European Commission Consultation On Reform Of Block Exemption Regulation And Guidelines For Technology Transfer Agreements

Summary

• The existing Technology Transfer Block Exemption Regulation (TTBER) is under review with revised rules to enter in force on May 1, 2026. The TTBER exempts many forms of agreements between competitors relating to technology transfers from the prohibition of restrictive agreements under Article 101(1) of the Treaty on the Functioning of the European Union (TFEU).
• The public consultation is now open for interested parties to submit views on any changes that may be needed to make the TTBER more effective, including (i) widening the scope of the TTBER to include data licensing, (ii) adjustments to the market share thresholds, and (iii) changes to clarify the availability of the TTBER for Technology Pools and Licensing Negotiation Groups.
• The deadline for responses to the consultation is April 25, 2025. Please reach out to Steptoe's European Competition group to discuss how these changes may affect your business and to support you in making a submission to the European Commission.

Introduction

Technology transfer agreements can improve economic efficiency by facilitating the diffusion of technology, incentivizing research and development, promoting incremental innovation and generating competition in product markets. In many cases, such agreements either do not restrict competition, i.e. they fall outside the scope of Article 101(1) TFEU, or they may create efficiencies that are passed on to consumers and meet the four cumulative conditions of Article 101(3) TFEU. However, they can also have negative effects on competition. In particular, they may facilitate collusion, restrict the ability of competitors to enter or expand in the market, or harm inter- or intra-technology competition, for example by reducing the incentives to innovate.

The European Commission (Commission) is empowered to adopt block exemption regulations, which define categories of agreements for which it can be presumed with sufficient certainty that they fulfill the conditions of the exemption. The Commission has made use of this empowerment to adopt the TTBER, which declares that Article 101(1) TFEU does not apply to certain categories of technology transfer agreements. The TTBER entered into force on May 1, 2014 and will expire on April 30, 2026.

The current consultation, which was opened on January 31, 2025, is the next step towards the adoption of revised rules taking effect on May 1, 2026. The results of the preliminary evaluation of the TTBER and the Guidelines, conducted by the Commission last year, suggest that these instruments have overall met their objectives and remain largely relevant. In particular, they ensure that only agreements that meet the conditions of Article 101(3) TFEU are block-exempted, and that companies are able to self-assess the compliance of their technology transfer agreements with adequate legal certainty. However, certain developments since 2014 have raised questions about the continued effectiveness and relevance of these rules. According to the Commission:

1. Data Related Technology Transfers

The increased importance of data resulting from digitization of the economy has made the licensing of data and/or rights in data more common. Moreover, technology transfer agreements increasingly contain provisions relating to data. However, the current rules do not cover data licensing and do not provide guidance on provisions in technology transfer agreements relating to data.

The Commission now seeks views from stakeholders about whether this gap might be addressed by widening the scope of the TTBER by expanding the definition of technology rights to include certain categories of data or rights in data and provide further guidance in the Guidelines. Alternatively, the issue may only be addressed in the Guidelines without amending the TTBER.

2. Market Share Thresholds

Practical difficulties for companies when applying the market share thresholds in the TTBER may lead to uncertainty about whether their agreements are covered by the block exemption. This results notably from a lack of available information about the applications for which the licensed technology will be used, or about the substitutability or the market shares of third-party technologies, particularly in dynamic markets characterized by a high degree of innovation. Similar difficulties may affect the soft safe harbor provided in the Guidelines, which is based on the existence of at least four independently-controlled technologies that are substitutable for the licensed technology.

The Commission now seeks views from stakeholders about whether the TTBER should be amended by removing the market share threshold for relevant technology markets, leaving only the threshold for relevant product markets, or by replacing the current market share threshold for technology markets, for example with a condition based on the existence of a certain number of other independently controlled technologies that are substitutable for the licensed technology, similar to the soft safe harbor currently provided in the Guidelines. Related guidance would be provided in the Guidelines. Alternatively, the issue may only be addressed in the Guidelines without amending the TTBER.

3. Technology Pools and Licensing Negotiation Groups

The conditions of the soft safe harbor provided in the Guidelines for the establishment and operation of technology pools may not be fully effective in ensuring that only technology pools that fall outside the scope of Article 101(1) TFEU benefit from the safe harbor.

Licensing negotiation groups (LNGs) bring together technology implementers that wish to negotiate technology licenses jointly. Under certain conditions, LNGs can create efficiencies, notably by reducing transaction costs, but can also raise competition concerns, for example they may lead to downstream collusion between the participating implementers. However, the rules do not currently provide guidance on the competition law assessment of LNGs.

To address these gaps, the Commission now seeks feedback from stakeholders about the possibility to revise the Guidelines, in particular to explore whether the conditions of the soft safe harbor for technology pools the Guidelines should be modified and whether guidance should be provided for the assessment of LNGs.

Outlook

In addition to the above changes, the reform of the TTBER and Guidelines will likely also incorporate recent case law of the EU Courts, e.g. in relation to patent litigation settlement agreements and pay-for-delay agreements. Furthermore, the Commission intends to align, where appropriate, certain provisions of the TTBER with equivalent provisions of the recently revised block exemption regulations for vertical agreements and for horizontal agreements.

The Commission will also explore the possibility of simplifying the rules where possible, in particular in areas where stakeholders may raise issues of complexity or lack of clarity during the evaluation, e.g. regarding potential competition, field of use restrictions, and the definition of know how.

All interested parties are invited to submit comment on the above issues until April 25, 2025. On the basis of all input received, also from national competition authorities and external experts to be appointed in the course of the process, the Commission intends to publish a draft revised TTBER and draft revised Guidelines for another public consultation in the summer of 2025.

Once the new rules will start to apply in 2026, current technology transfer agreements which last beyond the expiry of the current TTBE and internal market share estimates may need to be re-assessed by the market players.