Ancillary restraints under Article 101(1) TFEU
Ancillary restraints under Article 101(1) TFEU

The following Competition practice note provides comprehensive and up to date legal information covering:

  • Ancillary restraints under Article 101(1) TFEU
  • Doctrine
  • Application—two steps
  • Step 1
  • Step 2
  • Balancing exercise?
  • Examples from the case law

Article 101(1) TFEU prohibits agreements which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market.

However, EU case law has confirmed that not every restriction of a party's economic freedom is necessarily a ‘restriction of competition’ within the meaning of Article 101(1) TFEU—the Court of Justice confirming that it:

'...may be doubted whether there is an interference with competition if the said agreement seems really necessary for the penetration of a new area by an undertaking.'

This observation led to the ‘ancillary restraints doctrine' with the Courts and the Commission recognising that certain restrictions should not be ‘restrictions of competition’ within the meaning of Article 101(1) TFEU where, in consideration of the 'legal and economic context', they are demonstrably necessary for protecting the legitimate interests of the parties to the agreement.

Doctrine

Inspired by the common law approach to assessing commercial restraints (ie exceptions to the rule against ‘restraints of trade’), the concept of an 'ancillary restraint' refers to ‘any restriction which is directly related and necessary to the implementation’ of a main agreement. Where such a restriction is 'subordinate' to the main agreement (and this main agreement itself is demonstrated to be non-restrictive), the restraint in question will fall outside Article 101 (1) TFEU.

This principle has been captured in

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