The European Commission has given informal guidance to two groups of competitors who are collaborating to achieve EU sustainability and industrial policy goals.
In each case the guidance gives comfort to the firms involved as to the compatibility of their initiative with antitrust law. Both projects deal with upstream negotiating and purchasing, and are open and voluntary in nature. They concern:
- sustainability in ports: an agreement for joint purchasing and setting of technical specifications for electric container-handling equipment (replacing diesel equipment and so reducing CO2 emissions); and
- industrial policy and sustainability in the automotive sector: licensing negotiation group to negotiate licences for (digital) technologies covered by standard essential patents (SEPs).
This is the first time that the Commission has formally made use of its Informal Guidance Notice, which was first introduced in 2004.
Why does the Commission give informal guidance?
The Commission’s Notice on Informal Guidance allows it to provide informal guidance to companies in cases presenting novel or unresolved questions for the application of the EU competition rules.
The Commission wants this to be used in particular to facilitate cooperation between companies which further EU policy aims, in situations where the parties might worry that their arrangements could infringe competition law, and so need comfort in this respect. The Commission has long been frustrated that companies have very rarely requested such guidance, and it revised the Notice in 2022 to try to make the procedure more attractive to companies.
These two cases are just such situations. The Commission notes that licensing negotiation groups are a novel form of agreement, for which there is no specific competition law guidance. The licensing agreement aims to increase efficiency in the licensing of SEPs related to digital technologies, and is expected to contribute to decarbonisation and the transition to net-zero, as well as to increasing the competitiveness of the automotive sector. As to the ports equipment agreement, this would accelerate the shift from diesel to electric equipment in EU ports, contributing to reducing CO2 emissions.
What does the informal guidance say?
The guidance says that the arrangements in question do not raise antitrust concerns, provided that certain conditions are respected.
In the case of the automotive agreement, a key condition is that the combined market share of its members does not exceed 15 per cent of the total demand for the SEPs or standards concerned. The group must only negotiate licences for standards that are not specific to the automotive sector, and be open to other automotive companies, and negotiations must be voluntary for SEP holders. Importantly, exchange of information within the group is limited to what is necessary to conduct the joint licensing negotiations, with no commercially sensitive information being shared.
The German competition authority also gave guidance on the automotive agreement, in June 2024, saying that it had no serious concerns. Notably, it stated that the 15 per cent threshold was in fact exceeded in some cases, but that the risk of coordination was not significant because the licence costs for SEPs usually account for less than 1 per cent of a vehicle’s total production costs.
In the case of the port equipment agreement, there is no market share cap, but instead a requirement that the “volume of demand that is pooled through the agreement is capped and therefore does not give rise to anti-competitive effects vis-à-vis suppliers”. Participating operators must still be able to purchase the relevant equipment independently, and again, the exchange of competitively sensitive information cannot exceed what is strictly necessary for the functioning of the agreement. In addition, the ports equipment guidance remains applicable only for five years.
What are the benefits to companies of informal guidance?
For companies engaging in projects that contribute to EU policy objectives, this can offer a fairly quick way to obtain a significant measure of comfort: as long as all the conditions of the guidance are respected, the Commission will not take enforcement action.
But that is as far as the comfort goes. Informal guidance binds no one except the Commission – and that only as long as circumstances do not change. The Commission flags this in the guidance provided, and states that its informal guidance does “not create any rights or obligations for the applicants or any third party” but rather is intended to help companies carry out “their own self-assessment of the applicability of the EU competition rules”.
A major attraction of the process is that informal guidance can apparently be granted quickly. In the case of both pieces of informal guidance just granted, the Commission states that the request for guidance was first made in December 2024, meaning that the process took only about seven months.
