On June 1, 2023, the European Commission adopted two new revised Regulations on the Block Exemption of Horizontal Agreements, which will be in force from July 1, 2023, until June 30, 2035. The new regulations are labelled 2023/1066 (regulation relating to R&D, i.e., research and development agreements) and 2023/1067 (regulation relating to specialisation agreements) (“Regulations”). The new Regulations will be in force for the next 12 years, i.e., for as long as the previously valid regulations, that prescribed the rules for the same type of agreements between participants in the EU market, were in force.

As stated on the official website of the European Commission, after a detailed evaluation and examination of the existing rules carried out by the said authority during 2021 and 2022, the European Commission approved the revised Horizontal Guidelines that accompany the Regulations and facilitate their application, which will take effect after their publication in the Official Journal of the EU (“Guidelines”).

The new Regulations and Guidelines introduce the following important novelties:

• The scope of application of the regulation on the block exemption of specialisation agreements is expanded so that the revised regulation covers more types of production agreements between more market participants;
• The new Regulations introduce a more flexible approach for calculating market shares for the purposes of applying block exemptions and issue guidelines for the application of these rules;
• Clarifications are provided for the calculation of market shares that are necessary for the application of the regulation related to R&D agreements, and guidelines for their application are introduced;
• The introductory chapter of the Guidelines has been updated in accordance with the latest case law regarding potential competition, limitations by purpose and by consequence, and the like;
• In the Guidelines, a new part concerning agreements on sharing of mobile telecommunication infrastructure was added, in which the factors relevant for the assessment of those agreements and the list of minimum conditions that market participants must meet in order to reduce the risk of violating competition rules are established;
• The chapter of Guidelines concerning the agreement of participants in the production or distribution market is expanded by adding a new section on consortia participating in the bidding, as well as guidelines defining the difference in relation to bid-rigging;
• The chapter of the Guidelines on the exchange of information is being restructured and expanded in accordance with the latest judicial practice and experience gained in application;
• The chapter of the Guidelines related to agreements on standardization has been amended in order to be more flexible regarding the requirements for open participation in the standard setting procedure;
• A new chapter of the Guidelines governing sustainability agreements is introduced to clarify the fact that antitrust rules are not an obstacle to agreements between competitors in the market aiming for sustainability.

Generally speaking, under certain conditions, the Regulations exempt R&D agreements and specialisation agreements from the ban, in accordance with Article 101 of the Treaty on the Functioning of the EU (“Treaty”).

The provisions of Article 101 of the Treaty prohibit agreements between market participants that restrict competition. However, paragraph 3 of the same Article stipulates that, exceptionally, such agreements are allowed, if they contribute to the improvement of production or distribution of goods, i.e., encourage technical or economic progress, and provide consumers with a fair share of the benefits, while not preventing competition on the market between other participants.

According to the Treaty, the provisions of the Regulations themselves define which conditions agreements on R&D, i.e., specialisation must meet to be exempt from the ban, bearing in mind that agreements that can be exempted in accordance with the Regulations are characterized as those giving more benefits than harm.

Consequently, the Guidelines follow the provisions of the Regulations in order to apply the conditions prescribed by the same more correctly, whereas the Guidelines also regulate the implementation of agreements on R&D, i.e., specialisation that go beyond the “safe” area created by the Regulations, i.e., deal with the assessment of various other common types of agreements on cooperation between competitors that are not governed by the Regulations.

When it comes to the practice of the domestic antitrust authority, we can expect that the Commission for the Protection of Competition of the Republic of Serbia will continue to follow trends and adopt good practices of the EU in this regard.

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