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Commission Notice on Agreements of Minor Importance: What You Need to Know

In the world of business, agreements between companies are commonplace. Whether it`s a partnership, a joint venture, or a licensing agreement, these contracts are crucial to the functioning of the economy. However, not all agreements are of equal importance. Some are so minor that they do not have a significant impact on competition. These agreements are referred to as “agreements of minor importance” and are subject to special rules under European Union (EU) competition law.

To clarify the rules surrounding these agreements, the European Commission published the Commission Notice on Agreements of Minor Importance in 2001. This notice sets out the categories of agreements that are considered to be of minor importance, and the criteria that must be met for an agreement to fall into this category.

Categories of Agreements of Minor Importance

The Commission Notice on Agreements of Minor Importance identifies three categories of agreements that are considered to be of minor importance:

1. Agreements between companies with a combined market share of no more than 10%.

2. Agreements between non-competitors.

3. Agreements that do not contain certain “hardcore” restrictions such as price-fixing or market-sharing.

Criteria for an Agreement to be of Minor Importance

To qualify as an agreement of minor importance, an agreement must meet certain criteria. These criteria vary depending on the category of agreement, but some common requirements include:

– The agreement should not have an appreciable impact on competition.

– The parties must not have a dominant position in the relevant market.

– The agreement should not be implemented for a period longer than five years.

– The agreement must not contain any “hardcore” restrictions such as price-fixing or market-sharing.

Applying for an Exemption

If an agreement meets the criteria for an agreement of minor importance, the parties can apply for an exemption from EU competition law. This exemption is known as a “block exemption.” Block exemptions can save companies a significant amount of time and money by allowing them to avoid the lengthy process of seeking individual approval from the European Commission.

Conclusion

The Commission Notice on Agreements of Minor Importance provides clarity and guidance for companies that wish to enter into agreements of minor importance. By meeting the criteria set out in the notice, companies can benefit from the block exemption and avoid the time-consuming and expensive process of seeking individual approval. It is important for businesses to be aware of these rules and to seek legal advice if they are unsure whether their agreement qualifies as an agreement of minor importance.