1 Finding guidance on restrictions of competition ‘by object’

The Commission's De Minimis Notice1. provides a safe harbour for agreements between undertakings which the Commission considers to have non-appreciable effects on competition. This safe harbour applies on condition that the market shares of the undertakings concluding those agreements do not exceed the market share thresholds set out in that Notice and provided that the agreements do not have as their object to restrict competition. For the purposes of the application of the De Minimis Notice, hardcore restrictions listed in the Commission block exemption regulations are generally considered to constitute restrictions by object.2. Therefore, agreements containing restrictions listed as hardcore restrictions in any current or future Commission block exemption regulation cannot benefit from the market share safe harbour set out in that Notice.3.

Article 101(1) of the Treaty on the Functioning of the European Union (the Treaty) prohibits agreements between undertakings which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market.4. The distinction between ‘restrictions by object’ and ‘restrictions by effect’ arises from the fact that certain forms of collusion between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition.5. Restrictions of competition ‘by object’ are those that by their very nature have the potential to restrict competition. These are restrictions which in the light of the objectives pursued by the Union competition rules have such a high potential for negative effects on competition that it is unnecessary for the purposes of applying Article 101(1) of the Treaty to demonstrate any actual or likely anti-competitive effects on the market. This is due to the serious nature of the restriction and experience showing that such restrictions are likely to produce negative effects on the market and to jeopardise the objectives pursued by the EU Union competition rules.

In order to determine with certainty whether an agreement involves a restriction of competition ‘by object’, regard must, according to the case law of the Court of Justice of the European Union, be had to a number of factors, such as the content of its provisions, its objectives and the economic and legal context of which it forms a part.6. In addition, although the parties' intention is not a necessary factor in determining whether an agreement restricts competition ‘by object’, the Commission may nevertheless take this aspect into account in its analysis.7.

The types of restrictions that are considered to constitute restrictions ‘by object’ differ depending on whether the agreements are entered into between actual or potential competitors or between non-competitors (for example between a supplier and a distributor). In the case of agreements between competitors (horizontal agreements), restrictions of competition by object include, in particular, price fixing, output limitation and sharing of markets and customers. As regards agreements between non-competitors (vertical agreements), the category of restrictions by object includes, in particular, fixing (minimum) resale prices and restrictions which limit sales into particular territories or to particular customer groups.8.

The fact that an agreement contains a restriction ‘by object’, and thus falls under Article 101(1) of the Treaty, does not preclude the parties from demonstrating that the conditions set out in Article 101(3) of the Treaty are satisfied. However, practice shows that restrictions by object are unlikely to fulfil the four conditions set out in Article 101(3).9.

In exceptional cases, a restriction ‘by object’ may also be compatible with Article 101 of the Treaty not because it benefits from the exception provided for in Article 101(3) of the Treaty, but because it is objectively necessary for the existence of an agreement of a particular type or nature or for the protection of a legitimate goal, such as health and safety, and therefore falls outside the scope of Article 101(1) of the Treaty.10.

Types of practices that generally constitute restrictions of competition ‘by object’ can be found in the Commission's guidelines, notices and block exemption regulations. These refer to restrictions by object or contain lists of so-called ‘hardcore’ restrictions that describe certain types of restrictions which do not benefit from a block exemption on the basis of the nature of those restrictions and the fact that those restrictions are likely to produce negative effects on the market. Those so called ‘hardcore’ restrictions are generally restrictions ‘by object’ when assessed in an individual case. Agreements containing one or more ‘by object’ or hardcore restrictions cannot benefit from the safe harbour of the De Minimis Notice.

For the purpose of assisting undertakings in their assessment of whether agreements can benefit from the market share safe harbour of the De Minimis Notice, this document lists the restrictions of competition that are described as ‘by object’ or ‘hardcore’ in the various Commission regulations, guidelines and notices, supplemented with some particularly illustrative examples taken from the case law of the Court of Justice of the European Union and the Commission's decisional practice.11.

This document is without prejudice to any developments in the case law and in the Commission's decisional practice. It does not prevent the Commission from finding restrictions of competition by object that are not identified below. DG Competition intends to regularly update the examples listed below in the light of such further developments that may expand or limit the list of restrictions ‘by object’.