Horizontal agreements: European businesses demand legal certainty on digitalisation and sustainability

Earlier this year, we reported on the European Commission’s consultation on its revised guidance for cooperation between competitors. This guidance and rules can be found in the Commission’s Horizontal Cooperation Guidelines, together with the R&D and Specialisation Block Exemption Regulations (HBERs). The HBERs are due to expire in December 2022, and the EC ran a public consultation process to review them.

The EC received 85 contributions from stakeholders across different economic sectors (including Linklaters). These contributions are available on the EC’s consultation page.

Sustainability and digitalisation are the top two key trends that should be addressed

Sustainability and digitalisation are the two trends that respondents consider most important in relation to the application of the horizontal rules.

  • Sustainability: there is a clear need to respond pro-actively to climate change and this has increased demand for sustainable, ethical and environmentally-friendly business practices. The view expressed is that the existing horizontal rules and guidance do not provide sufficient guidance and comfort in this respect. The revised rules should also be aligned with the ambitious environmental goals set out in the EC’s Green Deal.
  • Digitalisation: the rules should reflect the dynamics of the digital economy, such as the increasing reliance on digital technologies, the impact of data on competition, data pooling, data sharing and algorithms. Some respondents mentioned potential inconsistencies with on-going digitalisation and data-sharing initiatives and called for the Commission to facilitate data sharing and data pooling agreements, in line with the EC’s goals on the EU Data Space.
Greater legal certainty required

Against this background, contributors ask for more clarity and legal certainty on the boundaries of legitimate cooperation between actual or potential competitors. The salient points are the following:

The Horizontal Guidelines and HBERs do not provide clear enough guidance for certain types of horizontal cooperation, leading to a lack of legal certainty. The Guidelines should specifically address sustainability agreements, data sharing agreements, collective bargaining, joint purchasing, joint bidding, co(re)insurance agreements.

The EC should consider a much broader horizontal cooperation block exemption beyond R&D and specialisation agreements, similar to the vertical restraints block exemption, given the diversity of cooperation arrangements in certain markets.

The Horizontal Guidelines should provide further guidance on the legitimate boundaries of information exchange when it comes to (new) practices such as benchmarking, data pooling, data sharing and other types of collaboration regarding artificial intelligence, ecosystems, network sharing, and platforms.

The market share safe-harbours should be increased to reflect market realities.  Respondents pointed also to the complexity of defining markets and calculating shares in certain markets.

Next steps

The EC was expected to host a stakeholder workshop with representatives from all main stakeholder groups in Q2 2020 and later discuss possible revisions within the European Competition Network. This will no doubt be delayed due to the Covid-19 crisis. In Q1 2021, the EC plans to adopt its own staff working document to present the results of the consultation.