The Gazette 1981

GAZETTE

APRIL 1981

Four criteria must be satisfied: (1) the agreement must contribute to improving the production or distribution of goods or to promoting technical or economic progress; (2) it must allow consumers a fair share of the resulting benefit; (3) it must not impose on the undertakings con- cerned restrictions which are not indispensable to the attainment of these objectives and (4) it must not afford the undertakings concerned the possibility of eliminating com- petition in respect of a substantial part of the products in question. Exemption from the application of Article 85 may be either on an individual or block basis. Where a block exemption situation exists, the under- taking need not apply for exemption from Article 85 but merely obtains this as of right by virtue of an EEC regula- tion. To date certain exclusive distributorship agreements and certain specialisation agreements have been given block exemption. Again certain exclusive agency agree- ments fall outside Article 85. What can a business person do to ensure that an agree- ment which he suspects to be illegal, is valid under competi- tion law? He should of course, consult his lawyer. Directorate-General IV can certify that an agreement Again, an agreement which does come within Article 85, and which does not have the benefit of a block exemp- tion, may obtain a declaration by the Commission that Article 85 is inapplicable. This is called individual exemption. The same procedure applies to negative clearance and to notification to obtain an individual exemption. An application is made to Directorate-General IV on Form A/B which is obtainable either from D-G IV itself or from an EEC Commission information office. D-G IV has strong investigatory powers to discover whether restrictive agreements exist. Anyone having a legitimate interest may complain to D-G IV about the suspected existence of such an agreement. By virtue of a recent court case, D-G IV has strong powers of interim relief to avoid a situation likely to cause serious and irreparable damage to a complainant. An oral hearing may be held into a suspected infringe- ment of Article 85. Where the D-G intends to grant a negative clearance or an exemption, interested third parties may submit observations. The final decision is published. This may require the termination of an infringement of Article 85. A periodic penalty payment may be imposed by D-G IV in order to enforce such a termination. In addition, D- G IV can impose fines for intentional or negligent infringement of Article 85. This fine may be anything up to 10% of the turnover in the preceding business year of the participating undertakings. A recent record fine of UK £4,414,000 was imposed. A further form of fines — procedural fines — exists. The Court can review fines or periodic penalty pay ments. This article first appeared in 'Trade and Industry in Ireland' and is reprinted here with kind permission of the publishers. does not come within Article 85. This is called negative clearance.

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