Digitalisation and Geo-Political Challenges Prompt New Rules In the Competition Area and Adjacent Areas
While Articles 101 and 102 TFEU are the same as in the early days of European cooperation, the rules governing their application are constantly adapted to changes in society and market behaviour. These last couple of years, the European Commission has been more active than ever, adopting new regulations and suggesting a number of legislative changes to ensure that the competition rules are fit for purpose. Through the initiatives of the Commission, new regulations have been adopted also in adjacent areas which will help ensure undistorted competition in the internal market.
New Rules on Vertical and Horizontal Restraints
In June 2022, a new vertical block exemption regulation entered into force governing the application of Article 101(3) TFEU to distribution agreements and other vertical agreements. The new rules, which provide a safe harbour for these agreements, build on the former block exemption regulation but are better adapted to a business environment reshaped by the growth of e-commerce and online sales. We present and discuss the new block exemption regulation in an article found here.
The two horizontal block exemption regulations governing R&D and specialisation agreements were also to expire and be replaced by new rules this year. In March 2022, the Commission published draft block exemption regulations together with amended accompanying horizontal guidelines. The Commission has now announced that more time is needed to fully consider the feedback received in response to the public consultation on the draft texts, which ended on 26 April 2022. It has therefore proposed to extend the validity of the currently applicable regulations, which were to expire 31 December this year. New rules are now expected to enter into force in July 2023.
Revision of the Procedural Framework
Regulations 1/2003 and 773/2004 govern the public enforcement of Articles 101 and 102 TFEU. Over the years, the Commission has carried out a number of revisions of Regulation 1/2003. While the review carried out ten years ago eventually resulted in the adoption of Directive 2019/1 governing the national competition authorities’ enforcement of the two Treaty Articles, the review that is now ongoing is expected to result in new legislation replacing Regulations 1/2003 and 773/2004. New rules are expected to enter into force mid-2024, twenty years after Regulation 1/2003 was kicked into motion.
The Commission has also announced its review of the leniency programme in order to make it more attractive, contemplating the possibilities to extend leniency also into the area of private enforcement.
Defining the Relevant Market
On 8 November 2022, the Commission presented a draft revised Market Definition Notice and invited interested parties to comment on the draft. The current notice has been in force since 1997, and in its press release, the Commission acknowledges that much has happened since then. The draft notice is supposed to reflect these changes, in particular digitalisation and new ways of offering goods and services, as well as the interconnected and globalised nature of commercial exchanges. Stakeholders are to submit their comments by 13 January 2023.
New Rules in Adjacent Areas
There is much happening also in adjacent areas. The Digital Markets Act (DMA) and the Foreign Subsidies Regulation (FSR) are two legislative pieces adopted in record time and which both have close ties to the EU competition rules. While the DMA introduces tailored obligations to ‘gatekeepers’ of the digital world, the FSR aims at tackling distortions of competition in the internal market resulting from subsidies granted by third countries to companies operating in the EU. We present and discuss the DMA in more detail here, and the FSR in more detail here.