Commission adopts revised de minimis notice and guidance on object restrictions

On 25 June 2014, the European Commission adopted a revised notice on agreements of minor importance that do not appreciably restrict competition under Article 101(1). At the same time, the Commission issued new guidance on restrictions 'by object', designed to assist companies in assessing whether their agreements may benefit from the de minimis notice.

Under the de minimis notice (the Notice), agreements which may have as their effect the prevention, restriction or distortion of competition within the internal market will not have an appreciable restriction of competition where the market shares of the companies involved fall below certain thresholds. The market share thresholds are a 10 per cent aggregate market share for horizontal agreements (i.e. between competitors) and 15 per cent share on each of the markets affected in respect of vertical agreements (i.e between non-competitors). Where market shares exceed these levels, this does not automatically mean that the agreement will have an appreciable effect, but this will need to be assessed on the facts.

In the Notice the Commission states that it will not initiate proceedings in cases falling within the notice. In addition, where undertakings already under investigation acted in the good faith belief that the market share thresholds were not exceeded, the Commission will not impose fines.

One of the main changes to the previous de minimis notice is that the Commission makes clear that no agreements which restrict competition by object can benefit from the Notice, irrespective of how low the market shares of the participants may be.

The Commission has issued accompanying guidance explaining in detail the distinction between restrictions of competition by object and by effect. The Commission's guidance sets out the principal restrictions which it considers to restrictions of competition by object, for example price fixing, market sharing, bid-rigging and sales restrictions on buyers. Where appropriate, the Commission also sets out circumstances where such restrictions may nonetheless benefit from the safe harbours set out in the de minimis notice. For example, where competitors in a joint purchasing arrangement agree their purchase price, this would not be an object restriction and could benefit from the market share safe harbour.

Please click on the links below for the other articles in the April 2014 competition newsletter:

• MOFCOM blocks cooperation in shipping sector
• ECJ dismissed Nexans' appeal against geographic scope of dawn raid
• Australian energy company overcomes vertical integration concerns to secure first merger authorisation
• General Court dismisses Intel appeal of abuse of dominance decision