely to be more costly and risky.

average

costs

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the

(iv) The competitive strengths of potential entrants.
Effective entry is particularly likely where potential
entrants have access to at least as cost efficient
or
technologies
other
allow them to
competitive
compete effectively. When potential entrants are
on the same or an inferior technological trajectory
compared to the incumbents and possess no other
significant competitive advantage entry is more
risky and less effective.

incumbents
that

as
advantages

in
competition if
question will pave the way for effective new
entry (80).

the buyers

likely that

is

it

(vi) The likely response of

incumbents to attempted
new entry. Incumbents may for example through
past
reputation of
aggressive behaviour, having an impact on future
entry.

conduct have

acquired a

(v) The position of buyers and their ability to bring
onto the market new sources of competition. It is
irrelevant that certain strong buyers may be able to
extract more favourable conditions from the parties
to the agreement than their weaker competitors.
The presence of strong buyers can only serve to
finding of elimination of
counter a prima facie

(vii) The economic outlook for the industry may be an
indicator of its longer-term attractiveness. Industries
that are stagnating or in decline are less attractive
candidates for entry than industries characterised by
growth.

(viii) Past entry on a significant scale or the absence

thereof.

___________

(1) OJ L 1, 4.1.2003, p. 1.

(2) All existing block exemption regulations and Commission notices are available on the DG Competition web site: http://www.europa.eu.int/comm/

dgs/competition

(3) See point 32 below.

(4) See Commission Notice on Guidelines on vertical restraints (OJ C 291, 13.10.2000, p. 1) and Commission Notice on Guidelines on the

application of Article 81 of the Treaty to horizontal cooperation agreements (OJ C 3, 6.1.2001, p. 2).

(5) In the following the term ‘agreement’ includes concerted practices and decisions of associations of undertakings.

(6) The concept of effect on trade between Member States is dealt with in separate guidelines.

(7) In the following the term ‘restriction’ includes the prevention and distortion of competition.

(8) According to Article 81(2) such agreements are automatically void.

(9) See Case T-112/99, Métropole Télévision (M6) and others, [2001] ECR II-2459, paragraph 74, where the Court of First Instance held that it is

only in the precise framework of Article 81(3) that the pro- and anti-competitive aspects of a restriction may be weighed.

(10) See e.g. Case C-49/92 P, Anic Partecipazioni, [1999] ECR I-4125, paragraph 116; and Joined Cases 40/73 to 48/73 and others, Suiker Unie,

[1975] ECR page 1663, paragraph 173.

(11) See in this respect e.g. Case 14/68, Walt Wilhelm, [1969] ECR 1.

(12) Not all agreements, decisions and concerted practices within the meaning of Article 81(1), which are capable of affecting trade between Member

States, are restrictive of competition.

(13) See Joined Cases T-25/95 and others, Cimenteries CBR, [2000] ECR II-491, paragraphs 1849 and 1852; and Joined Cases T-202/98 and others,

British Sugar, [2001] ECR II-2035, paragraphs 58 to 60.

(14) See to that effect Case C-453/99, Courage v Crehan, [2001] ECR I-6297, and paragraph 3444 of the judgment in Cimenteries CBR cited in the

previous note.

(15) See e.g. Joined Cases 25/84 and 26/84, Ford, [1985] ECR 2725.

(16) See e.g. paragraph 99 of the judgment in Anic Partecipazioni cited in note 10.

(17) See point 41 below.

(18) See Joined Cases 29/83 and 30/83, CRAM and Rheinzink, [1984] ECR 1679, paragraph 26, and Joined Cases 96/82 and others, ANSEAU-

NAVEWA, [1983] ECR 3369, paragraphs 23-25.

(19) See the Guidelines on horizontal cooperation agreements, cited in note 4, point 25, and Article 5 of Commission Regulation (EC) No 2658/2000

on the application of Article 81(3) of the Treaty to categories of specialisation agreements (OJ L 304, 5.12.2000, p. 3).

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(20) See Article 4 Commission Regulation (EC) No 2790/1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements
and concerted practices (OJ L 336, 29.12.1999, p. 21), and the Guidelines on Vertical Restraints, cited in note 4, point 46 et seq. See also Case
279/87, Tipp-Ex, [1990] ECR I-261, and Case T-62/98, Volkswagen v Commission, [2000] ECR II-2707, paragraph 178.

(21) See Case C-7/95 P, John Deere, [1998] ECR I-3111, paragraph 77.

(22) Guidance on the issue of appreciability can be found in Commission notice on agreements of minor importance which do not appreciably
restrict competition under Article 81(1) of the Treaty (OJ C 368, 22.12.2001, p. 13). The notice defines appreciability in a negative way.
Agreements, which fall outside the scope of the de minimis notice, do not necessarily have appreciable restrictive effects. An individual assessment
is required.

(23) See in this respect Commission notice on the definition of the relevant market for the purposes of Community competition law (OJ C 372,

9.12.1997, p. 5).

(24) For the reference in the OJ see note 4.

(25) See Case 56/65, Société Technique Minière, [1966] ECR 337, and paragraph 76 of the judgment in John Deere, cited in note 21.

(26) See in this respect e.g. Joined Cases 56/64 and 58/66, Consten and Grundig, [1966] ECR 429.

(27) See rule 10 in point 119 of the Guidelines on vertical restraints cited in note 4 above, according to which inter alia passive sales restrictions — a
hardcore restraint — are held to fall outside Article 81(1) for a period of 2 years when the restraint is linked to opening up new product or
geographic markets.

(28) See paragraph 104 of the judgment in Métropole Télévision (M6) and others, cited in note 9.

(29) See e.g. Case C-399/93, Luttikhuis, [1995] ECR I-4515, paragraphs 12 to 14.

(30) See paragraph 107 of the judgment in Métropole Télévision cited in note 9.

(31) See e.g. Commission Decision in Elopak/Metal Box — Odin (OJ L 209, 8.8.1990, p. 15).

(32) See Case 161/84, Pronuptia, [1986] ECR 353.

(33) See the judgment in Consten and Grundig, cited in note 26.

(34) See e.g. Case C-234/89, Delimitis, [1991] ECR I-935, paragraph 46.

(35) Article 36(4) of Regulation (EC) No 1/2003 has, inter alia, repealed Article 5 of Regulation (EEC) No 1017/68 applying rules of competition to
transport by rail, road and inland waterway. However, the Commission's case practice adopted under Regulation (EEC) No 1017/68 remains
relevant for the purposes of applying Article 81(3) in the inland transport sector.

(36) See point 38 below.

(37) See e.g. Case T-185/00 and others, Métropole Télévision SA (M6), [2002] ECR II-, paragraph 86, Case T-17/93, Matra, ECR [1994] II-595,

paragraph 85; and Joined Cases 43/82 and 63/82, VBVB and VBBB, [1984] ECR 19, paragraph 61.

(38) See Case T-213/00, CMA CGM and others, [2003] ECR II-, paragraph 226.

(39) See to that effect implicitly paragraph 139 of the Matra judgment cited in note 37 and Case 26/76, Metro (I), [1977] ECR 1875, paragraph 43.

(40) As to the concept of consumers see point 73 below where it is stated that consumers are the customers of the parties and subsequent buyers.

The parties themselves are not ‘consumers’ for the purposes of Article 81(3).

(41) The test is market specific, see to that effect Case T-131/99, Shaw, [2002] ECR II-2023, paragraph 163, where the Court of First Instance held
that the assessment under Article 81(3) had to be made within the same analytical framework as that used for assessing the restrictive effects, and
Case C-360/92 P, Publishers Association, [1995] ECR I-23, paragraph 29, where in a case where the relevant market was wider than national the
Court of Justice held that in the application of Article 81(3) it was not correct only to consider the effects on the national territory.

(42) See in this respect Case T-86/95, Compagnie Générale Maritime and others, [2002] ECR II-1011, paragraphs 343 to 345. This case concerned
intermodal transport services encompassing a bundle of, inter alia, inland and maritime transportation provided to shipping companies across the
Community. The restrictions related to inland transport services, which were held to constitute a separate market, whereas the benefits were
claimed to occur in relation to maritime transport services. In this case consumers of both services were therefore the same.

(43) See points 126 and 132 of the Guidelines on horizontal co-operation agreements cited in note 4 above.

(44) See the Ford judgment cited in note 15.

(45) See in this respect for example Commission Decision in TPS (OJ L 90, 2.4.1999, p. 6). Similarly, the prohibition of Article 81(1) also only applies

as long as the agreement has a restrictive object or restrictive effects.

(46) See paragraph 85 of the Matra judgment cited in note 37.

(47) As to this requirement see point 44 below.

(48) See e.g. Case T-29/92, Vereniging van Samenwerkende Prijsregelende Organisaties in de Bouwnijverheid (SPO), [1995] ECR II-289.

(49) See e.g. Case 258/78, Nungesser, [1982] ECR 2015, paragraph 77, concerning absolute territorial protection.

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(50) See in this respect e.g. paragraph 298 of the judgment in SPO cited in note 48.

(51) National measures must, inter alia, comply with the Treaty rules on free movement of goods, services, persons and capital.

(52) See e.g. the judgment in Consten and Grundig cited in note 26.

(53) See in this respect Commission Decision in Van den Bergh Foods (OJ L 246, 4.9.1998, p. 1).

(54) See in this respect Commission Decision in Glaxo Wellcome (OJ L 302, 17.11.2001, p. 1).

(55) See e.g. Commission Decision in GEAE/P&W (OJ L 58, 3.3.2000, p. 16); in British Interactive Broadcasting/Open (OJ L 312, 6.12.1999, p. 1) and

in Asahi/Saint Gobain (OJ L 354, 31.12.1994, p. 87).

(56) See e.g. Commission Decision in Atlas (OJ L 239, 19.9.1999, p. 23), and in Phoenix/Global One (OJ L 239, 19.9.1996, p. 57).

(57) See e.g. Commission Decision in Uniform Eurocheques (OJ L 35, 7.2.1985, p. 43).

(58) See e.g. Commission Decision in Cégétel + 4 (OJ L 218, 18.8.1999, p. 14)

(59) As to the former question, which may be relevant in the context of Article 81(1), see point 24 above.

(60) Scale economies are normally exhausted at a certain point. Thereafter average costs will stabilise and eventually rise due to, for example, capacity

constraints and bottlenecks.

(61) See in this respect paragraphs 392 to 395 of the judgment in Compagnie Générale Maritime cited in note 40.

(62) See for more detail point 116 of the Guidelines on Vertical Restraints cited in note 4.

(63) See Joined Cases T-374/94 and others, European Night Services, [1998] ECR II-3141, paragraph 230.

(64) See in this respect the judgment in Consten and Grundig cited in note 26, where the Court of Justice held that the improvements within the
meaning of the first condition of Article 81(3) must show appreciable objective advantages of such a character as to compensate for the
disadvantages which they cause in the field of competition.

(65) See in this respect paragraph 48 of the Metro (I) judgment cited in note 39.

(66) See paragraph 163 of the judgment in Shaw cited in note 41.

(67) In the following sections, for convenience the competitive harm is referred to in terms of higher prices; competitive harm could also mean lower

quality, less variety or lower innovation than would otherwise have occurred.

(68) In perfectly competitive markets individual undertakings are price takers. They sell their products at the market price, which is determined by
overall supply and demand. The output of the individual undertaking is so small that any individual undertaking's change in output does not
affect the market price.

(69) Undertakings collude tacitly when in an oligopolistic market they are able to coordinate their action on the market without resorting to an

explicit cartel agreement.

(70) This term refers to undertakings that constrain the pricing behaviour of other undertakings in the market and keep their prices lower than they

would otherwise have been.

(71) The restrictive agreement may even allow the undertakings in question to charge a higher price to customers with a low elasticity of demand.

(72) See Case T-395/94, Atlantic Container Line, [2002] ECR II-875, paragraph 330.

(73) See Joined Cases C-395/96 P and C-396/96 P, Compagnie Maritime Belge, [2000] ECR I-1365, paragraph 130.

(74) These provisions are in certain circumstances applicable to agreements, decisions and concerted practices within the meaning of Article 81(1), see

to that effect Case C-309/99, Wouters, [2002] ECR I-1577, paragraph 120.

(75) See in this respect Case T-51/89, Tetra Pak (I), [1990] ECR II-309.

(76) This is how point 135 of the Guidelines on vertical restraints and points 36, 71, 105, 134 and 155 of the Guidelines on horizontal cooperation
agreements, cited in note 4, should be understood when they state that in principle restrictive agreements concluded by dominant undertakings
cannot be exempted.

(77) Full function joint ventures, i.e. joint ventures that perform on a lasting basis all the functions of an autonomous economic entity, are covered by

Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (OJ L 257, 21.9.1990, p. 13).

(78) See paragraph 21 of the judgment in Metro (I) cited in note 39.

(79) See point 85 above.

(80) See in this respect Case T-228/97, Irish Sugar, [1999] ECR II-2969, paragraph 101.