Guidelines on the effect on trade concept contained in Articles 53 and 54 of the EEA Agreement
Date: 2006-11-30
Institutions: EFTA Surveillance Authority
Subjects: application of EU law, competition law, trade regulations, trading operation

C 291/46

EN

Official Journal of the European Union

30.11.2006

EUROPEAN ECONOMIC AREA

EFTA SURVEILLANCE AUTHORITY

Guidelines on the effect on trade concept contained in Articles 53 and 54 of the EEA Agreement

(2006/C 291/17)

A.

B.

C.

D.

E.

1.

1.

2.

The present notice is issued pursuant to the rules of the Agreement on the European Economic
Area (hereafter the ‘EEA Agreement’) and the Agreement between the EFTA States on the establish-
ment of a Surveillance Authority and a Court of Justice (hereafter the ‘Surveillance and Court Agree-
ment’).

The European Commission (hereafter the ‘Commission’) has issued a notice entitled ‘Guidelines on
the effect on trade concept contained in Articles 81 and 82 of the Treaty’ (1). That non-binding act
sets out the principles for the interpretation of the effect on trade concept of Articles 81 and 82 of
the EC Treaty. The notice also intends to set out the methodology for the application of the effect
on trade concept and gives guidance on its application.

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

In particular, the notice sets out the principles for the interpretation of the effect on trade concept
of Articles 53 and 54 of the EEA Agreement. The notice also intends to set out the methodology
for the application in the EFTA pillar of the effect on trade concept and to give guidance on its
application

The present notice applies to cases where the Authority is the competent surveillance authority
under Article 56 of the EEA Agreement.

INTRODUCTION

Articles 53 and 54 of the EEA Agreement are applicable to horizontal and vertical agreements and
practices on the part of undertakings which ‘may affect trade between Contracting Parties’.

In the interpretation by the EFTA Court of Articles 53 and 54 of the EEA Agreement and the Com-
munity Courts of the corresponding Articles 81 and 82 of the EC Treaty, the content and scope of
the concept of effect on trade between Contracting Parties to the EEA Agreement (hereafter ‘EEA
States’) have already been substantially clarified (3).

(1) OJ C 101, 27.4.2004, p. 81.
(2) The competence to handle individual cases falling under Articles 53 and 54 of the EEA Agreement is divided
between the EFTA Surveillance Authority and the Commission according to the rules laid down in Article 56 of the
EEA Agreement. Only one of the surveillance authorities is competent to handle any given case.

(3) Article 6 of the EEA Agreement provides that, without prejudice to future developments of case-law, the provisions
of this Agreement, in so far as they are identical in substance to corresponding rules of the Treaty establishing the
European Community and the Treaty establishing the European Coal and Steel Community and to acts adopted in
application of these two treaties, shall in their implementation and application, be interpreted in conformity with the
relevant rulings of the Court of Justice of the European Communities given prior to the date of signature of the EEA
Agreement. As regards relevant rulings by the Court of Justice given after the date of signature of the EEA Agree-
ment, it follows from Article 3(2) of the Surveillance and Court Agreement that the EFTA Surveillance Authority and
the EFTA Court shall pay due account to the principles laid down by these rulings.

30.11.2006

EN

Official Journal of the European Union

C 291/47

3.

4.

5.

The present guidelines set out the principles developed by the EFTA Court and the Community
Courts in relation to the interpretation of the effect on trade concept of Articles 53 and 54 of the
EEA Agreement and the corresponding provisions of the EC Treaty. They further spell out a rule
indicating when agreements are in general unlikely to be capable of appreciably affecting trade
between EEA States (the no appreciable 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.
Although not binding on them, these guidelines also intend to give guidance to the courts and
authorities of the EFTA States in their application of the effect on trade concept contained in Arti-
cles 53 and 54 of the EEA Agreement.

The present guidelines do not address the issue of what constitutes an appreciable restriction of
competition under Article 53(1). This issue, which is distinct from the ability of agreements to
appreciably affect trade between EEA States, is dealt with in the EFTA Surveillance Authority Notice
on agreements of minor importance which do not appreciably restrict competition under Article
53(1) of the EEA Agreement (4) (the de minimis rule). The guidelines are also not intended to provide
guidance on the effect on trade concept contained in Article 61(1) of the EEA Agreement on State
aid.

These guidelines, including the NAAT-rule, are without prejudice to the interpretation of Articles 53
and 54 of the EEA Agreement which may be given by the EFTA Court, the Court of Justice of the
European Communities and the Court of First Instance.

2.

THE EFFECT ON TRADE CRITERION

2.1. General principles

6.

7.

8.

9.

Article 53(1) provides that ‘the following shall be prohibited as incompatible with the functioning
of this Agreement: all agreements between undertakings, decisions by associations of undertakings
and concerted practices which may affect trade between Contracting Parties and which have as their
object or effect the prevention, restriction or distortion of competition within the territory covered
by this Agreement.’ For the sake of simplicity the terms ‘agreements, decisions by associations of
undertakings and concerted practices’ are collectively referred to as ‘agreements’.

Article 54 on its part stipulates that ‘any abuse by one or more undertakings of a dominant position
within the territory covered by this Agreement or in a substantial part of it shall be prohibited as
incompatible with the functioning of this Agreement in so far as it may affect trade between
Contracting Parties.’ In what follows the term ‘practices’ refers to the conduct of dominant undertak-
ings.

The effect on trade criterion also determines the scope of application of Article 3 of Chapter II of
Protocol 4 of the Surveillance and Court Agreement (hereafter ‘Chapter II’) on the implementation
of the rules on competition laid down in Articles 53 and 54 of the EEA Agreement (5).

According to Article 3(1) of Chapter II the competition authorities and courts of the EFTA States
must apply Article 53 to agreements, decisions by associations of undertakings or concerted prac-
tices within the meaning of Article 53(1) of the EEA Agreement which may affect trade between
EEA States within the meaning of that provision, when they apply national competition law to such
agreements, decisions or concerted practices. Similarly, when the competition authorities and courts
of the EFTA States apply national competition law to any abuse prohibited by Article 54 of the

(4) EFTA Surveillance Authority Notice on agreements of minor importance which do not appreciably restrict competi-
tion under Article 53(1) of the EEA Agreement (de minimis), OJ C 67, 20.3.2003, p. 20 and EEA Supplement to the
OJ No 15, 20.3.2003, p. 11.

(5) When the Agreement amending Protocol 4 to the Agreement of the EFTA States on the establishment of a Surveil-
lance Authority and a Court of Justice of 24 September 2004 has entered into force, Chapter II of Protocol 4 of the
Surveillance and Court Agreement will reflect to a large extent in the EFTA pillar Council Regulation (EC) No 1/2003
(OJ L 1, 4.1. 2003, p. 1).

C 291/48

EN

Official Journal of the European Union

30.11.2006

EEA Agreement, they must also apply Article 54 of the EEA Agreement. Article 3(1) thus obliges
the competition authorities and courts of the EFTA States to also apply Articles 53 and 54 when
they apply national competition law to agreements and abusive practices which may affect trade
between EEA States. On the other hand, Article 3(1) does not oblige national competition authori-
ties and courts of the EFTA States to apply national competition law when they apply Articles 53
and 54 to agreements, decisions and concerted practices and to abuses which may affect trade
between EEA States. They may in such cases apply the EEA competition rules on a stand alone
basis.

It follows from Article 3(2) that the 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 EEA States but which do not restrict competition within the meaning of
Article 53(1) of the EEA Agreement, or which fulfil the conditions of Article 53(3) of the EEA
Agreement or which are covered by an act corresponding to a Community Regulation for the appli-
cation of Article 81(3) of the EC Treaty referred to in Annex XIV to the EEA Agreement. EFTA
States, however, are not under Chapter II precluded from adopting and applying on their territory
stricter national laws which prohibit or sanction unilateral conduct engaged in by undertakings.

Finally it should be mentioned that Article 3(3) of Chapter II stipulates that without prejudice to
general principles and other provisions of EEA law, Article 3(1) and (2) do not apply when the
competition authorities and the courts of the EFTA States apply national merger control laws, nor
do they preclude the application of provisions of national law that predominantly pursue an objec-
tive different from that pursued by Articles 53 and 54 of the EEA Agreement.

The effect on trade criterion is an autonomous EEA law criterion, which must be assessed separately
in each case. It is a jurisdictional criterion, which defines the scope of application of EEA competi-
tion law (6). EEA competition law is not applicable to agreements and practices that are not capable
of appreciably affecting trade between EEA States.

The effect on trade criterion confines the scope of application of Articles 53 and 54 to agreements
and practices that are capable of having a minimum level of cross-border effects within the territory
covered by the EEA Agreement (hereafter the ‘EEA’). The ability of the agreement or practice to
affect trade between EEA States must be ‘appreciable’ (7).

In the case of Article 53 of the EEA Agreement, it is the agreement that must be capable of affecting
trade between EEA States. It is not required that each individual part of the agreement, including
any restriction of competition which may flow from the agreement, is capable of doing so (8). If the
agreement as a whole is capable of affecting trade between EEA States, there is EEA law jurisdiction
in respect of the entire agreement, including any parts of the agreement that individually do not
affect trade between EEA States. In cases where the contractual relations between the same parties
cover several activities, these activities must,
in order to form part of the same agreement, be
directly linked and form an integral part of the same overall business arrangement (9). If not, each
activity constitutes a separate agreement.

10.

11.

12.

13.

14.

15.

It is also immaterial whether or not the participation of a particular undertaking in the agreement
has an appreciable effect on trade between EEA States (10). An undertaking cannot escape EEA law
jurisdiction merely because of the fact that its own contribution to an agreement, which itself is
capable of affecting trade between EEA States, is insignificant.

(6) 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.

(7) See in this respect Case 22/71, Béguelin, [1971] ECR p. 949, paragraph 16 and EFTA Surveillance Authority Deci-

sion in NSF, OJ L 284, 16.10.1997, p 68, paragraph 77.

(8) See Case 193/83, Windsurfing, [1986] ECR p. 611, paragraph 96, and Case T-77/94, Vereniging van Groothande-

laren in Bloemkwekerijprodukten, [1997] ECR II-759, paragraph 126.

(9) See paragraphs 142 to 144 of the judgment in Vereniging van Groothandelaren in Bloemkwekerijprodukteten cited

in the previous footnote.

(10) See e.g. Case T-2/89, Petrofina, [1991] ECR II-1087, paragraph 226.

30.11.2006

EN

Official Journal of the European Union

C 291/49

16.

17.

It is not necessary, for the purposes of establishing EEA law jurisdiction, to establish a link between
the alleged restriction of competition and the capacity of the agreement to affect trade between EEA
States. Non-restrictive agreements may also affect trade between EEA States. For example, selective
distribution agreements based on purely qualitative selection criteria justified by the nature of the
products, which are not restrictive of competition within the meaning of Article 53(1), may never-
theless affect trade between EEA States. However, the alleged restrictions arising from an agreement
may provide a clear indication as to the capacity of the agreement to affect trade between EEA
States. For instance, a distribution agreement prohibiting exports is by its very nature capable of
affecting trade between EEA States, although not necessarily to an appreciable extent (11).

In the case of Article 54 it is the abuse that must affect trade between EEA States. This does not
imply, however, that each element of the behaviour must be assessed in isolation. Conduct that
forms part of an 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, in order for Article 54
to be applicable to all the practices forming part of this overall strategy, it is sufficient that at least
one of these practices is capable of affecting trade between EEA States (12).

18.

It follows from the wording of Articles 53 and 54 of the EEA Agreement and the case law of the
Community Courts that in the application of the effect on trade criterion three elements in particu-
lar must be addressed:

(a) The concept of ‘trade between Contracting Parties’,

(b) The notion of ‘may affect’, and

(c) The concept of appreciability.

2.2.

The concept of ‘trade between Contracting Parties’

19.

20.

21.

‘trade’

The concept of
limited to traditional exchanges of goods and services across
borders (13). It is a wider concept, covering all cross-border economic activity including establish-
ment (14). This interpretation is consistent with the fundamental objective of the EEA Agreement to
promote free movement of goods, services, persons and capital.

is not

According to settled case law the concept of ‘trade’ also encompasses cases where agreements or
practices affect the competitive structure of the market. Agreements and practices that affect the
competitive structure inside the EEA by eliminating or threatening to eliminate a competitor oper-
ating within the EEA may be subject to the EEA competition rules (15). When an undertaking is or
risks being eliminated the competitive structure within the EEA is affected and so are the economic
activities in which the undertaking is engaged.

The requirement that there must be an effect on trade ‘between the Contracting Parties’ implies that
there must be an impact on cross-border economic activity involving at least two EEA States. It is
not required that the agreement or practice affect trade between the whole of one EEA State and the
whole of another EEA State. Articles 53 and 54 may be applicable also in cases involving part of an
EEA State, provided that the effect on trade is appreciable (16).

(11) The concept of appreciability is dealt with in section 2.4 below.
(12) See in this respect Case 85/76, Hoffmann-La Roche, [1979] ECR p. 461, paragraph 126.
(13) Throughout these guidelines the term ‘products’ covers both goods and services.
(14) See Case 172/80, Züchner, [1981] ECR p. 2021, paragraph 18. See also 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.

(15) See e.g. Joined Cases T-24/93 and others, Compagnie maritime belge, [1996] ECR II-1201, paragraph 203, and para-

graph 23 of the judgment in Commercial Solvents cited in footnote 6.

(16) See e.g. Joined Cases T-213/95 and T-18/96, SCK and FNK, [1997] ECR II-1739, and sections 3.2.4 and 3.2.6

below.

C 291/50

EN

Official Journal of the European Union

30.11.2006

22.

The application of
the definition of relevant
geographic markets. Trade between EEA States may be affected also in cases where the relevant
market is national or sub-national (17).

the effect on trade criterion is independent of

2.3.

The notion ‘may affect’

23.

The function of the notion ‘may affect’ is to define the nature of the required impact on trade
between EEA States. According to the standard test developed by the Court of Justice of the Euro-
pean Communities, the notion ‘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 pattern of trade
between EEA States (18) (19). As mentioned in paragraph 20 above the Court of Justice of the Euro-
pean Communities has in addition developed a test based on whether or not the agreement or prac-
tice affects the competitive structure. In cases where the agreement or practice is liable to affect the
competitive structure inside the EEA, EEA law jurisdiction is established.

24.

The ‘pattern of trade’-test, as developed by the Court of Justice of the European Communities,
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 EEA States,

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

2.3.1. A sufficient degree of probability on the basis of a set of objective factors of law or fact

25.

26.

27.

The assessment of effect on trade 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 EEA States, for example because they have sought to hinder
exports to or imports from other EEA States, this is a relevant factor to be taken into account.

The words ‘may affect’ and the reference by the Court of Justice of the European Communities to ‘a
sufficient degree of probability’ imply that, in order for EEA law jurisdiction to be established, it is not
required that the agreement or practice will actually have or has had an effect on trade between
EEA States. It is sufficient that the agreement or practice is ‘capable’ of having such an effect (20).

There is no obligation or need to calculate the actual volume of trade between EEA States affected
by the agreement or practice. For example, in the case of agreements prohibiting exports to other
EEA States there is no need to estimate what would have been the level of parallel trade between
the EEA States concerned, in the absence of the agreement. This interpretation is consistent with the
jurisdictional nature of the effect on trade criterion. EEA 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.

(17) See section 3.2 below.
(18) See e.g. the judgment in Züchner cited in footnote 14 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.

(19) In some judgments mainly relating to vertical agreements the Court of Justice of the European Communities has
added wording to the effect that the agreement was capable of hindering the attainment of the objectives of a single
market between EC 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 footnote 14, and Case 56/65, Société Technique Minière, [1966]
ECR 337. The impact of an agreement on the functioning of the EEA Agreement is thus a factor which can be taken
into account.

(20) See e.g. Case E-7-01, Hegelstad Eiendomsselskap Arvid B. Hegelstad and others and Hydro Texaco AS, [2002] EFTA
Court Report p 310 and Case T-228/97, Irish Sugar, [1999] ECR II-2969, paragraph 170, and Case 19/77, Miller,
[1978] ECR 131, paragraph 15.

30.11.2006

EN

Official Journal of the European Union

C 291/51

28.

29.

30.

31.

32.

The assessment under the effect on trade criterion depends on a number of factors that individually
may not be decisive (21). 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 and importance of the
undertakings concerned (22).

The nature of the agreement and practice provides an indication from a qualitative point of view of
the ability of the agreement or practice to affect trade between EEA States. Some agreements and
practices are by their very nature capable of affecting trade between EEA States, whereas others
require more detailed analysis in this respect. Cross-border cartels are an example of the former,
whereas joint ventures confined to the territory of a single EEA State are an example of the latter.
This aspect is further examined in section 3 below, which deals with various categories of agree-
ments and practices.

The nature of the products covered by the agreements or practices also provides an indication of
whether trade between EEA 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 EEA States, EEA jurisdiction is more readily established than in cases where due
to their nature there is limited demand for products offered by suppliers from other EEA States or
where the products are of limited interest from the point of view of cross-border establishment or
the expansion of the economic activity carried out from such place of establishment (23). Establish-
ment includes the setting-up by undertakings in one EEA State of agencies, branches or subsidiaries
in another EEA State.

The market position of the undertakings concerned and their sales volumes are indicative from a
quantitative point of view of the ability of the agreement or practice concerned to affect trade
between EEA States. This aspect, which forms an integral part of the assessment of appreciability, is
addressed in section 2.4 below.

In addition to the factors already mentioned, it is necessary to take account of the legal and factual
environment in which the agreement or practice operates. The relevant economic and legal context
provides insight into the potential for an effect on trade between EEA States. If there are absolute
barriers to cross-border trade between EEA States, which are external to the agreement or practice,
trade is only capable of being affected if those barriers are likely to disappear in the foreseeable
future. In cases where the 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
hinder such activities. Agreements and practices that do so are capable of affecting trade between
EEA States.

2.3.2. An influence on the ‘pattern of trade’ between EEA States

33.

For Articles 53 and 54 to be applicable there must be an influence on the ‘pattern of trade’ between
EEA States.

34.

The term ‘pattern of trade’ is neutral. It is not a condition that trade be restricted or reduced (24).
Patterns of trade can also be affected when an agreement or practice causes an increase in trade.
Indeed, EEA law jurisdiction is established if trade between EEA States is likely to develop differently
with the agreement or practice compared to the way in which it would probably have developed in
the absence of the agreement or practice (25).

(21) See e.g. Case C-250/92, Gøttrup-Klim. [1994] ECR II-5641, paragraph 54.
(22) See e.g. Case C-306/96, Javico, [1998] ECR I-1983, paragraph 17, and paragraph 18 of the judgment in Béguelin

cited in footnote 7.

(23) Compare in this respect the judgments in Bagnasco and Wouters cited in footnote 14.
(24) See e.g. Case T-141/89, Tréfileurope, [1995] ECR II-791, Case T-29/92, Vereniging van Samenwerkende Prijsrege-
lende Organisaties in de Bouwnijverheid (SPO), [1995] ECR II-289, as far as exports were concerned, and Commis-
sion Decision in Volkswagen (II), OJ L 262, 2.10.2001, p. 14.

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

C 291/52

EN

Official Journal of the European Union

30.11.2006

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 EEA competition rules, from those agreements
and practices which do not.

2.3.3. 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 EEA States can be ‘direct or
indirect, actual or potential’.

37.

38.

39.

40.

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

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 economic activities of undertakings that use or otherwise rely on the products
covered by the agreement or practice (26). Such effects can, for 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 Justice of the European Communities has held
under the corresponding Article 81 of the EC Treaty that trade between EC 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 (27). Whereas the raw material was not exported, the final product —
cognac — was exported. In such cases EEA competition law is thus applicable, if trade in the final
product is capable of being appreciably affected.

Indirect effects on trade between EEA States may also occur in relation to the products covered by
the agreement or practice. For instance, agreements whereby a manufacturer limits warranties to
products sold by distributors within their EEA State of establishment create disincentives for consu-
mers from other EEA States to buy the products because they would not be able to invoke the
warranty (28). 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 (29).

Actual effects on trade between EEA 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 EEA
State, for instance one that prohibits exports to other EEA States, is likely to produce actual effects
on trade between EEA States. Without the agreement the distributor would have been free to
engage in export sales. It should be recalled, however, that it is not required that actual effects are
demonstrated. It is sufficient that the agreement or practice be 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 (30). Even if trade is not
capable of being affected at the time the agreement is concluded or the practice is implemented,
Articles 53 and 54 remain applicable if the factors which led to that conclusion are likely to change

(26) 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 footnote 15.

(27) See Case 123/83, BNIC v Clair, [1985] ECR 391, paragraph 29. See also EFTA Surveillance Authority Decision in

NSF, paragraph 79, footnote 7.

(28) See Commission Decision in Zanussi, OJ L 322, 16.11.1978, p. 36, paragraph 11.
(29) See in this respect Case 31/85, ETA Fabrique d'Ebauches, [1985] ECR 3933, paragraphs 12 and 13.
(30) 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.

30.11.2006

EN

Official Journal of the European Union

C 291/53

in the foreseeable future. In this respect it is relevant to consider the impact of liberalisation
measures taken into the EEA Agreement or adopted by the EEA State in question and other foresee-
able measures aiming at eliminating legal barriers to trade.

42. Moreover, even if at a given point in time market conditions are unfavourable to cross-border trade,
for example because prices are similar in the EEA States in question, trade may still be capable of
being affected if the situation may change as a result of changing market conditions (31). What
matters is the ability of the agreement or practice to affect trade between EEA States and not
whether at any given point in time it actually does so.

43.

The inclusion of indirect or potential effects in the analysis of effects on trade between EEA States
does not mean that the analysis can be based on remote or hypothetical effects. The likelihood of a
particular agreement to produce indirect or potential effects must be explained by the authority or
party claiming that trade between EEA States is capable of being appreciably affected. Hypothetical
or speculative effects are not sufficient for establishing EEA law jurisdiction. For instance, an agree-
ment that raises the price of a product which is not tradable reduces the disposable income of
consumers. As consumers have less money to spend they may purchase fewer products imported
from other EEA States. However, the link between such income effects and trade between EEA
States is generally in itself too remote to establish EEA law jurisdiction.

2.4.

The concept of appreciability

2.4.1. General principle

44.

45.

46.

The effect on trade criterion incorporates a quantitative element, limiting EEA law jurisdiction to
agreements and practices that are capable of having effects of a certain magnitude. Agreements and
practices fall outside the scope of application of Articles 53 and 54 when they affect the market
only insignificantly having regard to the weak position of the undertakings concerned on the
market for the products in question (32). Appreciability can be appraised in particular by reference
to the position and the importance of the relevant undertakings on the market for the products
concerned (33).

The assessment of appreciability depends on the circumstances of each individual case, in particular
the nature of the agreement and practice, the nature of the products covered and the market posi-
tion of the undertakings concerned. When by its very nature the agreement or practice is capable of
affecting trade between EEA States, the appreciability threshold is lower than in the case of agree-
ments and practices that are not by their very nature capable of affecting trade between EEA States.
The stronger the market position of the undertakings concerned, the more likely it is that an agree-
ment or practice capable of affecting trade between EEA States can be held to do so appreciably (34).

In a number of cases concerning imports and exports the Court of Justice of the European Commu-
nities has considered that the appreciability requirement was fulfilled when the sales of the under-
takings concerned accounted for about 5 % of the market (35). Market share alone, however, has not
always been considered the decisive factor. In particular, it is necessary also to take account of the
turnover of the undertakings in the products concerned (36).

(31) See paragraph 60 of the AEG judgment cited in the previous footnote.
(32) See Case 5/69, Völk, [1969] ECR 295, paragraph 7.
(33) See e.g. paragraph 17 of the judgment in Javico cited in footnote 22, and paragraph 138 of the judgment in BPB

Industries and British Gypsum cited in footnote 25.

(34) See paragraph 138 of the judgment in BPB Industries and British Gypsum cited in footnote 25.
(35) See e.g. paragraphs 9 and 10 of the Miller judgment cited in footnote 20, and paragraph 58 of the AEG judgment

cited in footnote 30.

(36) See Joined Cases 100/80 and others, Musique Diffusion Française, [1983] ECR p. 1825, paragraph 86. In that case
the products in question accounted for just above 3 % of sales on the national markets concerned. The Court of
Justice of the European Communities held that the agreements, which hindered parallel trade, were capable of appre-
ciably affecting trade between EC Member States due to the high turnover of the parties and the relative market posi-
tion of the products, compared to those of products produced by competing suppliers.

C 291/54

EN

Official Journal of the European Union

30.11.2006

47.

48.

49.

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 consis-
tent with the concept ‘may affect’, which implies that the assessment is based on the ability of the
agreement or practice to affect trade between EEA States rather than on the impact on actual flows
of goods and services across borders. The market position of the undertakings concerned and their
turnover in the products concerned are indicative of the ability of an agreement or practice to affect
trade between EEA States. These two elements are reflected in the presumptions set out in para-
graphs 52 and 53 below.

The application of the appreciability test does not necessarily require that relevant markets be
defined and market shares calculated (37). The sales of an undertaking in absolute terms may be suffi-
cient to support a finding that the impact on trade is appreciable. This is particularly so in the case
of agreements and practices that by their very nature are liable to affect trade between EEA States,
for example because they concern imports or exports or because they cover several EEA States. The
fact that in such circumstances turnover in the products covered by the agreement may be sufficient
for a finding of an appreciable effect on trade between EEA States is reflected in the positive
presumption set out in paragraph 53 below.

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 (38). Even if a single agreement or network of
agreements is not capable of appreciably affecting trade between EEA States, the effect of parallel
networks of agreements, taken as a whole, may be capable of doing so. For that to be the case,
however, it is necessary that the individual agreement or network of agreements makes a significant
contribution to the overall effect on trade (39).

2.4.2. Quantification of appreciability

50.

It is not possible to establish general quantitative rules covering all categories of agreements indi-
cating when trade between EEA States is capable of being appreciably affected. It is possible,
however, to 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 in the
meaning of Article 53(1) of the EEA Agreement (the de minimis rule) (40), the EFTA Surveillance
Authority has stated that agreements between small and medium-sized undertakings (SMEs), as
defined in the Authority's Decision No 112/96/COL of 11 September 1996 (41), are normally not
capable of affecting trade between EEA States. The reason for this presumption is the fact that the
activities of SMEs are normally local or at most regional in nature. However, SMEs may be subject
to EEA law jurisdiction in particular where they engage in cross-border economic activity. Secondly,
the Authority considers it appropriate to set out general principles indicating when trade is normally
not capable of being appreciably affected, i.e. a standard defining the absence of an appreciable
effect on trade between EEA States (the NAAT-rule). When applying Article 53, the Authority will
consider this standard as a negative rebuttable presumption applying to all agreements within the
meaning of Article 53(1) irrespective of the nature of the restrictions contained in the agreement,
including restrictions that have been identified as hardcore restrictions in acts corresponding to
Commission block exemption regulations referred to in Annex XIV to the EEA Agreement. In cases
where this presumption applies the Authority will normally not institute proceedings either upon
application or on its own initiative. Where the undertakings assume in good faith that an agreement
is covered by this negative presumption, the Authority will not impose fines.

(37) See in this respect paragraphs 179 and 231 of the Volkswagen judgment cited in footnote 16, and Case T-213/00,

CMA CGM and others, [2003] ECR I-, paragraphs 219 and 220.

(38) See e.g. Case T-7/93, Langnese-Iglo, [1995] ECR II-1533, paragraph 120.
(39) See paragraphs 140 and 141 of the judgment in Vereniging van Groothandelaren in Bloemkwekerijprodukten cited

in footnote 8. See also the judgment in Hegelstad cited in footnote 20.

(40) See EFTA Surveillance Authority Notice on agreements of minor importance, footnote 4, paragraph 3.
(41) This decision referred to the definition of small and medium size enterprises laid down in the European Commission
Recommendation 96/280/EC (OJ L 107, 30.4.1996, p. 4). With effect from 1.1.2005 this recommendation has been
replaced by Commission Recommendation 2003/361/EC concerning the definition of micro, small and medium-
sized enterprises, OJ L 124, 20.5.2003, p. 36, incorporated into the EEA Agreement by EEA Joint Committee Deci-
sion of 25 September 2004 No 131/2004 (OJ L 64, 10.3.2005, p. 67 and EEA Supplement to the OJ, 10.3.2005, p.
49).

30.11.2006

EN

Official Journal of the European Union

C 291/55

51. Without prejudice to paragraph 53 below, this negative definition 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 EEA States. A case by case analysis is necessary.

52.

The EFTA Surveillance Authority holds the view that in principle agreements are not capable of
appreciably affecting trade between EEA States when the following cumulative conditions are met:

(a) The aggregate market share of the parties on any relevant market within the EEA affected by the

agreement does not exceed 5 %, and

(b) In the case of horizontal agreements, the aggregate annual EEA turnover of the undertakings
concerned (42) in the products covered by the agreement does not exceed 40 million Euro. In
the case of agreements concerning the joint buying of products the relevant turnover shall be
the parties' combined purchases of the products covered by the agreement.

In the case of vertical agreements, the aggregate annual EEA turnover of the supplier in the
products covered by the agreement does not exceed 40 million Euro. In the case of licence
agreements the relevant turnover shall be the aggregate turnover of the licensees in the products
incorporating the licensed technology and the licensor's own turnover in such products. In cases
involving agreements concluded between a buyer and several suppliers the relevant turnover
shall be the buyer's combined purchases of the products covered by the agreements.

The Authority will apply the same presumption where during two successive calendar years the
above turnover threshold is not exceeded by more than 10 % and the above market threshold is not
exceeded by more than 2 percentage points. In cases where the agreement concerns an emerging
not yet existing market and where as a consequence the parties neither generate relevant turnover
nor accumulate any relevant market share, the Authority will not apply this presumption. 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.

53.

The EFTA Surveillance Authority will also hold the view that where an agreement by its very nature
is capable of affecting trade between EEA States, for example, because it concerns imports and
exports or covers several EEA States, there is a rebuttable positive presumption that such effects on
trade are appreciable when the turnover of the parties in the products covered by the agreement
calculated as indicated in paragraphs 52 and 54 exceeds 40 million Euro. In the case of agreements
that by their very nature are capable of affecting trade between EEA States it can also often be
presumed that such effects are appreciable when the market share of the parties exceeds the 5 %
threshold set out in the previous paragraph. However, this presumption does not apply where the
agreement covers only part of an EEA State (see paragraph 90 below).

54. With regard to the threshold of 40 million Euro (cf. paragraph 52 above), the turnover is calculated
on the basis of total EEA sales excluding tax during the previous financial year by the undertakings
concerned, of the products covered by the agreement (the contract products). Sales between entities
that form part of the same undertaking are excluded (43).

55.

In order to apply the market share threshold, it is necessary to determine the relevant market (44).
This consists of the relevant product market and the relevant geographic market. The market shares
are to be calculated on the basis of sales value data or, where appropriate, purchase value data. If
value data are not available, estimates based on other reliable market information, including volume
data, may be used.

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.

(42) The term ‘undertakings concerned’ shall include connected undertakings as defined in paragraph 12.2 of the EFTA

Surveillance Authority Notice on agreements of minor importance, see footnote 4 above.

(43) See the previous footnote.
(44) When defining the relevant market, reference should be had to the notice on the definition of the relevant market
for the purpose of competition law within the EEA (OJ L 200, 16.7.1998, p. 48 and EEA Supplement to the OJ No
28, 16.7.1998, p. 3).

C 291/56

EN

Official Journal of the European Union

30.11.2006

57.

Contracts that form part of the same overall business arrangement constitute a single agreement for
the purposes of the NAAT-rule (45). Undertakings cannot bring themselves inside these thresholds by
dividing up an agreement that forms a whole from an economic perspective.

3.

58.

59.

60.

THE APPLICATION OF THE ABOVE PRINCIPLES TO COMMON TYPES OF AGREEMENTS AND
ABUSES

The EFTA Surveillance Authority will apply the negative presumption set out in the preceding
section to all agreements, including agreements that by their very nature are capable of affecting
trade between EEA States as well as agreements that involve trade with undertakings located in third
countries (cf. section 3.3 below).

Outside the scope of negative presumption, the EFTA Surveillance Authority will take account of
qualitative elements relating to the nature of the agreement or practice and the nature of the
products that they concern (see paragraphs 29 and 30 above). The relevance of the nature of the
agreement is also reflected in the positive presumption set out in paragraph 53 above relating to
appreciability in the case of agreements that by their very nature are capable of affecting trade
between EEA States. With a view to providing additional guidance on the application of the effect
on trade concept it is therefore useful to consider various common types of agreements and prac-
tices.

In the following sections a primary distinction is drawn between agreements and practices that
cover several EEA States and agreements and practices that are confined to a single EEA State or to
part of a single EEA 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.

3.1. Agreements and abuse covering or implemented in several EEA States

61.

Agreements and practices covering or implemented in several EEA States are in almost all cases by
their very nature capable of affecting trade between EEA States. When the relevant turnover exceeds
the threshold set out in paragraph 53 above it will therefore in most cases not be necessary to
conduct a detailed analysis of whether trade between EEA States is capable of being affected.
However, in order to provide guidance also in these cases and to illustrate the principles developed
in section 2 above, it is useful to explain what are the factors that are normally used to support a
finding of EEA law jurisdiction.

3.1.1. Agreements concerning imports and exports

62.

Agreements between undertakings in two or more EEA States that concern imports and exports are
by their very nature capable of affecting trade between EEA States. Such agreements, irrespective of
whether they are restrictive of competition or not, have a direct impact on patterns of trade
between EEA States. In Kerpen & Kerpen, for 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 of the Euro-
pean Communities held that it was impossible to take the view that such an agreement was not
capable of (appreciably) affecting trade between EC Member States (46).

63.

This category includes agreements that impose restrictions on imports and exports, including restric-
tions on active and passive sales and resale by buyers to customers in other EEA States (47). In these
cases there is an inherent link between the alleged restriction of competition and the effect on trade,

(45) See also paragraph 14 above.
(46) See paragraph 8 of the judgment in Kerpen & Kerpen cited in footnote 18. It should be noted that the Court of
Justice of the European Communities does not refer to market share but to the share of French exports and to the
product volumes involved.

(47) See e.g. the judgment in Volkswagen cited in footnote 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.

30.11.2006

EN

Official Journal of the European Union

C 291/57

since the very purpose of the restriction is to prevent flows of goods and services between EEA
States, which would otherwise be possible. It is immaterial whether the parties to the agreement are
located in the same EEA State or in different EEA States.

3.1.2. Cartels covering several EEA States

64.

Cartel agreements such as those involving price fixing and market sharing covering several EEA
States are by their very nature capable of affecting trade between EEA States. Cross-border cartels
harmonise the conditions of competition and affect the interpenetration of trade by cementing tradi-
tional patterns of trade (48). When undertakings agree to allocate geographic territories, sales from
other areas into the allocated territories are capable of being eliminated or reduced. When undertak-
ings 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 undertakings concerned abstain from
expanding output and thereby from serving potential customers in other EEA States.

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

3.1.3. Horizontal cooperation agreements covering several EEA States

66.

This section covers various types of horizontal cooperation agreements. Horizontal cooperation
agreements may for instance take the form of agreements whereby two or more undertakings coop-
erate in the performance of a particular economic activity such as production and distribution (49).
Often such agreements are referred to as joint ventures. However, joint ventures that perform on a
lasting basis all the functions of an autonomous economic entity are covered by the Merger Regu-
lation (50). At the level of the EEA such full function joint ventures are not dealt with under Articles
53 and 54 of the EEA Agreement except in cases where Article 2(4) of the Merger Regulation is
applicable (51). This section therefore does not deal with full-function joint ventures. In the case of
non-full function joint ventures the joint entity does not operate as an autonomous supplier (or
buyer) on any market. It merely serves the parents, who themselves operate on the market (52).

67.

Joint ventures which engage in activities in two or more EEA States or which produce an output
that is sold by the parents in two or more EEA States affect the commercial activities of the parties
in those areas of the EEA. Such agreements are therefore normally by their very nature capable of
affecting trade between EEA States compared to the situation without the agreement (53). Patterns of
trade are affected when undertakings switch their activities to the joint venture or use it for the
purpose of establishing a new source of supply in the EEA.

(48) See e.g. Case T-142/89, Usines Gustave Boël, [1995] ECR II-867, paragraph 102.
(49) Horizontal cooperation agreements are dealt with in the EFTA Surveillance Authority Notice on Guidelines on the
applicability of Article 53 of the EEA Agreement to horizontal cooperation agreements (OJ C 266, 31.10.2002, p. 1
and EEA Supplement to the OJ No 55, 31.10.2002, p. 1). Those guidelines deal with the substantive competition
assessment of various types of agreements but do not deal with the effect on trade issue.

(50) See the act referred to in point 1 of Annex XIV to the EEA Agreement (Regulation (EEC) No 139/2004) on the
control of concentrations between undertakings (the EC Merger Regulation), OJ, L 24, 29.1.2004, p.1 (as incorpo-
rated into the EEA Agreement by EEA Joint Committee Decision No 78/2004 of 4 June 2004, OJ L 219, 19.6.2004,
p. 13 and EEA Supplement to the OJ No 32, 19.6.2004, p. 1).

(51) The Commission has issued a Notice on the concept of full-function joint ventures under the Merger Regulation, OJ
C 66, 2.3.1998, p. 1, which gives guidance on the scope of this concept. The EFTA Surveillance Authority has so
far not adopted any notices in the field of concentrations. However, the Authority applies the principles set out in
the Commission merger notices whenever relevant.

(52) See e.g. the Commission Decision in Ford/Volkswagen, OJ L 20, 28.1.1993, p. 14.
(53) See in this respect paragraph 146 of the Compagnie Générale Maritime judgment cited in footnote 26 above.

C 291/58

EN

Official Journal of the European Union

30.11.2006

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 EEA States, where the parents previously produced the input in other EEA States
or where the final product is traded in more than one EEA State.

69.

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

3.1.4. Vertical agreements implemented in several EEA States

70.

71.

Vertical agreements and networks of similar vertical agreements implemented in several EEA States
are normally capable of affecting trade between EEA States if they cause trade to be channelled in a
particular way. Networks of selective distribution agreements implemented in two or more EEA
States for example, channel trade in a particular way because they limit trade to members of the
network, thereby affecting patterns of trade compared to the situation without the agreement (54).

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

72.

Agreements between suppliers and distributors which provide for resale price maintenance (RPM)
and which cover two or more EEA States are normally also by their very nature capable of affecting
trade between EEA States (55). Such agreements alter the price levels that would have been likely to
exist in the absence of the agreements and thereby affect patterns of trade.

3.1.5. Abuses of dominant positions covering several EEA 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 whereby the dominant
undertaking exploits its 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 53(1), or through unilateral conduct, which as far as EEA competition law
is concerned is subject only to Article 54.

74.

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

75. When a dominant undertaking engages in exclusionary conduct in more than one EEA State, such
abuse is normally by its very nature capable of affecting trade between EEA States. Such conduct
has a negative impact on competition in an area extending beyond a single EEA 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 system are likely to purchase less from
competitors of the dominant firm than they would otherwise have done. Exclusionary conduct that
aims directly at eliminating a competitor such as predatory pricing is also capable of affecting trade

(54) See in this respect Joined Cases 43/82 and 63/82, VBVB and VBBB, [1984] ECR 19, paragraph 9.
(55) See in this respect Case T-66/89, Publishers Association, [1992] ECR II-1995.

30.11.2006

EN

Official Journal of the European Union

C 291/59

between EEA States because of its impact on the competitive market structure inside the EEA (56).
When a dominant firm engages in behaviour with a view to eliminating a competitor operating in
more than one EEA 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 EEA. Even if the targeted
undertaking is not eliminated, its future competitive conduct is likely to be affected, which may also
have an impact on trade between EEA States. Secondly, the abuse may have an impact on other
competitors. Through its abusive behaviour the 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 EEA States to be capable of being affected. This may
be the case even where the undertaking that risks being eliminated mainly engages in exports to
third countries (57). Once the effective competitive market structure inside the EEA risks being
further impaired, there is EEA law jurisdiction.

76. Where a dominant undertaking engages in exploitative or exclusionary abuse in more than one EEA
State, the capacity of the abuse to affect trade between EEA States will normally also by its very
nature be appreciable. Given the market position of the dominant undertaking concerned, and the
fact that the abuse is implemented in several EEA States, the scale of the abuse and its likely impact
on patterns of trade is normally such that trade between EEA States is capable of being appreciably
affected. In the case of an exploitative abuse such as price discrimination, the abuse alters the
competitive position of trading partners in several EEA States. In the case of exclusionary abuses,
including abuses that aim at eliminating a competitor, the economic activity engaged in by competi-
tors in several EEA States is affected. The very existence of a dominant position in several EEA
States implies that competition in a substantial part of the common market is already weakened (58).
When a dominant undertaking further weakens competition through recourse to abusive conduct,
for example by eliminating a competitor, the ability of the abuse to affect trade between EEA States
is normally appreciable.

3.2. Agreements and abuses covering a single, or only part of an, EEA State

77. When agreements or abusive practices cover the territory of a single EEA 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 EEA States. It should be recalled that for there to be an effect on trade between
EEA States it is not required that trade is reduced. It is sufficient that an appreciable change is
capable of being caused in the pattern of trade between EEA States. Nevertheless, in many cases
involving a single EEA 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 EEA States. The examples mentioned hereafter are not exhaustive.
They merely provide examples of cases where agreements confined to the territory of a single EEA
State can be considered capable of affecting trade between EEA States.

3.2.1. Cartels covering a single EEA State

78.

Horizontal cartels covering the whole of an EEA State are normally capable of affecting trade
between EEA States. The Community Courts have held in a number of cases that agreements
extending over the whole territory of an EC Member State by their very nature have the effect of
reinforcing the partitioning of markets on a national basis by hindering the economic penetration
which the EC Treaty is designed to bring about (59).

(56) See in this respect the judgment in Commercial Solvents cited in footnote 6, in the judgment in Hoffmann-La
Roche, cited in footnote 12, paragraph 125, and in RTE and ITP cited in footnote 30, as well as Case 6/72, Conti-
nental Can, [1973] ECR 215, paragraph 16, and Case 27/76, United Brands, [1978] ECR 207, paragraphs 197 to
203.

(57) See paragraphs 32 and 33 of the judgment in Commercial Solvents cited in footnote 7.
(58) 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 footnote 12.

(59) See for a recent example paragraph 95 of the Wouters judgment cited in footnote 14.

C 291/60

EN

Official Journal of the European Union

30.11.2006

79.

80.

81.

82.

The capacity of such agreements to partition the internal market follows from the fact that under-
takings participating in cartels in only one EEA State, normally need to take action to exclude
competitors from other EEA States (60). If they do not, and the product covered by the agreement is
tradable (61), the cartel risks being undermined by competition from undertakings from other EEA
States. Such agreements are normally also by their very nature capable of having an appreciable
effect on trade between EEA States, given the market coverage required for such cartels to be effec-
tive.

Given the fact that the effect on trade concept encompasses potential effects, it is not decisive
whether such action against competitors from other EEA States is in fact adopted at any given point
in time. If the cartel price is similar to the price prevailing in other EEA States, there may be no
immediate need for the members of the cartel to take action against competitors from other EEA
States. What matters is whether or not they are likely to do so, if market conditions change. The
likelihood of that depends on the existence or otherwise of natural barriers to trade in the market,
including in particular whether or not the product in question is tradable. In a case involving
certain retail banking services (62) the Court of Justice of the European Communities has, for
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
factor in the choice made by undertakings from other EC Member States regarding whether or not
to establish themselves in the EC Member State in question (63).

The extent to which the members of a cartel monitor prices and competitors from other EEA States
can provide an indication of the extent to which the products covered by the cartel are tradable.
Monitoring suggests that competition and competitors from other EEA 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 the light of the price level prevailing in other EEA States (limit
pricing), it is an indication that the products in question are tradable and that trade between EEA
States is capable of being affected.

Trade is normally also capable of being affected when the members of a national cartel temper the
competitive constraint imposed by competitors from other EEA States by inducing them to join the
restrictive agreement, or if their exclusion from the agreement places the competitors at a competi-
tive disadvantage (64). 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 the agreement hampers the operations of compe-
titors from other EEA States on the national market in question. The same is true when a cartel
agreement confined to a single EEA State is concluded between undertakings that resell products
imported from other EEA States (65).

3.2.2. Horizontal cooperation agreements covering a single EEA State

83.

Horizontal cooperation agreements and in particular non-full function joint ventures (cf. paragraph
66 above), which are confined to a single EEA State and which do not directly relate to imports and
exports, do not belong to the category of agreements that by their very nature are capable of
affecting trade between EEA States. A careful examination of the capacity of the individual agree-
ment to affect trade between EEA States may therefore be required.

84.

Horizontal cooperation agreements may, in particular, be capable of affecting trade between EEA
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

(60) See e.g. Case 246/86, Belasco, [1989] ECR 2117, paragraph 32-38.
(61) See paragraph 34 of the Belasco judgment cited in the previous footnote 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 footnote 14.

(62) Guarantees for current account credit facilities.
(63) See paragraph 51 of the Bagnasco judgment cited in footnote 14.
(64) 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 footnote 25,
where the Court of Justice of the European Communities stressed that the agreement in question reduced appreci-
ably the incentive to sell imported products.

(65) See e.g. the judgment in Stichting Sigarettenindustrie, cited in footnote 18, paragraphs 49 and 50.

30.11.2006

EN

Official Journal of the European Union

C 291/61

EEA States or which are more easily fulfilled by undertakings from the EEA State in question due to
the fact that they are based on national rules and traditions. In such circumstances the agreements
make it more difficult for undertakings from other EEA States to penetrate the national market.

85.

Trade may also be affected where a joint venture results in undertakings from other EEA States
being cut off from an important channel of distribution or source of demand. If, for example, two
or more distributors established within the same EEA State, and which account for a substantial
share of imports of the products in question, establish a purchasing joint venture combining their
purchases of that product, the resulting reduction in the number of distribution channels limits the
possibility for suppliers from other EEA States of gaining access to the national market in question.
Trade is therefore capable of being affected (66). Trade may also be affected where undertakings
which 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 EEA States compared to the situation before the agreement.

3.2.3. Vertical agreements covering a single EEA State

86.

87.

88.

Vertical agreements covering the whole of an EEA State may, in particular, be capable of affecting
patterns of trade between EEA States when they make it more difficult for undertakings from other
EEA States to penetrate the national market in question, either by means of exports or by means of
establishment (foreclosure effect). When vertical agreements give rise to such foreclosure effects,
they contribute to the partitioning of markets on a national basis, thereby hindering the economic
interpenetration which the EEA Agreement is designed to bring about (67).

Foreclosure may, for example, occur when suppliers impose exclusive purchasing obligations on
buyers (68). In Delimitis (69), 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,
the Court of Justice of the European Communities 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 used as an indicator in this respect. In making the assess-
ment account must be taken not only of the particular agreement or network of agreements in ques-
tion, but also of other parallel networks of agreements having similar effects (70).

Vertical agreements which cover the whole of an EEA State and which relate to tradable products
may also be capable of affecting trade between EEA 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 EEA States by increasing imports from other EEA States and by
decreasing exports from the EEA State in question (71). 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 EEA States this price level is only sustainable if
imports from other EEA States can be controlled.

3.2.4. Agreements covering only part of an EEA State

89.

In qualitative terms the assessment of agreements covering only part of an EEA State is approached
in the same way as in the case of agreements covering the whole of an EEA State. This means that
the analysis in section 2 applies. In the assessment of appreciability, however, the two categories
must be distinguished, as it must be taken into account that only part of an EEA State is covered by
the agreement. It must also be taken into account what proportion of the national territory is

(66) See in this respect Case T-22/97, Kesko, [1999] ECR II-3775, paragraph 109.
(67) See e.g. Case T-65/98, Van den Bergh Foods, [2003] ECR II-, and the judgment in Langnese-Iglo, cited in footnote

38 paragraph 120.

(68) See e.g. judgment of 7.12.2000, Case C-214/99, Neste, [2000] ECR I-11121.
(69) See judgment of 28.2.1991, Case C-234/89, Delimitis, [1991] ECR I-935.
(70) See paragraph 120 of the Langnese-Iglo judgment cited in footnote 38. See also the judgment in Hegelstad cited in

footnote 20.

(71) See e.g. Commission Decision in Volkswagen (II), cited in footnote 24, paragraphs 81 et seq.

C 291/62

EN

Official Journal of the European Union

30.11.2006

susceptible to trade. If, for example, transport costs or the operating radius of equipment render it
economically unviable for undertakings from other EEA States to serve the entire territory of
another EEA State, trade is capable of being affected if the agreement forecloses access to the part of
the territory of an EEA State that is susceptible to trade, provided that this part is not insignifi-
cant (72).

90. Where an agreement forecloses access to a regional market, then for trade to be appreciably
affected, the volume of sales affected must be significant in proportion to the overall volume of
sales of the products concerned inside the EEA State in question. This assessment cannot be based
merely on geographic coverage. The market share of the parties to the agreement must also be
given fairly limited weight. Even if the parties have a high market share in a properly defined
regional market, the size of that market in terms of volume may still be insignificant when
compared to total sales of the products concerned within the EEA State in question. In general, the
best indicator of the capacity of the agreement to (appreciably) affect trade between EEA States is
therefore considered to be the share of the national market in terms of volume that is being fore-
closed. Agreements covering areas with a high concentration of demand will thus weigh more
heavily than those covering areas where demand is less concentrated. For EEA jurisdiction to be
established the share of the national market that is being foreclosed must be significant.

91.

92.

Agreements that are local in nature are in themselves not capable of appreciably affecting trade
between EEA States. This is the case even if the local market is located in a border region. Conver-
sely, if the foreclosed share of the national market is significant, trade is capable of being affected
even where the market in question is not located in a border region.

In cases in this category some guidance may be derived from the case law concerning the concept
in the corresponding Article 82 of the EC Treaty of a substantial part of the common market (73).
Agreements that, for example, have the effect of hindering competitors from other EEA States from
gaining access to part of an EEA State, which constitutes a substantial part of the EEA, should be
considered to have an appreciable effect on trade between EEA States.

3.2.5. Abuses of dominant positions covering a single EEA State

93. Where an undertaking, which holds a dominant position covering the whole of an EEA State
engages in exclusionary abuses, trade between EEA States is normally capable of being affected.
Such abusive conduct will generally make it more difficult for competitors from other EEA States to
penetrate the market,
In
Michelin (75), for example, the Court of Justice of the European Communities held that a system of
loyalty rebates foreclosed competitors from other EC Member States and therefore affected trade
within the meaning of Article 82 of the EC Treaty. In Rennet (76) the Court of Justice similarly held
that an abuse in the form of an exclusive purchasing obligation on customers foreclosed products
from other EC Member States.

trade are capable of being affected (74).

in which case patterns of

94.

Exclusionary abuses that affect the competitive market structure inside an EEA State, for instance by
eliminating or threatening to eliminate a competitor, may also be capable of affecting trade between
EEA States. Where the undertaking that risks being eliminated only operates in a single EEA State,
the abuse will normally not affect trade between EEA States. However, trade between EEA States is
capable of being affected where the targeted undertaking exports to or imports from other EEA
States (77) and where it also operates in other EEA States (78). An effect on trade may arise from the
dissuasive impact of the abuse on other competitors. If through repeated conduct the dominant

(72) See in this respect paragraphs 177 to 181 of the judgment in SCK and FNK cited in footnote 16.
(73) See as to this notion the judgment in Ambulanz Glöckner, cited in footnote 14, 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.

(74) See e.g. paragraph 135 of the judgment in BPB Industries and British Gypsum cited in footnote 25.
(75) See Case 322/81, Nederlandse Banden Industrie Michelin, [1983] ECR 3461
(76) See Case 61/80, Coöperative Stremsel- en Kleurselfabriek, [1981] ECR 851, paragraph 15.
(77) See in this respect judgment in Irish Sugar, cited in footnote 20 paragraph 169.
(78) See paragraph 70 of the judgment in RTE (Magill) cited in footnote 30.

30.11.2006

EN

Official Journal of the European Union

C 291/63

undertaking has acquired a reputation for adopting exclusionary practices towards competitors that
attempt to engage in direct competition, competitors from other EEA 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 EEA State.

95.

96.

In the case of exploitative abuses such as price discrimination and excessive pricing, the situation
may be more complex. Price discrimination between domestic customers will normally not affect
trade between EEA 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 (79).
Practices consisting of offering lower prices to customers that are the most likely to import products
from other EEA States may make it more difficult for competitors from other EEA States to enter
the market. In such cases trade between EEA States is capable of being affected.

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

3.2.6. Abuse of a dominant position covering only part of an EEA State

97. Where a dominant position covers only part of an EEA State some guidance may, as in the case of
agreements, be derived from the condition in Article 54 that the dominant position must cover a
substantial part of the EEA. If the dominant position covers part of an EEA State that constitutes a
substantial part of the EEA and the abuse makes it more difficult for competitors from other EEA
States to gain access to the market where the undertaking is dominant, trade between EEA States
must normally be considered capable of being appreciably affected.

98.

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 an EEA State may,
depending on their importance, constitute a substantial part of the EEA (80). 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 infrastructures such as airports and ports are important in
providing cross-border services, trade between EEA States is capable of being affected.

99.

As in the case of dominant positions covering the whole of an EEA State (cf. paragraph 95 above),
trade may not be capable of being appreciably affected if the abuse is purely local in nature or
involves only an insignificant share of the sales of the dominant undertaking.

(79) See the judgment in Irish Sugar cited in footnote 20.
(80) See e.g. the case law cited in footnote 73.

C 291/64

EN

Official Journal of the European Union

30.11.2006

3.3. Agreements and abuses involving imports and exports with undertakings located in third

countries, and agreements and practices involving undertakings located in third countries

3.3.1. General remarks

100. Articles 53 and 54 of the EEA Agreement apply to agreements and practices that are capable of
affecting trade between EEA States even if one or more of the parties are located outside the
EEA (81). Articles 53 and 54 apply irrespective of where the undertakings are located or where the
agreement has been concluded, provided that the agreement or practice is either implemented
inside the EEA (82), or produce effects inside the EEA (83). Articles 53 and 54 may also apply to
agreements and practices that cover third countries, provided that they are capable of affecting trade
between EEA States. The general principle set out in section 2 above according to which the agree-
ment or practice must be capable of having an appreciable influence, direct or indirect, actual or
potential, on the pattern of trade between EEA 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.

101.

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

102.

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 (84).

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

3.3.2. Arrangements that have as their object the restriction of competition inside the EEA

104.

In the case of imports, this category includes agreements that bring about an isolation of the terri-
tory covered by the EEA Agreement (85). This is, for instance, the case of agreements whereby
competitors in the EEA and in third countries share markets, e.g. by agreeing not to sell in each
other's home markets or by concluding reciprocal (exclusive) distribution agreements (86).

105.

In the case of exports, this category includes cases where undertakings that compete in two or more
EEA States agree to export certain (surplus) quantities to third countries with a view to co-ordi-
nating their market conduct inside the EEA. Such export agreements serve to reduce price competi-
tion by limiting output inside the EEA, thereby affecting trade between EEA States. Without the
export agreement these quantities might have been sold inside the EEA (87).

(81) See in this respect Case 28/77, Tepea, [1978] ECR 1391, paragraph 48, and paragraph 16 of the judgment in Conti-

nental Can cited in footnote 56.

(82) See Joined Cases C-89/85 and others, Ahlström Osakeyhtiö (Woodpulp), [1988] ECR 651, paragraph 16.
(83) See in this respect Case T-102/96, Gencor, [1999] ECR II-753, which applies the effects test in the field of mergers.
(84) See to that effect paragraph 19 of the judgment in Javico cited in footnote 22.
(85) See in this respect Case 51/75, EMI v CBS, [1976] ECR 811, paragraphs 28 and 29.
(86) See Commission Decision in Siemens/Fanuc, OJ L 376, 31.12.1985, p. 29.
(87) 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.

30.11.2006

EN

Official Journal of the European Union

C 291/65

3.3.3. Other arrangements

106.

107.

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

In this regard it is relevant to examine the effects of the agreement or practice on customers and
other operators inside the EEA that rely on the products of the undertakings that are parties to the
agreement or practice (88). In Compagnie maritime belge (89), which concerned agreements between
shipping companies operating between Community ports and West African ports, the agreements
were held to be capable of indirectly affecting trade between EC Member States because they altered
the catchment areas of the Community ports covered by the agreements and 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.

108. Trade may also be capable of being affected when the agreement prevents re-imports into the EEA.
This may, for example, be the case with vertical agreements between EEA suppliers and third
country distributors, imposing restrictions on resale outside an allocated territory,
including the
EEA. If in the absence of the agreement resale to the EEA would be possible and likely, such
imports may be capable of affecting patterns of trade inside the EEA (90).

109. However, for such effects to be likely, there must be an appreciable difference between the prices of
the products charged in the EEA and those charged outside the EEA, 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 EEA market must not be
insignificant (91). If these product volumes are insignificant compared to those sold inside the EEA,
the impact of any re-importation on trade between EEA 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 suppliers. It may be, for example, that the product 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 EEA States. It should be recalled, however (cf. paragraph 49 above), that the indivi-
dual agreement or network of agreements must make a significant contribution to the overall effect
on trade.

(88) See paragraph 22 of the judgment in Javico cited in footnote 22.
(89) See paragraph 203 of the judgment in Compagnie maritime belge cited in footnote 15.
(90) See in this respect the judgment in Javico cited in footnote 22.
(91) See in this respect paragraphs 24 to 26 of the Javico judgment cited in footnote 22.