Proposal for a Council Regulation (EC) amending Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty
C 365/30 EN Official Journal of the European Communities 26. 11. 98 concerted practices; such period must not be shorter than six months. persons claiming a legitimate interest withdraw the benefit of application of that regulation. ’ Where in any particular case agreements or concerted practices to which a regulation adopted pursuant to Article 1 applies have certain effects which are incomÜ patible with the conditions laid down in Article 85(3) of the Treaty in the territory of a Member State, or in a part thereof, which has all the characteristics of a distinct market, that Member State may on its own initiative or at the request of the Commission or of natural or legal the competent authority in Article 2 This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities. This Regulation shall be binding directly applicable in all Member States. in its entirety and Proposal for a Council Regulation (EC) amending Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty (98/C 365/07) (Text with EEA relevance) COM(1998) 546 final - 98/0288(CNS) (Submitted by the Commission on 20 October 1998) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 87 thereof, Having regard to the proposal from the Commission, Having Parliament, regard to the opinion of the European Having regard to the opinion of the Economic and Social Comittee, thereto, and the only parties thereto are undertakings from one Member State and the agreements, decisions or practices do not relate either to imports or exports between Member States, or where not more than the two undertakings are party agreements only restrict the freedom of one party to the contract in determining the prices or conditions of business upon which the goods he has obtained from the other party to the contract may be resold; whereas this exemption is not therefore such as to cover most agreements or concerted practices between undertakings each at a different stage of the economic process the supply or purchase, or both, of goods for resale or processing, or in respect of the marketing of services ("vertical agreements’), that are likely to fall within the scope of Article 85; in respect of (1) Whereas Article 4(2) of Regulation No 17Ø(˛), as last amended by the Act of Accession of Austria, Finland and Sweden, exempts a number of agreements, the concerted decisions requirement of notification under Article 4(1); practices from and (2) Whereas to agreements, decisions and concerted practices where this exemption relates in particular (3) Whereas on 22 January 1997 the Commission published a Green Paper on vertical restraints in EC competition policyØ(ˇ) which was to intended the generate a wide ranging public debate on application of Article 85(1) and (3) of the Treaty to from vertical agreements; whereas Member States, the Economic and Social Committee, the Committee of the Regions and interested parties in business and the European Parliament, the response (˛) OJ 13, 21. 2. 1962, p. 204/62. (ˇ) COM(96) 721 final. 26. 11. 98 EN Official Journal of the European Communities C 365/31 the legal professions has been generally in favour of reform of Community competition policy in this area; (4) Whereas any such reform must meet the in order to achieve in respect of firms; whereas, to declare, by regulation and two requirements of ensuring effective protection of competition and providing adequate legal certainty for these objectives, the Commission has been empowered by in the Council accordance with Article 85(3) of the Treaty, that Article 85(1) is not applicable to categories of agreements entered into by two or more underÜ takings, each operating at a different stage of the the supply or economic process, purchase, or both, of goods for resale or processing, or in respect of the marketing of services, including exclusive exclusive purchasing agreements, franchising agreements and selective distribution agreements; whereas this class of agreement does not include vertical agreements between actual or potential competitors, unless the agreement is a non reciprocal one and none of the parties have an annual turnover exceeding ECU 100 million, or is between an association of retailers and its members, or between such an association and its suppliers, and the members of the association are small or medium size enterprises as defined in the Recommendation to Annex 92/280/ECØ(˛). Commission agreements, distribution (5) Whereas the Commission was also called upon to stipulate the circumstances in which, having regard to the economic effects of the relevant agreements, a block exemption Regulation ceases to be applicable; whereas such reform of the regulatory framework applicable to vertical agreements must in addition take account of the need to simplify administrative supervision and as far as possible to reduce the number of notifications of vertical agreements, which are to less competition than horizontal restrictive practices; whereas it should no longer be necessary to notify vertical agreements before they can be exempted, so that where a vertical agreement is caught by Article 85(1) and satisfies the tests of Article 85(3) the Commission can exempt it with effect from the date on which it was entered into; considered dangerous generally 17 are dispensed (7) Whereas the agreements referred to in Article 4(2) of from the Regulation No requirement of notification prior to exemption; whereas the purpose of this dispensation is to reduce the the number of notifications, which enables Commission to concentrate its efforts on supervising those restrictive agreements which are the most damaging to competition; whereas, therefore, this amendment does not entail any relaxation in the supervision which the Commission has a duty to exercise under Article 89(1); (8) Whereas the scope of Article 4(2) of Regulation No 17 should therefore be extended, and all agreements entered into by two or more undertakings, each operating at a different stage of the economic process, in respect of the supply or purchase, or both, of goods for resale or processing, or in respect of the marketing of services, should be exempted from the requirement of prior notification, HAS ADOPTED THIS REGULATION: Article 1 Point 2 of Article 4(2) of Regulation No 17 is replaced by the following: "(2) the agreements or concerted practices relate to the supply or purchase, or both, of goods for resale or processing, or to the marketing of services, and the agreements or concerted practices are between two or more undertakings each operating at a different stage of the economic process; (2a) not more than two undertakings are party thereto, and the agreements only impose restrictions on the exercise of the rights of the assignee or user of industrial property rights - in particular patents, utility models, designs or trade marks - or of the person entitled under a contract to the assignment, or grant, of the right to use a method of manuÜ facture or knowledge relating to the use and to the application of industrial processes;’. (6) Whereas the current arrangements impose on firms which are party to vertical agreements an adminisÜ effect on trative burden which, given to be competition, has proved excessive; their in most cases Article 2 This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities. (˛) OJ L 107, 30. 4. 1996, p. 4. This Regulation shall be binding directly applicable in all Member States. in its entirety and