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30 . 1 . 97 | EN 1 Official Journal of the European Communities No C 29 / 3

NOTICE OF THE COMMISSION

relating to the revision of the notice of 3 September 1986 on agreements of minor importance

which are not caught by the provisions of Article 85 ( 1 ) of the EC Treaty

( 97 / C 29 / 03 )

( Text with EEA relevance )

The Commission invites all interested parties to submit
their written observations on the following draft of a
revised notice on agreements of minor importance .
Observations should be sent in the two months following
the date of the present publication to the following
address :

European Commission,
Directorate - General for Competition,
Unit IV / A / 2 — Legal Questions and Legislation,
Cort . 150 3 / 62,
Rue de la Loi / Wetstraat 200,
B-1049 Brussels .

Internet address : Nelly.Depessemier@dg4.cec.be

EXPLANATORY NOTE

( 1 ) The Commission proposes amending the notice on

agreements of minor importance which are not
caught by Article 85 ( 1 ) of the EC Treaty ('). The
Commission is thereby pursuing three objectives :

— to enhance the legal clarity of the text in order

to facilitate its application and to improve the
legal certainty enjoyed by undertakings,

— to adapt the text to the current state of devel ­

opment of Community law in relation to
restrictions of competition, and to make it more
realistic from an economic point of view,

— to avoid imposing unnecessary administrative
burdens on undertakings and on the services of
the Commission due to requests and notifi ­
cations of agreements which manifestly could
not exert any appreciable influence on intra ­
community trade or on competition .

Altogether, this Notice contributes to the definition
of a competition policy concentrating on the most
important cases for the Community and lightens the
constraints on undertakings and in particular on
small and medium enterprises ( SMEs ).

( 2 ) In order to meet the first of these objectives, the

Commission, basing itself on the case-law of the
Court of Justice and the Court of First Instance of
the European Communities, has attempted to
define certain categories of agreements which can
be said with a sufficient degree of probability not to
be covered by the provisions of Article 85 ( 1 ).
Amongst these are, first, agreements which are not
likely to affect significantly the trade between
Member States . These do not come under
Community law but under national competition
legislation . This is also the case for agreements
whose actual or potential effect remains limited to
the territory of only one Member State or which
influence intracommunity trade only marginally .
Agreements which, whilst being likely to affect
significantly the trade between Member States, have
neither as their object nor their effect any ap ­
preciable restriction of competition, also escape the
prohibition .

( 3 ) According to well-established case-law ( 2 ), the
criterion of effect on trade in the competition rules
serves to delineate the scope of Community law, as
against national legislation . To come within the
ambit of Article 85, an agreement must be likely to
have an effect on the freedom of trade between
Member States whether directly or indirectly,
actually or potentially, in a way which could
damage the realization of the objectives of the
single market, in particular by partitioning national
markets or by the modification of competitive
structures within the Community . Agreements made
between undertakings established in different
Member States restricting competition will usually
meet this condition ( 5 ). Such is also the case for

( 2 ) Consten and Grundig, Joined Cases 56 and 58 / 64, [ 1966 ]

ECR 299, p. 341 ; Hugin, Case 22 / 78, [ 1979 ] ECR 1869,
p. 1898 .
( 3 ) See for example the decisions in " Whisky and Gin ', OJ No L

(') OJ No C 231, 12 . 9 . 1986, p . 2 and No C 368, 23 . 12 . 1994, 369, 31 . 12 . 1985, p. 19 : Boussois / Interpane, OJ No L 50,

p . 20 . 19 . 2 . 1987, p. 30 .

p . 20 .

No C 29 / 4 fÉNl Official Journal of the European Communities 30 . 1 . 97

agreements made between undertakings established
in only one Member State, where those agreements
concern intracommunity imports or exports from
that State ( 4 ) or activities in several Member
States ( 5 ). Even so-called ' national ' agreements, in
which only the undertakings of one Member State
participate and which were created with the sole
aim of regulating the production or the marketing
of products in that Member State, are covered by
Article 85 ( 1 ) when they cover the whole or the
greater part of the national territory, because they
grant an artificial protection to national industry
and therefore impede the economic inter ­
penetration envisaged in the Treaty ( 6 ). Agreements
concerning trade with third countries are not
subject to the competence of the Commission by
virtue of Article 85 ( 1 ) except in so far as they
produce effects on intracommunity trade ( 7 ).

( 4 ) It is necessary to determine, moreover, whether an

agreement can affect trade between Member States
to any appreciable extent ( 8 ). When the agreement
has neither as its object nor as its effect a significant
restriction of competition, the reply will be
negative . For other cases, the reply will depend on
the individual circumstances of each case in
question and does not really lend itself to affording
a quantified benchmark which is both precise and
suitable for general application . The Commission
thus considers that it is preferable to base the new

de minimis notice solely on the criterion of ap ­
preciable effect on competition, contrary to the
previous notice .

( 5 ) The meaning of ' appreciable effect ' on competition

is defined using quantitative criteria, as in the
current Notice . However, the new text no longer
contains a turnover threshold of the parties ( ECU
300 million in the previous notice ). It seems un ­
justifiable to reserve the benefits of a de minimis

( 4 ) See for example, Miller, Case 19 / 77, [ 1977 ] ECR 131,
p. 148 ; Zuchner, Case 172 / 80, [ 1981 ] ECR 2021, p. 2032 ;
Tippex, Case C-279 / 87, [ 1990 ] ECR 1-261 .
( 5 ) See for example the decisions in Carbon Gas Technologie,

OJ No L 376, 31 . 12 . 1983, p. 17 : X v Open Group, OJ No
L 35, 6 . 2 . 1987, p. 36, and VBVB and VBBB, Joined Cases
43 and 63 / 82, [ 1984 ] ECR 19, p. 66 .
( 6 ) Cementhandelaren, Case 8 / 72, [ 1972 ] ECR 977, p . 991 ;
Papiers Peints de Belgique, Case 73 / 74, [ 1975 ] ECR p 1491,
p . 1514 ; Belasco, Case 246 / 86, [ 1989 ] ECR 2117, p . 2189 .
O Beguelin, Case 22 / 71, [ 1971 ] ECR 949, p. 959 ; EMI
Records v CBS, Cases 51 / 75, 86 / 75 and 96 / 75, [ 1976 ] ECR
811, p. 850, 871, p. 908 and 913, p. 951 ; Tepea, Case 28 / 77,

[ 1978 ] ECR 1991, p. 1415 .

notice to only small and medium sized enterprises .
The case-law does not require this . The Court of
Justice infers from the very weak position of the

parties on the relevant markets ( 9 ) that there is no
appreciable effect on competition . From now
onwards, even large undertakings should be able to
benefit from the application of the notice, provided
that their market shares remain insignificant . In
order to ensure effective and undistorted

competition, it is sufficient for the Commission to
be able to investigate agreements made by large
undertakings once they reach the market-share
thresholds stated at points 9 and 10 of the proposal .

( 6 ) In this respect, the new text makes a clear
distinction between horizontal agreements and
vertical agreements . It is generally accepted that the
first, rather than the second, pose greater threats
and risks for competition in the internal market .
Vertical agreements are dangerous only where they
significantly impede the access of third under ­
takings to markets or sources of supply, thereby
contributing to the isolation of markets or to
making their competitive structure more rigid .
Moreover, the restrictive effects of vertical
agreements often constitute a factor of minor
importance compared to the positive influence
which such contracts may have on the development
of dynamic competition in a single market . The
appreciability threshold therefore has to be set at a
considerably higher level than that for horizontal
agreements . The Commission proposes to fix it, in
terms of market shares, at 10 %, retaining the
current threshold of 5 % for horizontal agreements .

( 7 ) A notice translating the legal concept of appreciable

restriction into quantitative thresholds cannot,
however, be of anything more than indicative value .
It could not be claimed that it covers all agreements
which are not caught by the prohibition on
agreements by reason of their minor importance .
On the one hand, some agreements between under ­
takings whose market share passes the thresholds
indicated in points 9 and 10 of the draft do not
significantly affect competition . On the other, it
cannot be ruled out that agreements which are
within the thresholds may still fall under Article

85 ( 1 ) ( 10 ). This is so in the case of certain hori ­

(') See Vólk, Case 5 / 69, [ 1969 ] ECR 295, p . 302 ; Cadillon v

[ 1978 ] ECR 1991, p. 1415 . Hóss, Case 1 / 71, [ 1971 ] ECR 351, p . 356 .

( 8 ) Béguelin, op cit ; Miller, op cit ; Salonia v Poidomani, Case ( 10 ) In this respect see Miller, op cit ;

126 / 80, [ 1981 ] ECR 1563, p . 1579 ; Erauw-Jacquery v La
Hesbignonne, Case 27 / 87, [ 1988 ] ECR 1919, p . 1950 .

( 10 ) In this respect see Miller, op cit ; Musique Diffusion
Française, Joined Cases 100 to 103 / 80, [ 1983 ] ECR 1825,
p . 1900 ; Hasselblad, Case 86 / 82, [ 1984 ] ECR 883, p . 901 .

30 . 1 . 97 | EN | Official Journal of the European Communities No C 29 / 5

zontal or vertical agreements which include prejudice the future development of the decision ­
particularly serious restrictions on competition making practice in the area .
within the meaning of Article 85 ( 1 ) — that is,

agreements which have as their object price-fixing
or production or sales quotas, market-sharing or
sharing of sources of supply . Those agreements are
expressly mentioned at point 11 of the draft, in
order to give undertakings some guidelines for their
commercial policy . The Commission must reserve
to itself the option of intervening in the abovemen ­
tioned cases even if the market-share thresholds are

not exceeded . It will, however, limit its intervention
in this area to exceptional cases of true Community
interest, and especially to agreements which hinder
the successful operation of the internal market .

( 8 ) The draft also reiterates at point 3 that this Notice

does not contain an exhaustive description of
restrictions not caught by Article 85 ( 1 ). It must be
consistent with other interpretative notices of the
Commission, mentioned in point 1 of the draft . It
must also take into account the established practice
under which even agreements of ' major importance '
can fall outside the prohibition by virtue of their
favourable effect on competition . The Commission
had already adopted this more economic approach
in its 1968 Notice on co-operation between under ­
takings (") and had continued using this idea in
individual negative clearance decisions ("), and also
in its notice of 1993 on the assessment of coop ­
erative joint ventures ("). The Court of Justice,
motivated by the same idea, has recognized that
contractual clauses which, when examined in
isolation, constitute by their very nature restrictions
on competition, cannot be caught by Article 85 ( 1 )
when they are seen in the framework of a
pro-competitive agreement . This principle has been
applied inter alia to territorial restrictions in
exclusive distribution agreements ( 14 ), and in
licensing agreements ( 15 ), non-competition clauses
in business sale agreements ( 16 ), and also to
exclusive purchasing obligations in distribution
agreements ( 17 ). This Notice does not in any way

( 9 ) Particular attention has been paid to SMEs .
Experience acquired over the years in the exam ­
ination of individual cases has shown that
agreements made between small and medium-sized
undertakings are rarely capable of significantly
affecting both trade between Member States and
competition within the common market, even if
they are above the market-share thresholds set out
in points 9 and 10 of the draft . Where they fall
within Article 85 ( 1 ), they are generally not of
sufficient Community interest to justify any inter ­
vention . The particular situation of the SMEs is
taken into consideration in Chapter III of the
Notice . The text of this Chapter resumes the new
definition of SMEs . It thus constitutes the first step
towards putting the recommendation of the
Commission of 3 April 1996 ( 18 ) in the field of
competition policy into effect . The Commission
bases itself on the principle of non-intervention in
those agreements where only SMEs participate .
However, this text envisages two exceptions . They
concern, on the one hand, agreements covering a
substantial part of the relevant market and seriously
restricting competition, and on the other hand
those situations where networks of parallel
agreements threaten to rigidify market structures .
In those two situations, the Commission must be
able to intervene, as it has already had occasion to
do ( 19 ), to ensure the maintenance of effective
competition .

licensing agreements ( 15 ), non-competition clauses ( 10 ) The new text also envisages some technical
in business sale agreements ( 16 ), and also to amendments . In addition to mentioning Council
exclusive purchasing obligations in distribution Regulation No 17 ( First Regulation applying
agreements ( 17 ). This Notice does not in any way Articles 85 and 86 ) point 4 also mentions the

Council Regulations which lay down the
procedures for the application of competition law in
the three transport sectors . Points 8 and 17 of the
draft confirm that this Notice will not preclude the
(") OJ No C 75, 29 . 7 . 1968, p. 3, point II.5 ; corrected at OJ application of the national law of the Member

No C 84, 28 . 8 . 1968, p. 14 .
( 12 ) See the decisions Alliance de Constructeurs français de

machines-outils, OJ No L 201, 12 . 8 . 1968, p . 1 ; SAFCO,
OJ No L 13, 17 . 1 . 1972, p . 44 .
(,J ) OJ No C 43, 16 . 2 . 1993, p . 2, point 42 .
( 14 ) Société technique minière, Case 56 / 65, [ 1966 ] ECR 235, (") OJ No L 107, 30 . 4 . 1996, p . 4 .

Yolk op cit .
( 15 ) Nungesser ( Maize seeds ), Case 258 / 78, [ 1982 ] ECR 2015,

p . 2069 ; Coditel II, case 262 / 81, [ 1982 ] ECR p . 3381 .

O Remia, Case 42 / 84, [ 1985 ] ECR 2545, p . 2571 .
( 17 ) Delimitis, Case C-234 / 89, [ 1991 ] ECR 1-935 ; Langnese ­
Iglo, Case T-7 / 93, [ 1995 ] ECR 11-1533 ; Schòller, Case
T-9 / 93, [ 1995 ] ECR 11-1611 .

(") See decisions APB, OJ No L 18, 23 . 1 . 1990, p. 35, CNSD,

OJ No L 203, 13 . 8 . 1993, p. 27 and COAPI, OJ No L 122,
2 . 6 . 1995, p. 37, in which the Commission condemned
agreements aiming variously to share markets and to fix
prices . These agreements involve the liberal professions
( pharmacists, customs clearance agents, intellectual property
agents ); the agreements were organised by decisions of the
relevant professional associations .

No C 29 / 6 | EN 1 Official Journal of the European Communities 30 . 1 . 97

States . The definition of the relevant market ( point notifications provided for in Council Regulation
13 to 16 ) has been harmonized with the provisions No 17 ( 20 ).
of Form A / B, annexed to Commission Regulation
( EC ) No 3385 / 94 of 21 December 1994 on the
form, content and other details of applications and ( 20 ) OJ No L 377, 31 . 12 . 1994, p. 28 .

ANNEX

Draft notice on agreements of minor importance which do not fall under Article 85 ( 1 ) of the Treaty

establishing the European Community (')

I.

1 . The Commission considers it important to facilitate cooperation between undertakings where such

cooperation is economically desirable without presenting difficulties from the point of view of
competition policy . To this end, it published the ' Notice concerning agreements, decisions and
concerted practices in the field of cooperation between enterprises ' ( 2 ) listing a number of agreements
that by their nature cannot be regarded as being in restraint of competition . Furthermore, in the Notice
concerning its assessment of certain subcontracting agreements ( 3 ) the Commission considered that that
type of contract, which offers opportunities for development to all undertakings, does not auto ­
matically fall within the scope of Article 85 ( 1 ). The Notice concerning the assessment of cooperative
joint ventures pursuant to Article 85 of the EEC Treaty ( 4 ) describes in detail the conditions under
which the agreements in question do not fall under the prohibition of restrictive agreements . By issuing
this Notice, the Commission is taking a further step towards defining the scope of Article 85 ( 1 ), in
order to facilitate cooperation between undertakings .

2 . Article 85 ( 1 ) prohibits agreements which may affect trade between Member States and which have as

their object or effect the prevention, restriction or distortion of competition within the common
market . The Court of Justice has clarified that this provision is not applicable where the impact of the
agreement on intracommunity trade or on competition is not appreciable . Agreements which are not
capable of significantly affecting trade between Member States are not caught by Article 85 . They
should therefore be examined on the basis, and within the framework, of national legislation alone .
This is also the case for agreements whose actual or potential effect remains limited to the territory of
only one Member State or of one or more third countries . Likewise, agreements which do not have as
their object or their effect an appreciable restriction of competition are not caught by the prohibition
contained in Article 85 ( 1 ). For the purposes of the Notice, the minor importance of an agreement is
defined solely in relation to the concept of restriction of competition and not in relation to that of
trade between Member States .

3 . In this Notice the Commission, by setting quantitative criteria and by explaining their application, has

given a sufficiently concrete meaning to the term ' appreciable ' for undertakings to be able to judge for
themselves whether their agreements do not fall within the scope of Article 85 ( 1 ) by virtue of their
minor importance . The quantitative definition of ' appreciable restriction ' of competition is however, no
absolute yardstick ; in fact, in individual cases even agreements between undertakings which exceed the
limits indicated below may still have only a negligible effect on competition and are therefore not
caught by Article 85 ( 1 ). This Notice does not contain an exhaustive description of restrictions which
fall outside Article 85 ( 1 ). It remains the case that even agreements which are not of minor importance
can escape the prohibition on agreements on account of their exclusively favourable impact on
competition .

(') This Notice replaces the Commission Notice of 3 September 1986 ( OJ No C 231, 12 . 9 . 1986, p. 2 ).
( J ) OJ No C 75, 29 . 7 . 1968, p. 3, as corrected in OJ No C 84, 28 . 8 . 1968, p. 14 .
(') OJ No C 1, 3 . 1 . 1979, p . 2 .
( 4 ) OJ No C 43, 16 . 2 . 1993, p . 3 .

30 . 1 . 97 fEN | Official Journal of the European Communities No C 29 / 7

4 . The indications provided by the Commission should eliminate the need to have the legal status of

agreements covered by the Notice established through individual Commission decisions ; notification
for this purpose will no longer be necessary for such agreements . However, if it is doubtful whether,, in
an individual case, an agreement is likely to affect trade between Member States or to restrict
competition to any significant extent, undertakings are free to apply for negative clearance or to notify
the agreement pursuant to Council Regulations No 17 ( 5 ), No 1017 / 68 ('), No 4056 / 86 ( 7 ) and
No 3975 / 87 (').

5 . In cases covered by this Notice, and subject to point 11, the Commission will not institute any

proceedings either upon application or on its own initiative . Where undertakings have failed to notify
an agreement falling within the scope of Article 85 ( 1 ) because they assumed in good faith that the
agreement was covered by this Notice, the Commission will not consider imposing fines .

6 . This Notice is likewise applicable to decisions by associations of undertakings and to concerted

practices .

7 . This Notice is without prejudice to the competence of national courts to apply Article 85 . However, it

constitutes a factor which the courts may take into account when deciding a pending case . It is also
without prejudice to any interpretation of Article 85 which may be given by the Court of Justice or the
Court of First Instance of the European Communities .

8 . This Notice does not entail the inapplicability of the provisions of national laws sanctioning anti ­

competitive practices .

II .

9 . The Commission holds the view that agreements between undertakings engaged in the production or

distribution of goods or in the provision of services do not fall under the prohibition in Article 85 ( 1 ) if
the market share held together by all of the participating undertakings does not exceed, on any of the
relevant markets :

— the 5 % threshold, where the agreement is made between undertakings operating at the same level

of production or of marketing (' horizontal ' agreement ),

— the 10 % threshold, where the agreement is made between undertakings operating at different

economic levels (' vertical ' agreement ).

In the case of a mixed horizontal / vertical agreement or where it is difficult to classify the agreement as
horizontal or vertical, the 5 % threshold is applicable .

10 . The Commission also holds the view that the said agreements do not fall under the prohibition of

Article 85 ( 1 ) if the market shares indicated above at point 9 are exceeded by no more than one tenth
during two successive financial years .

11 . With regard to those agreements which have as their object :

( a ) to fix prices or production or sales quotas ; or

( b ) to share markets or sources of supply,

the applicability of Article 85 ( 1 ) cannot be excluded even where the market share held together by all
of the participating undertakings remains below the thresholds mentioned in points 9 and 10 .

C ) OJ No 13, 21 . 2 . 1962, p . 204 / 62 .
(') OJ No L 175, 23 . 7 . 1968, p . 1 .
O OJ No L 378, 31 . 12 . 1986, p . 4 .
(') OJ No L 374, 31 . 12 . 1987, p . 1 .

No C 29 / 8 fENl Official Journal of the European Communities 30 . 1 . 97

The Commission considers, however, that in the first instance it is for the authorities and courts of the
Member States to act in the case of agreements indicated above in ( a ) and ( b ). Therefore, it will not
intervene in such cases otherwise than exceptionally, when it considers that the interest of the
Community so demands, and in particular if the agreements impair the proper functioning of the
internal market .

12 . For the purposes of this Notice, ' participating undertakings ' are :

( a ) undertakings being parties to the agreement ;

( b ) undertakings in which a party to the agreement, directly or indirectly,

— owns more than half of the capital or business assets, or

— has the power to exercise more than half of the voting rights, or

— has the power to appoint more than half of the members of the supervisory board, board of

management or bodies legally representing the undertakings, or

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

( c ) undertakings which directly or indirectly have over a party to the agreement the rights or powers

listed in ( b );

( d ) undertakings over which an undertaking referred to in ( c ) has, directly or indirectly, the rights or

powers listed in ( b ).

Undertakings over which several undertakings as referred to in ( a ) to ( d ) jointly have, direcdy or
indirectly, the rights or powers set out in ( b ) shall also be considered to be participating undertakings .

13 . In order to calculate the market share, it is necessary to determine the relevant market . For this, the

relevant product market and the relevant geographic market must be determined .

14 . The relevant product market includes besides the contract products any other products which are

regarded as interchangeable or substitutable by the consumer, by reason of their characteristics, prices
and intended use .

15 . The following factors in particular should be taken into account in determining the relevant product

market :

— the degree of physical similarity between the products in question,

— any differences in the end use to which the products are put,

— differences in price between two products,

— the cost of switching between two potentially competing products,

— established or entrenched consumer preferences for one type or category of product over another .

16 . The relevant geographic market is the area in which the products that are the subject of the agreement

compete with products offered by other producers or distributors, in which the conditions of
competition are sufficiently homogeneous, and which can be distinguished from neighbouring areas
because, in particular, conditions of competition are appreciably different in those areas . The
assessment should take account in particular of the nature and characteristics of the products
concerned ; the existence of entry barriers ; consumer preferences ; appreciable differences in the under ­
takings ' market shares between the area concerned and neighbouring areas ; and substantial price
differences .

30 . 1 . 97 | EN | Official Journal of the European Communities No C 29 / 9

17 . In the case of doubt about the definition of the relevant geographic market, undertakings may take the

view that there is no appreciable restriction of competition when the market-share thresholds indicated
in points 9 and 10 above are not exceeded in any Member State . This view, however, will not preclude
any application of national law to the agreements in question .

18 . Chapter II of this Notice shall not apply where in a relevant market competition is restricted by the

cumulative effects of parallel networks of similar agreements established by several manufacturers or
dealers .

III .

19 . Agreements between small and medium sized undertakings, as defined in the Annex to the Commission

recommendation of 3 April 1996 ( 9 ) are rarely capable of significantly affecting trade between Member
States and competition . Consequently, as a general rule, they are not caught by the prohibition in
Article 85 ( 1 ). In cases where such agreements exceptionally meet the conditions for the application of
that provision, they will not be of sufficient Community interest to justify any intervention . This is why
the Commission will not institute any proceedings, either upon request or on its own initiative, to apply
the provisions of Article 85 ( 1 ) to such agreements, even if the thresholds set out in points 9 and 10
above are exceeded .

20 . The Commission nevertheless reserves the right to intervene in such agreements :

( a ) where they cover a substantial share of the relevant market ;

( b ) where, in the relevant market, competition is restricted by the cumulative effect of parallel

networks of similar agreements made between several producers or dealers .

(') OJ No L 107, 30 . 4 . 1996, p . 4 .