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Chapter 3 Exemption Under Article 101 Notes

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Chapter 3

Chapter 3 Exemption under Article 101(3) NOTES 1 Introduction

An agreement that is caught by Article 101(1) may nevertheless escape prohibition (and therefore voidness) under Article 101(3).

There are 2 types of exemption: Individual exemption

Block exemption

These exemptions relate to a specific agreement.

"Block exemptions" are contained in regulations issued by the Commission (some cases, by the Council).

Before 1 May 2004: Commissions only able to grant an individual exemption for an agreement which had been notified to it (except for a limited category of agreements).

Were introduced for certain types of agreement to reduce the burden on both companies and the Commission of making and dealing with separate applications for individual exemption.

These exemptions were granted for a limited duration (i.e. 10 years) and subject to conditions. Eg. Requiring that both parties had access to the technology on termination of the agreement.

If an agreement meets the conditions set out in the relevant block exemption regulation, it is automatically exempt from Art 101(1) without (in most cases) the need to notify it to the Commission.

From 1 May 2004: with entry into force of Regulation 1/2003, it abolished the system of advance notification and approval of agreements.

Block exemption system was not affected by Regulation 1/2003.

Agreements that satisfy the Art 101(3) conditions for exemption are valid from the outset. The Commission, national courts and national competition authorities all have the right to apply the criteria set out in Art 101(3) when determining whether an agreement is prohibited under Art 101.

In contrast to the old position, therefore, agreements caught by Art 101(1) are void and unenforceable only to the extent that Art 101(3) is found not to apply (Articles 1 and 2, Regulation 1/2003).



Chapter 3

2. Roles of the Commission, national courts and national competition authorities

The individual roles of the Commission, national courts and national competition authorities in applying Article 101(3), as well as the transitional measures in Regulation 1/2003, are considered below. In preparation for entry into force of Regulation 1/2003, in April 2004, the Commission published a number of Notices explaining how the regime now works.

Role of the Commission

Role of national courts

Role of national competition authorities


have powers to adopt + publish block exemptions. Existing block exemptions remain in force.




Art 10, Regulation 1/2003- Commission has a power to decide that Article 101 does not apply to an agreement (if it is not fall under Article 101(1) /
Article 101(3) applies) if there is an EU public interest in such a finding. National courts +
competition authorities are bound by such Commission's decisions.

Art 6, Regulation 1/2003; have the power to determine whether an agreement escapes prohibition because it fulfils the criteria in Art 101(3) on an individual basis. National courts are still bound by block exemptions, and may not find that an agreement is void under Art 101(2) if it meets the conditions for block exemption.

Art 5, Regulation 1/2003: were granted powers to apply Article 101 on their own initiative or in response to complaints (purpose of such reform: to encourage complaints to national authorities instead of the Commission).


They have the power to:

Art 16(1), Regulation 1/2003: If an agreement is already the subject of an individual Commission decision, national courts may not take a decision that runs counter to the existing decision. If an agreement is subject to ongoing Commission proceedings, national courts must avoid taking any decision that would conflict with a decision contemplated by the Commission



Art 10 was intended to be declaratory decisions saved for exceptional circumstances because:

this type of decision only where "the EU public interest" so requires; and

Neither a notice, nor a specified procedure or form has been suggested for Art 10 decisions.


Commission has not used its powers under Art 10 to date.


Commission launched a public consultation on the functioning of Regulation 1/2003 in July 2008, canvassing views from stakeholders on all aspects of its implementation in practice, including Article 10. It provides legal certainty if the Commission did adopt decisions under Art


Require that any infringement of Article 101 be brought to an end. Order interim measures. Accept commitments. Impose fines and penalties.


Art 29(2), Regulation 1/2003: national authorities can decide whether an agreement fulfils the criteria in Art 101(3) on an individual basis. National authorities are bound by block exemptions, but may withdraw the benefit of a block exemption in their national territory if that territory has all the characteristics of a distinct geographic market.


Art 16(2), Regulation 1/2003: When considering an agreement that is already the subject of a decision by Commission, national authorities may not take decisions contrary to Commission decision. National authorities may not apply Art 101 to an agreement in relation to which Commission has initiated formal proceedings.

Art 2, Regulation 1/2003: The burden of proving that an agreement is caught by Art 101(1) lies on the party alleging that the agreement infringes Article 101; the burden of proving that an agreement escapes prohibition under Art 101(3) lies on the party seeking to rely on Art 101(3).


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