Horizontal Co-operation - R&D Agreements in European Competition Law
Abstract: EC competition rules are in a phase of transition. The Commission has put forward some documents in order to modernise the EC competition rules, such as the proposal for a new Regulation amending Regulation 17/62. The Regulation presides over the enforcement of EC competition rules. The objectives of the proposed reform are to strengthen the enforcement of the competition rules, promote effective supervision and simplify the administrative procedure. The new rules would create a decentralised system of enforcement, where the authorities of the Member States would have increased power. With the aim of simplifying the administrative procedure, the compulsory system of notification would be abolished. EC competition rules apply to horizontal co-operation agreements. These agreements initially restrict competition due to the fact that the agreements are concluded between competitors. Horizontal co-operation agreements are frequently concluded in the area of research and development (R&&semicD). R&&semicD and innovation are of greatest importance for the economy and competitiveness of Europe. These activities lead to increased social welfare and economic growth. Nevertheless, it is difficult to provide undertakings with the incentive to invest in R&&semicD and innovation, because of the uncertainty and risk-taking it involves. Consequently, collaboration between undertakings must be allowed. The Commission has recognised the necessity of having undertakings engaging in R&&semicD and innovation. It has assumed a more economic approach towards co-operation in these matters. Correspondingly, it has adopted a new block exemption Regulation and complementary guidelines in the subject of co-operative R&&semicD agreements. The new Regulation entered into force the first of January 2001 and introduces several important amendments. The guidelines refer not merely to R&&semicD agreements, but cover also other forms of competitors' collaboration and present the general approach towards horizontal co-operation agreements. The new rules represent an important pillar in the overall modernisation of the EC competition rules. Their success is however dependent on whether they will be effectively applied. EC competition rules and the administrative system are certainly in need of modernisation. The restriction and rigidity of the rules result in less R&&semicD and innovation. As follows, the European undertakings can not keep up with their world-wide competitors in high technology areas, which causes slow economic growth, increasing inequity and unemployment. This trend has to change. By adopting a more economic approach when modernising the EC competition framework - with emphasis on R&&semicD and innovation - the Commission contributes to the alteration of this trend.
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