Block Exemption Regulation Horizontal Agreements: What You Need to Know
If you work in the business world, you may have come across the term « block exemption regulation horizontal agreements » and wondered just what it means. In short, it refers to a set of European Union (EU) laws that govern certain types of agreements between companies. Here`s what you need to know:
What is a horizontal agreement?
A horizontal agreement is an agreement between two or more companies that are at the same level in the supply chain. In other words, they are competitors. Examples of horizontal agreements include agreements to fix prices, divide up markets, or limit production.
What is the Block Exemption Regulation?
The Block Exemption Regulation (BER) is a set of laws put in place by the EU to regulate certain types of agreements between companies. The purpose of the BER is to ensure that businesses can cooperate with each other without violating EU competition laws. The regulation exempts certain types of agreements from the normal competition rules, provided that certain conditions are met.
What types of agreements are covered by the BER?
The BER covers a wide range of agreements, including:
– R&D agreements: agreements between companies to cooperate on research and development projects
– Specialization agreements: agreements between companies to specialize in certain products or services
– Production agreements: agreements between companies to share production facilities or coordinate production activities
– Purchasing agreements: agreements between companies to purchase goods or services together
– Commercial cooperation agreements: agreements between companies to cooperate on marketing, distribution, or other commercial activities
What are the conditions for exemption under the BER?
In order for an agreement to be exempt from EU competition rules under the BER, it must meet certain conditions. These include:
– The agreement must contribute to improving the production or distribution of goods or services, or to promoting technical or economic progress
– The agreement must allow consumers a fair share of the resulting benefits
– The agreement must not impose restrictions that are unnecessary to achieve the above objectives
– The parties to the agreement must have a combined market share of no more than 30%
What are the benefits of the BER?
The main benefit of the BER is that it allows companies to cooperate with each other without fear of violating EU competition laws. This can lead to increased efficiency, lower costs, and improved products or services. The BER also provides greater legal certainty for companies, as they can be confident that their agreements will not be challenged by competition authorities.
In conclusion, block exemption regulation horizontal agreements are an important aspect of EU competition law. They allow companies to cooperate with each other in certain ways without violating competition rules, and can lead to significant benefits for businesses and consumers alike. If you are involved in a horizontal agreement, it is important to understand the conditions for exemption under the BER and ensure that your agreement meets these requirements.