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

Generally, restrictions are related and necessary to the concentration where they are aimed at ensuring the purchaser's protection. Therefore, a non-solicitation clause which is materially limited in time and space is an ancillary restraint , provided that it only protects the purchaser's interests . Where restrictions are however stipulated to the benefit of the vendor, they are ancillary only if …

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Generally, restrictions are related and necessary to the concentration where they are aimed at ensuring the purchaser's protection. Therefore, a non-solicitation clause which is materially limited in time and space is an ancillary restraint , provided that it only protects the purchaser's interests . Where restrictions are however stipulated to the benefit of the vendor, they are ancillary only if their scope and/or duration are more limited than those to the benefit of the purchaser.

1º) Non-compete clauses/Confidentiality agreements

Non-competition clauses are ancillary restraints where they are limited in time, in space and materially (Commission Notice No 2005/C 56/03 of 5 March 2005). They cannot be of more than three years' duration and must relate to goodwill and the transfer of know-how or cannot exceed two years . However, the clause can be longer if the industry in question has unusually long life cycles  or a high degree of customer loyalty . Non-competition clauses cannot concern assets or intellectual property rights which benefit from specific protection . They must remain limited to products and services forming the activity of the vendor . In the case of a joint venture, the non-competition clause is ancillary only where it applies for the period during which each party holds a controlling stake in the joint venture  and cannot go beyond the duration of the joint venture . Lastly, the parent companies' commitment not to acquire interests in the capital of companies competing with the joint venture constitutes an ancillary restraint necessary for the concentration where it meets the conditions of lawfulness of a non-competition clause .

In order to be characterized as ancillary restraint, a confidentiality clause must also relate to technical know-how and not to mere general commercial information , it must be limited to the products and services which form the activity of the purchased undertaking and only apply to the corresponding territory .

License agreements for intellectual property rights are restrictions directly related and necessary to the concentration where they reflect the economic equivalent to a transfer of these rights and serve to ensure that the acquirer receives full benefit of the acquired assets . The same goes for irrevocable agreements between a joint venture and its parents relating to activities retained by the parent  or which reflect the reality of the parent companies' withdrawal from the joint venture's market . By contrast, the agreement which prohibits the seller from using a general term as corporate name for an indefinite period  or which relates to technologies outside the transaction  cannot be considered as ancillary to the concentration.

A purchase, supply or distribution agreement constitutes an ancillary restraint where it ensures the continuity of supply and its duration is limited to five years and it enables the purchaser to fully benefit from the purchased assets . This would be the case of an exclusive supply agreement entered into between the parents and the joint venture where it would be difficult to find alternative sources of supply and third parties still have to be supplied . The duration of application of the clause must not exceed the time necessary to ensure that the undertaking is progressively autonomous . However, a duration of over five years can be approved where there are exceptional reasons . By contrast, an indefinitely renewable agreement cannot be considered as an ancillary restraint .

Commission Decision M.1482 of 12 April 1999, Kingfisher/Grosslabor, LawLex200500005290JBJ.

Commission Decision M.983 of 22 September 1997, Bacob Banque/Banque Paribas Belgique (not available in English).

Commission Decision M.1167 of 29 April 1998, ICI/Williams, LawLex200400003143JBJ.

Commission Decision M.1980 of 1 September 2000, Volvo/Renault VI, LawLex200400003128JBJ.

Commission Decision M.497 of 14 October 1994, Matra Marconi Space/Satcomms, LawLex200500004152JBJ.

Commission Decision M.564 of 6 April 1995, Havas Voyages/American Express (not available in English).

Commission Decision M.512 of 7 November 1994, UAP/Provincial, LawLex200500004154JBJ.

Commission Decision M.1980 of 1st September 2000, Volvo/Renault VI, LawLex200400003128JBJ.

Commission Notice No 2005/C 56/03; Commission Decision M.550 of 13 March 1995, Union Carbide/Enichem, LawLex200400002516JBJ.

Commission Decision M.550 of 13 March 1995, Union Carbide/Enichem, LawLex200400002516JBJ.

Commission Decision M.427 of 17 June 1994, Rhône-Poulenc/Caffaro (not available in English).

See, Commission Decision M.1298 of 23 October 1998, Kodak/Imation, LawLex200400003131JBJ; M.884 of 14 February 1997, KNP BT/Bunzl/Wilhelm Seiler, LawLex200400002567JBJ.

Commission Decision M.612 of 27 July 1995, RWE-DEA/Enichem Augusta, LawLex200500004155JBJ, e.g. difficulties to find alternative sources of supply within a reasonable time.

Commission Decision M.1940 of 6 December 2000, Framatome/Siemens/Cogéma/JV, LawLex200500004491JBJ.

Commission Notice CE 2005/C 56/03, aforementioned.

Commission Decision M.1979 of 4 August 2000, CDC/Banco Urquijo/JV, LawLex200400003145JBJ.

Commission Decision JV.18 of 1st June 1999, Chronopost/Correos (not available in English).

Commission Decision M.1913 of 29 August 2000,  Lufthansa/Menzies/LGS/JV, LawLex200400003146JBJ.

Commission Decision M.1863 of 18 December 2000, Vodafone/BT/Airtel JV, LawLex200400003147JBJ.

European Competition Law

310. Types

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

310. Types

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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