Horizontal Block Exemption Regulations (HBER) (HBER)
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Summary
The Horizontal Block Exemption Regulations (HBER) are Commission regulations that exempt certain categories of research and development (R&D) agreements and specialisation agreements from the EU competition law prohibition in Article 101(1) TFEU, provided specified conditions are met. They set out market-share thresholds and other safeguards intended to ensure that the exempted cooperation is likely to generate efficiencies while limiting risks to competition. The 2023 HBER package modernised and replaced the previous rules for these types of horizontal cooperation agreements.
Who is affected?
Businesses and trade associations entering into horizontal cooperation agreements—especially R&D cooperation and production/specialisation arrangements—are affected, as well as their legal/compliance advisers. National competition authorities and courts also rely on the regulations when assessing whether Article 101(1) TFEU applies and whether an exemption is available.
Scope
Applies to specific categories of horizontal cooperation agreements (notably R&D and specialisation agreements) that meet the regulations’ conditions, including market-share thresholds and competition safeguards, for the purposes of Article 101(3) TFEU.
Key Points
- Provides a block exemption for qualifying R&D agreements subject to conditions (including market-share thresholds and safeguards against hardcore restrictions).
- Provides a block exemption for qualifying specialisation agreements (including unilateral and reciprocal specialisation and joint production) subject to conditions (including market-share thresholds and safeguards).
- Defines excluded restrictions and conditions under which the block exemption does not apply (e.g., certain hardcore restrictions).
- Replaces the previous R&D and Specialisation block exemption regulations and aligns with the updated Horizontal Guidelines.
- Gives companies greater legal certainty for common forms of efficiency-enhancing horizontal cooperation while preserving enforcement against anticompetitive conduct.
Frequently Asked Questions
Who must comply with the Horizontal Block Exemption Regulations (HBER)?
Businesses and trade associations entering into horizontal cooperation agreements, particularly those involving research and development (R&D) or specialisation, must comply with HBER. Legal and compliance advisers, as well as national competition authorities and courts, also use these regulations to assess agreements under EU competition law.
What types of agreements fall within the scope of HBER?
HBER applies to specific categories of horizontal cooperation agreements, notably R&D agreements and specialisation agreements, provided they meet the conditions set out in the regulations, such as market-share thresholds and competition safeguards.
What are the key obligations for companies under HBER?
Companies must ensure their agreements fall within the defined categories, respect market-share thresholds, and avoid hardcore restrictions. They must also comply with all other conditions and safeguards specified in the regulations to benefit from the block exemption.
What are the market-share thresholds under HBER?
The regulations specify maximum combined market-share thresholds for parties to R&D and specialisation agreements. If these thresholds are exceeded, the block exemption does not apply, and the agreement must be individually assessed under Article 101 TFEU.
What are 'hardcore restrictions' and how do they affect exemption under HBER?
Hardcore restrictions are specific types of anticompetitive conduct, such as price-fixing or market allocation, that are strictly prohibited. Agreements containing such restrictions cannot benefit from the block exemption, regardless of other conditions.
What are the penalties for non-compliance with HBER?
Non-compliance may result in the agreement being found in breach of Article 101(1) TFEU, leading to potential fines, invalidity of the agreement, and possible damages claims. The European Commission or national competition authorities may enforce these penalties.
How does HBER interact with other EU competition rules?
HBER provides a safe harbour from the prohibition in Article 101(1) TFEU for qualifying agreements but does not exempt agreements from other competition rules or regulations. Agreements not covered by HBER must be assessed individually under Article 101(3) TFEU.
What practical steps should companies take to ensure compliance with HBER?
Companies should review their horizontal cooperation agreements to ensure they meet the relevant definitions, market-share thresholds, and do not contain hardcore restrictions. Regular monitoring and legal review are advisable to maintain compliance as market conditions change.
What changes did the 2023 HBER package introduce?
The 2023 HBER package modernised and replaced the previous block exemption regulations for R&D and specialisation agreements, aligning them with updated Horizontal Guidelines and clarifying conditions for exemption.
How long do the current HBER regulations remain in force?
The current HBER regulations, adopted in 2023, will remain in force until their stated expiry date unless amended or replaced by the European Commission. Companies should monitor for updates or revisions.
Key Terms
- Horizontal Cooperation Agreement
- An agreement between competitors operating at the same level of the supply chain, such as R&D or production collaborations.
- Block Exemption
- A legal provision that automatically exempts certain categories of agreements from the prohibition in Article 101(1) TFEU, provided specific conditions are met.
- R&D Agreement
- A horizontal cooperation agreement focused on joint research and development activities between two or more parties.
- Specialisation Agreement
- An agreement where parties agree to specialise in the production of certain products or services, often involving joint production or reciprocal arrangements.
- Market-Share Threshold
- A maximum combined market share that parties to an agreement must not exceed to benefit from the block exemption.
- Hardcore Restriction
- A type of serious anticompetitive conduct, such as price-fixing or market sharing, which disqualifies an agreement from block exemption.
- Excluded Restriction
- A restriction defined by the regulation that, if present in an agreement, prevents the application of the block exemption.
- Article 101(1) TFEU
- The Treaty provision prohibiting agreements between undertakings that restrict competition within the EU internal market.
- Article 101(3) TFEU
- The Treaty provision allowing exemptions from Article 101(1) for agreements that generate efficiencies and benefit consumers.
- Horizontal Guidelines
- Non-binding guidance issued by the European Commission to clarify the application of competition rules to horizontal cooperation agreements.