Specialization Agreements Block Exemption: A Guide for Businesses

In today`s competitive business world, companies are often required to collaborate with one another to achieve their objectives. These collaborations can take many forms, including joint ventures, licensing agreements, and other arrangements. The European Union (EU) has recognized the value of these collaborations in promoting innovation and growth and has established certain exemptions to the normal rules of competition law to allow businesses to collaborate without fear of violating the law.

One such exemption is the Specialization Agreements Block Exemption, which allows businesses to enter into agreements that involve sharing of resources or knowledge without running afoul of the EU`s competition laws. This article will provide a brief overview of the Specialization Agreements Block Exemption, and explain how businesses can use it to their advantage.

What is the Specialization Agreements Block Exemption?

The Specialization Agreements Block Exemption is a rule that allows businesses to enter into agreements that involve sharing resources, knowledge, or expertise without violating the EU`s competition laws. The rule was established in 2010 and applies to agreements between businesses that are not competitors, or between businesses that are competitors but whose combined market share is below a certain threshold.

The rule is intended to promote cooperation between businesses, particularly in areas where specialized knowledge or resources are required. By allowing businesses to share resources and knowledge, the rule promotes innovation and increases efficiency, benefiting consumers in the long run.

When can a business use the Specialization Agreements Block Exemption?

To qualify for the Specialization Agreements Block Exemption, a business must meet certain criteria. First, the agreement must be between businesses that are not competitors, or between businesses whose combined market share is below certain thresholds. The threshold varies depending on the type of agreement, but generally ranges from 10% to 30% of the relevant market.

Second, the agreement must be limited in scope and duration. The agreement must be limited to specific activities, and the duration of the agreement must not exceed five years. The agreement must also be necessary to achieve the objectives of the collaboration, and the parties must not share any sensitive information that could harm competition.

Finally, the agreement must not contain any provisions that could harm competition. For example, the agreement must not contain any restrictions on the parties` ability to enter into agreements with other businesses, and must not restrict the parties` ability to compete in any way.

How can a business take advantage of the Specialization Agreements Block Exemption?

To take advantage of the Specialization Agreements Block Exemption, a business must notify the EU Commission before entering into the agreement. The notification must include details about the agreement, including the parties involved, the duration of the agreement, and the market share of the parties.

The EU Commission will then review the agreement to determine whether it meets the criteria for the Specialization Agreements Block Exemption. If the agreement meets the criteria, the parties can proceed with the collaboration without fear of violating competition law.

Conclusion

The Specialization Agreements Block Exemption is a valuable tool for businesses looking to collaborate without violating competition law. By allowing businesses to share resources and knowledge, the rule promotes innovation and increases efficiency, benefiting consumers in the long run.

To take advantage of the Specialization Agreements Block Exemption, businesses must ensure that their agreements meet the criteria established by the EU Commission. By doing so, businesses can collaborate with one another without fear of violating competition law and without the need for complex legal agreements.