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Check the competition smallprint

16 Mar 2011

Many agreements between terminal operators and users may contain exclusivity provisions but these do not, themselves have as their object the restriction of competition; they must be examined in their legal, factual and economic context in order to determine whether they have such an effect.

On balance, a wide range of factors must be taken into account in deciding whether an exclusivity arrangement falls within Article 101(1) of the Treaty on the Functioning of the European Union ("TFEU"). These include the novelty or technical complexity of the service to which the agreement relates, the level of investment and commitment the operator is expected to undertake (in a user exclusivity context), and the strength of the undertakings on the market for the service involved.

The EU vertical agreements block exemption will apply to agreements containing these kinds of clauses provided the terminal operator's and the terminal user's respective market shares do not exceed 30% and that they are not combined with any "hardcore" restrictions prescribed by Article 4 of the block exemption.

It is therefore only where the agreement as a whole does not benefit from the block exemption that the question of the application of Article 101(1) of the TFEU to such clauses is an important issue; there is no presumption of illegality in such cases. 

This is a complex area of the law and specialist legal advice is recommended.




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