Joint Production Agreement Competition Law

The analysis of joint procurement agreements is relatively complex in two respects: other key elements held by competition authorities and the courts in the context of the exchange of information are: in this context, distribution includes sales to downstream customers and joint distribution is defined not only when the parties make sales through a team or entity or a common entity, but also when they jointly designate a third-party distributor (provided the third party is not a potential competitor or competitor). Ber specialisation exempts certain specialisation and common production agreements from the scope of Article 101 of the TFUE, which prohibits agreements that have the effect or effect of preventing, restricting or distorting competition within the Union. Finally, it should be noted that the Office of Fair Trading (predecessor of the British Competition and Market Authority) adopted a more favourable approach to joint purchasing in April 2010 in its succinct opinion on a joint purchase agreement between Palmer and Harvey McLane and Makro Self-Service Wholesalers (predecessor of the UK Competition and Market Supervisory Authority). In particular, it found that the types of common production and specialisation agreements are covered by the category exemption for the revised Specialisation Agreement (SBE). Specialization is when one party stops producing or reducing a particular product and buys it from the other (this can be done on a reciprocal basis if each producer withdraws from a market and buys the products from its competitor, or unilaterally). In the absence of mergers, strategic alliances and similar transactions, there are many opportunities for cooperation between competitors under competition law. Article 101 of the Treaty on the Functioning of the European Union (TFUE) is, in accordance with the national legislation of EU Member States, the main provision of EU competition law in this context. Overall, it prohibits agreements that effectively restrict, distort or prevent competition by purpose or objective (Article 101, paragraph 1, of the EUTS). However, agreements demonstrating that they generate consumer-friendly benefits and predominate anti-competitive effects may be exempted as long as the applicable exemption conditions are met (Article 101, paragraph 3, of the EUTF). The European Commission has identified certain categories of horizontal agreements that can be automatically exempted if they are covered by the parameters set out in the various category exemption regulations described in this quick guide. In this area, where agreements do not involve joint sales, the guidelines indicate that competition concerns are unlikely to occur if the parties` combined market share does not exceed 15%. Where an anti-competitive agreement is not tax-exempt (individually or automatically as part of a class exemption), it is unenforceable and may result in normal competition penalties (including potentially high fines and the risk of third-party claims). In implementing such an assessment, much of it will depend on the market in which the parties to the agreement operate.

If the cumulative market share of the parties to a joint specialisation and production agreement is greater than 20%, several additional factors must be taken into account, including the market concentration rate, the number of operators, the existence of barriers to entry and other similar agreements in the market, as well as market dynamics in general. However, agreements limited to joint sales (unlike joint sales in the context of cooperation with common production/specialization, as described above) are considered to be intended to restrict competition within the meaning of Article 101, paragraph 1, and must therefore always be taken into account under Article 101, paragraph 3. This also applies where the agreement is not exclusive (i.e. when the parties can sell outside of cooperation) until the agreement results in general price coordination.

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