Wildlands Restoration Volunteers

Subcontracting Agreement Competition Law

The SBE exempts all common production and specialisation agreements (including ip and exclusive intellectual property ancillary authorisations and related common distribution obligations) between specific bodies: these limited situations proposed by the Commission could be used to justify an information exchange agreement contrary to Article 101, paragraph 1 , which is not always applicable (most information exchanges between competitors are not published) or do not reflect the sole or main reason for the exchange of information (it is not always unlikely that stronger competitors will want to explain to their less efficient competitors the reasons for their success to allow them to catch up). The Commission`s proposals highlight the difficulties in applying Article 101, paragraph 3, in this context. Competitors considering an information exchange agreement are therefore more likely to escape competition problems by ensuring that their agreement cannot be characterized as anti-competitive than to justify it as consumer-friendly. Finally, in the event of concentration, the European Commission may exempt restrictions that would otherwise be contrary to Article 101, paragraph 1. These are called ancillary restrictions and are only allowed if they are related to the conclusion of a concentration and are necessary for it. As these subsidiary clauses are considered necessary, they do not, in principle, fall within the scope of Article 101, paragraph 1. These may be clauses preventing the customer from competing with the divested business and preventing the customer from resuming his or her own services. Other examples are agreements to ensure the acquisition of a certain amount of services for a specified period of time. The European Commission has indicated that these agreements are considered ancillary income only if they are time-limited, which usually means less than five years and, in some cases, less than three years. This may not be long enough in many outsourcing situations that involve indeterminate or long-term outsourcing.

However, this does not mean that such agreements are illegal – it simply means that companies with such agreements must conduct a separate analysis of competition issues related to the agreement, in accordance with Article 81, including the review of the applicability of class exemptions and the 1978 subcontract notice and the self-assessment of a possible individual exemption under Article 101 paragraph 3. Such a review should also include additional elements that would be applicable under national competition rules. Finally, it should be noted that the Office of Fair Trading (predecessor of the British Competition and Market Authority) adopted a more favourable approach to joint purchasing in April 2010 in its succinct opinion on a joint purchase agreement between Palmer and Harvey McLane and Makro Self-Service Wholesalers (predecessor of the UK Competition and Market Supervisory Authority). In particular, the Commission pointed out that the following restrictions on the supply of technology by the contractor may also be imposed by subcontracts, without any objections to Article 85, paragraph 1: All agreements between competitors should raise the following common issues: the above provisions are also considered to be fulfilled in accordance with the notice of subcontracting where the performance of the subcontract requires the use of industrial property rights by the Subcontractor. Patents, utility models, copyrighted designs, registered designs or other rights. In any event, this applies only when technology or equipment is required to enable the subcontractor to provide the services, not where the subcontractor already has or may have access to it under reasonable conditions. One of the examples cited in the contracting notice as “eligible restriction” that is not an objection under the section