European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Rival undertakings sometimes come together in order to group their production. The production agreement is, according to Regulation No 2023/1067 , the one under which two or more parties agree to produce certain products jointly. Joint production can take various forms: a joint venture, i.e. a jointly controlled undertaking operating one or more production facilities, a team or a joint organizatio …

Production agreements

Rival undertakings sometimes come together in order to group their production. The production agreement is, according to Regulation No 2023/1067 , the one under which two or more parties agree to produce certain products jointly. Joint production can take various forms: a joint venture, i.e. a jointly controlled undertaking operating one or more production facilities, a team or a joint organization made up of an equal or unequal number of representatives of the parties . Although Article 101 prohibits agreements which have the object or effect of restricting or controlling production, such agreements can escape the ban, if they have no other purpose than to allow undertakings to rationalize their production or to prevent undertakings from taking on production for which they are not competitive , while at the same time enabling each of them to offer their customers a full range of products .

The legality of such agreements is subject to the condition that they do not lead to coordination of the behavior of the parties in their capacity as suppliers. The agreements must not set prices for products supplied by the parties on the market, limit production or allocate markets or groups of customers . A cooperation agreement between competing producers is unlawful if it would automatically lead to an exchange of information relating to the state of stocks, current production, production forecasts, orders received and forecasts of trends in demand .

Regulation No 2023/1067 of 1 June 2023, on the application of Article 101(3) of the Treaty on the Functioning of the European Union to certain categories of specialization agreements, Article (1)(1)(c). Production means the manufacture of goods or the preparation of services, including those involving subcontracting (Article (1)(1)(4)). Subcontracting agreements between non-competitors fall within the scope of vertical restraints.

Guidelines on the applicability of Article 101 TFEU to horizontal cooperation agreements, pts 174.

Commission Decision No 90/446/EEC of 27 July 1990, Konsortium ECR 900, LawLex200500004576JBJ: the cooperation agreement between undertakings in the telecommunications sector covering the joint production and marketing of the GSM mobile telephone system does not restrict competition insofar as any individual action is inconceivable due to the amount of expenditure and the staff required; Case T-328/03 O2 (Germany) v Commission [2006] ECR II-1231, LawLex200600002434JBJ.

Commission Decision No 81/1066/EEC of 26 November 1981, Sopelem-Vicker, LawLex200300001279JBJ: an agreement for technical cooperation and exchange of know-how between competing producers with distribution exclusivity for each party's products in various territories according to their respective levels of establishment in the territory is an indispensable restriction within the meaning of Article 101(3) TFEU enabling the achievement of benefits consisting in the reduction of production costs and longer production runs.

Guidelines for horizontal cooperation agreements, pt 217 et seq.

Commission Decision No 73-212 of 11 May 1973, Société commerciale des potasses et de l'azote - Kali und Salz, LawLex200500005279JBJ.

Specialization agreements for production allow undertakings to focus their activity on the manufacture of specific products, to operate more effectively and to market the products concerned at lower prices. Specialization pertaining to production and the mutual supply of items by competing producers is likely to modify the flow of trade of the products in question . It restricts the present and future freedom of action of the parties insofar as each contracting party renounces all investment and production opportunities in the area of specialization of the other party for an indefinite period . Specialization agreements may be unilateral or reciprocal and Commission Regulation No 2023/1067 of 1st June 2023 on the application of Article [101(3)] of the Treaty to categories of specialization agreements covers both types. The agreement is exempted on condition that the combined market share of the participating undertakings does not exceed 20% of the relevant market (Article 3 of Regulation No 2023/1067, Art. 3). The block exemption applies to ancillary restrictions of specialization agreements such as exclusive purchase and/or supply obligations (Art. 2). The market share is calculated on the basis of the market sales value; if market sales value data are not available, other reliable market information, e.g. market sales volumes, relating to the preceding calendar year can be used (Article 4). If the market share is initially not more than 20% but subsequently rises above this level without exceeding 25%, the exemption continues to apply for a period of two consecutive calendar years following the year in which the 20% threshold was first exceeded. If the market share is initially not more than 20% but subsequently rises above 25%, the exemption continues to apply for one calendar year following the year in which the level of 25% was first exceeded. The regulation lays down those black clauses which are not covered by the exemption - the fixing of prices, the allocation of markets or customers or the limitation of production (Article 4). However, provisions on the agreed amount of products in the context of unilateral or reciprocal specialization agreements or the setting of the capacity and production volume of a production joint venture in the context of a joint production agreement do not fall within the context of black clauses.

Prior to the entry into force of the BER, the Commission considered that a specialization agreement between competing producers could be more effective than competition itself insofar as it could reduce capacity and improve loading since its beneficial effects are felt immediately . It has also granted exemptions for agreements between competitors which helped to effectively streamline the activities in a sector suffering from serious structural overcapacity  or which left the parties to the agreement the possibility of offering a full complement of products in all price ranges, or facilitated the development of research for a better quality of product . The Regulation confirms this special treatment as in its recitals it states that agreements on specialization can contribute to the improvement of production or distribution of products and services if the parties have complementary skills, assets or activities .

Commission Decision No 71/222/EEC of 28 May 1971, FN/CF (not available in English).

Commission Decision No 69/241/EEC of 22 July 1969, Clima Chappée/Buderus (not available in English).

Commission Decision No 84/387/EEC of 19 July 1984, BPCL/ICI, LawLex200500004392JBJ.

Commission Decision No 87/3/EEC of 4 December 1986, ENI/Montedison, LawLex200500004454JBJ.

Commission Decision No 75/76/EEC of 20 December 1974, Rank/Sopelem, LawLex200400003451JBJ; No 78/194/EEC of 23 December 1977, JAZ-Peter, LawLex200400002399JBJ.

European Competition Law

95. Production agreements

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

95. Production agreements

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise