The prohibition on restrictive agreements
The prohibition on restrictive agreements

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

  • The prohibition on restrictive agreements
  • Article 101(1) TFEU
  • Enforcement, self-assessment and consequences
  • The ‘undertaking’ concept
  • Agreements, concerted practices and decisions by association of undertakings
  • Effect on trade
  • Object or effect
  • Ancillary restraints
  • Appreciable impact on competition
  • Nullity—Article 101(2) TFEU

A key proposition underpinning EU competition law is that competing companies should act independently on markets. In principle, rivalry and competition can be expected to ensure the greatest consumer welfare, the most efficient allocation of resources and, with respect to the EU single market project, help further overall market integration.

The European Commission (the Commission) and other regulators, including national competition authorities, are therefore wary of any arrangements which might dampen competition or reduce commercial uncertainty that would otherwise exist between competitors.

At the same time, there are often legitimate reasons why companies enter into agreements that contain provisions or obligations that risk restricting competition. In particular, this will be the case where arrangements are concluded in order to generate or promote beneficial effects (efficiencies) which, absent the restriction contained in the agreements, would not arise.

EU competition law policy attempts to strike a balance between ensuring the maintenance of effective competition (in particular, by prohibiting illegitimate collusion) and the realisation of benefits derived and often only achievable through cooperation.

Article 101 TFEU provides the legal framework for achieving such a balanced assessment, taking into account the restrictive aspects brought about by co-ordination as well as any pro-competitive efficiencies generated by an agreement—ones which might otherwise balance out any identified appreciable restrictive effects.

Article 101(1) TFEU

Article 101(1) TFEU prohibits agreements and concerted practices