Germany: The Commission’s Informal Guidance Notice: A Way To Alleviate The Risks Of Antitrust Self Evaluation Under The New EC Competition Procedure Rules?

Regulation (EC) 1/20031 ("Regulation 1/2003") which will enter into force on 1 May 2004 brings about a fundamental reform to the procedural rules of European Competition Law. The changes place the burden of assessing whether an agreement is compatible with competition law entirely on undertakings and associations of undertakings and, at the same time, entitles national competition authorities and courts to comprehensively apply the competition rules of Articles 81 and 82 EC Treaty ("EC"). In order to provide the companies with support in the application of and operating on the new system, on 1 October 2003 the Commission has published its "Modernisation Package" relating to Regulation 1/2003. The package includes, inter alia, a Draft Notice on Informal Guidance2 which envisages an informal consultation of the Commission in cases of novel or unresolved questions. The Notice is designed to overcome cases of legal uncertainty resulting from the new system of self-evaluation.

The following article shall provide companies with an overview of the implications of the new system of self-evaluation with a particular view to the Draft Notice on Informal Guidance.

Practical Implications of the New System of Legal Exemption

Regulation 1/2003 only marginally affects the application of European competition law to agreement on the merits. The main effects of Regulation 1/2003 for the daily business of companies are of a practical and procedural nature: The increased risk of companies to act in violation of competition law because they incorrectly assessed their agreements under Article 81 EC, in particular Article 81 para. 3 EC. This aspect involves a two-fold element:

  • First, the new responsibility of self-evaluation of the law (below 1.) and
  • Secondly, the new responsibility of self-evaluation of the facts (below 2.).

With regard to the problem of self-evaluation of the law, except for the Draft Notice on Informal Guidance, the Commission has issued draft guidelines on the application of Article 81 para. 3 EC3 which explain in more detail the concept and the requirements of Article 81 para. 3 EC.

The New Responsibility of Self-Evaluation of the Law - Draft Notice On Informal Guidance

Regulation 1/2003 causes an actual change only in cases, where an agreement restrictive of competition is potentially not exempted from the prohibition of Article 81 para. 1 EC by virtue of a block exemption regulation and therefore does not benefit from this safe harbour. Where companies until now were able to obtain legal security, whether their agreement was in compliance with competition law by way of notifying the agreement to the Commission, from 1 May 2004 on, they have themselves to bear the entire risk of assessment.

The Counsel and the Commission believe that the companies are themselves generally well placed to assess the legality of their actions and to decide whether to go ahead with an agreement or conduct. Among the reasons for this assumption are the block exemption regulations, notices and guidelines published by the Commission which further assist the self-assessment of the companies. However, the Counsel and Commission also acknowledge that despite these elements, there might be situations of genuine uncertainty because they present novel or unresolved questions. In these situations Recital 38 Regulation 1/2003 grants companies the right to seek informal guidance from the Commission and receive an informal guidance letter. The Draft Notice on Informal Guidance ("Draft Notice") further substantiates this right.

Pre-Requisites for the Issuance of a Guidance Letter

According to the Draft Notice, the Commission will issue a guidance letter if the following cumulative conditions are met:4

  • The assessment of an agreement, decision or practice poses a "novel" or "unresolved" question, that is a question of application for which there is no clarification in the existing EC legal framework or publicly available general guidance nor precedent in case law, decision-making practice or previous guidance letter.
  • A first preliminary assessment by the Commission must lead to the conclusion that the clarification of the novel question through a guidance letter is "useful" in view of the economic importance of the agreement from the consumer point of view and with regard to the involved companies and their size.
  • The companies have comprehensively presented the information necessary to issue the guidance letter.
  • The question must relate to an agreement or practice, which is either applied or envisaged, provided that for an envisaged agreement or practice this has reached a sufficient degree of substantiation.

In contrast, a guidance letter will not be issued if the questions raised are identical or similar to questions pending in a case before the Commission, the Court of First Instance or the Court of Justice.5

Processing of a Request and Content of Guidance Letters

The Commission will in principle assess the question on the basis of the information in the request or upon later provision of information by the parties or own data. It may discuss the request with the Member States’ competition authorities respecting confidentiality. The information supplied with the request will remain with the Commission, even if the companies withdraw the request.6

If the requirements for a issuance of a guidance letter are fulfilled and the Commission has examined the question, the guidance letter will set out a summary description of the facts on which it is based and the principal legal reasoning of the Commission. It will be published on the Commission website.7

Effects of a Guidance Letter

A guidance letter does not prejudge an assessment of Community courts and does not preclude the Commission from or bind it in subsequent assessments. The Commission may for instance newly assess the agreement under a complaint received from a third party. Unless the complaint presents new aspects or developments, the Commission will, however, take into account the guidance letter. As a matter of fact the guidance letter does not bind the Member States’ authorities or courts.


An informal guidance letter might be helpful to get a "first feeling" of how the Commission assesses a certain case. 

However, it also includes some drawbacks and pitfalls:

  • It includes strict conditions under which it is issued.
  • In the absence of a binding nature on the Commission it provides legal certainty only to a limited extent and no legal certainty for future developments.
  • In the process of the analysis of the agreement or practice the Commission might inform national authorities about the agreement or practice and the guidance letter will be published.
  • From its nature the guidance letter cannot take into account future developments.

In conclusion, the guidance letter may be a useful instrument in certain situations, in particular in cases involving new and complex legal issues. The instrument has, however, certain deficiencies as described above, so that it does not suit all situations.

The New Responsibility of Self-Evaluation of the Facts – Effects on the Conclusion and Practising of Agreements

As seen above, the Draft Notice alleviates the risk of self-evaluation of the companies only to some extent. Besides, in any case it cannot do away with the risk of the factual self-evaluation: In order to carry out the legal self-evaluation of agreements which contain clauses restrictive of competition, the companies, beforehand, have to undertake a comprehensive factual analysis of their market position and the market position of their contractual partners on the relevant market. Only then can the parties estimate whether their agreement might be critical from a competitive point of view, whether any restraints of competition are appreciable under Article 81 para. 1 EC, whether the agreement meets the market share thresholds of a block exemption regulation and the like.

Till now, the parties had to disclose their market data under a form AB notification at least to the Commission which could conduct further investigation in case of doubts before issuing a decision. However, from 1 May 2004 on, the companies themselves have to analyse their agreement on the basis of their market data and, even more problematic, the market information provided by their contractual partners. As there is no duty to notify the agreement, it can be assumed that the contractual parties will be less willing to provide the necessary information and to analyse these. This problem can be conceived particularly in situations of vertical agreements, since one party usually does not have knowledge of and free access to the market data of the other party.

Particularly in cases of important agreements with parties which have a significant market position, it could therefore be advisable to let the other party contractually ensure its market position. It seems recommendable to include provisions

  • securing the market position present at the conclusion of the agreement and
  • during the exercise of the agreement as well as
  • to regulate the consequences of a relevant change of the market position during the course of the agreement.

Market Position at the Time of the Agreement Coming Into Effect

In order to secure the market position of the other party as provided by it, one party could for example include

  • an independent warranty that the contractual partner has a certain market position (for instance a position, which meets the requirements for an exemption under a block exemption regulation or under guidelines) or
  • the obligation to communicate the market data, which are relevant to the agreement and a guarantee that the market analysis has been carried out in a sufficiently comprehensive way and correct as to one’s best knowledge.

Market Position during the Course of the Agreement

It will also be more important in future to investigate the market development during the course of a restrictive agreement. In order to have oneself secured vis-à-vis the contractual partner, one might include into the agreement the duty of the other party to constantly analyse the market and to immediately notify the other party in case that a relevant change of the market is perceived. A breach of such duty could be sanctioned under an ordinary liability clause or by contractual penalties.

Consequences of Market Changes

In order to react to relevant changes of one’s market situation one could insert the following provisions:

  • Express clauses to adapt the agreement (such as the replacement of an exclusive licence by a non-exclusive license in case of a specific development of the market);
  • A right of termination, possibly combined with a duty to newly negotiate either the entire agreement or the clause restrictive of competition;
  • A provision that the agreement is automatically terminated, if because of a change of the market situation the agreement does not meet the requirements for an exemption anymore.

If and which measures are useful to minimize the risk, is, as a matter-of-course, contingent on the individual circumstances. In any case, in future, the parties to an agreement should take into account the importance of their market position and the development of their market position for their agreement to be compatible with competition law. They should, depending on the case, also secure themselves by liability clauses or other means.


1 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ 2003 L 1/1; see already Schmidt, Antitrust Quarterly, Issue 2, p. 25.

2 Draft Commission Notice on informal guidance relating to novel questions concerning Article 81 and 82 of the EC Treaty that rise in individual cases (guidance letters), available at:

3 Communication from the Commission, Draft Notice, Guidelines on the application of Article 81(3 of the Treaty; available at: See also the Article of Jens-Peter Schmidt in this Antitrust Quarterly.

4 Draft Notice on Informal Guidance, Sections 9, 11.

5 Draft Commission Notice on Informal Guidance, Section 10.

6 Draft Commission Notice on Informal Guidance, Sections 16 to 19.

7 Draft Commission Notice on Informal Guidance, Sections 20 to 22. 

Copyright © 2007, Mayer, Brown, Rowe & Maw LLP. and/or Mayer Brown International LLP. This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Mayer Brown is a combination of two limited liability partnerships: one named Mayer Brown LLP, established in Illinois, USA; and one named Mayer Brown International LLP, incorporated in England.

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