2 ‘By object’ restrictions in agreements between competitors

The three classical ‘by object’ restrictions in agreements between competitors are price fixing, output limitation and market sharing (sharing of geographical or product markets or customers).

However, restrictions of that kind may not constitute restrictions ‘by object’ where they are part of a wider cooperation agreement between two competitors in the context of which the parties combine complementary skills or assets. For example, in the context of production agreements, it is not considered a ‘by object’ restriction where the parties agree on the output directly concerned by the production agreement (for example, the capacity and production volume of a joint venture or the agreed amount of outsourced products), provided that other parameters of competition are not eliminated. Another example is a production agreement that also provides for the joint distribution of the jointly manufactured products and envisages the joint setting of the sales prices for those products, and only those products, provided that the restriction is necessary for producing jointly, meaning that the parties would not otherwise have an incentive to enter into the production agreement in the first place. In those scenarios the agreement on output or prices will not be assessed separately, but will be assessed in the light of the overall effects of the entire production agreement on the market.1.