The new EU regime for horizontal agreements: How to deal with information exchange

1. Introduction

The review of the EU horizontal agreements regime has brought significant changes also for the exchange of information between competitors and/or third parties. On 1 June 2023, the European Commission adopted revised Horizontal Block Exemption Regulations on Research and Development and Specialisation agreements (HBERs), accompanied by revised Horizontal Guidelines (Guidelines). The revised HBERs and Guidelines provide clarity and up-to-date guidance in assessing the compatibility of horizontal cooperation agreements within EU competition rules.

The chapter on information exchange in the revised Horizontal Guidelines (i.e., Chapter 6) has been amended to reflect the most recent case law and experience in enforcement as well as the technological developments allowing for new methods through which information can be exchanged. 

In previous years, the European Commission (the Commission) has considered several cases of information exchange as constituting prohibited restrictions of competition by object, in particular, exchanging information with competitors on:

  • current pricing and future intentions;
  • current and future production capacities;
  • current and future commercial strategy;
  • forecasts relating to current and future demand;
  • forecasts of future sales data, and
  • future product characteristics relevant for consumers.

The Commission is thus consistent in blacklisting exchanges of information on future market conduct as “by object” restrictions given that the unpredictability of competitor’s behaviour is the very gist of market competition protected under Art. 101 and 102 TFEU. However, the exchange of other information may produce anticompetitive effects depending on the nature of such information, its (dis)aggregation, age, pattern of exchange (direction, frequency) or market characteristics.

2. The new Horizontal Guidelines

The approach followed by the Commission shows a greater sensibility for the concrete development of business relations and the importance that information exchange plays in this respect, especially considering recent market trends in the digital sphere.

While acknowledging that “information exchange is a common feature of many competitive markets and may generate various types of efficiency gains, as well as potentially solving problems of information asymmetries, thereby making markets more efficient” the Commission (as already foreseen in the previous version of the horizontal guidelines) reiterates that “the exchange of market information may also lead to restrictions of competition, in particular in situations where it is liable to enable undertakings to be aware of market strategies of their competitors”. Consequently, the object or effect of the information exchange may risk giving rise to conditions of competition that do not correspond to the normal conditions of the market in question.

Unlike other chapters of the Guidelines, the Commission has not introduced any safe harbours in the revised chapter related to information exchange.

Similarly to the approach followed when reviewing the Vertical Guidelines (according to which information exchange is subject to a case-by-case assessment (especially when it comes to dual distribution systems) in order to assess that the exchange is either not directly related to the implementation of the vertical agreement or is not necessary to improve the production or distribution of the contract goods or services or both) the revised Horizontal Guidelines do not provide for an ex-ante exemption of information exchange based on pre-fixed criteria (e.g., the minimum age of the exchange of information or on the frequency of the exchange).

This is because the sensitivity of the information is subjective and may depend on several (different) factors, which necessarily require a case-by-case assessment. Whether information is commercially sensitive depends on its usefulness to competitors. In general, information relating to competitors’ future conduct regarding prices or quantities is particularly likely to lead to a collusive outcome, however, other types of information are also able to reduce strategic uncertainty as to the future operation of the competitors. Therefore, companies involved in horizontal cooperation should always check if the level of detail is indispensable given the specific characteristics of the relevant market, (e.g., its transparency, its degree of concentration, presence of barriers to entry or expansion).

It follows that the scope of the revised Guidelines is now wider, as it covers both traditional information exchange as well as digital ways of information and data sharing. Therefore, the nature of the information exchanged and the ways in which it is exchanged are now enriched by new scenarios, although the principles and evaluation criteria already present in the previous Guidelines are consistently applied and the enforcement practice has not been amended. 

3. Practical measures recommended by the Commission 

The most significant aim pursued by the Guidelines is to support companies by providing them with the following measures:

(i) self-assessment guidance relating to the new information sharing techniques of indirect disclosure, big data, and machine learning . The Commission also sets out the potential pro-competitive effects of information exchange (which in any event “must be demonstrated, relevant, specifically related to the exchange of information concerned and sufficiently significant to justify a reasonable doubt as to whether the exchange causes a sufficient degree of harm to competition”).

(ii) practical mitigating measures to avoid infringements of EU antitrust rules. Among these measures, it is worth noting that the new Guidelines institutionalised the use of “clean teams” for the exchange of information between competitors. The use of “clean teams” stems from the practice of information exchange in the context of mergers (see the Commission merger decision in the case Altice / PT Portugal). However, the Guidelines explain that “clean teams” or independent third parties (such as trustees) can be used to better control the exchange of information in any context and not only for the purposes of M&A transactions. Admittedly, the clean team structure can be applied to any form of horizontal cooperation, e.g., production agreement, bidding consortium or purchasing alliance.

Against this background, and to provide companies with more legal certainty when it comes to information exchange, the Commission further elaborated its guidance and included new measures that companies may adopt to reduce the risk of breaching Article 101 (1) TFEU. In practice, companies are encouraged to:

  • Limit the information exchange to what is strictly necessary to implement the cooperation agreement;
  • Limit the scope of data-sharing arrangements to final and aggregated information;
  • Review the agenda of sensitive meetings with competitors or potential competitors in advance and ask lawyers to attend.

The Commission’s guidance assumes that where a company receives commercially sensitive information from a competitor, that company will be presumed to take account of such information. Therefore, if a company receives commercially sensitive information because of the unilateral disclosure of information (for example, via (chat) messages, emails, phone calls, input in a shared algorithmic tool, meetings, etc.), the company must publicly distance itself from the disclosure. The company should inform the ones responsible for the disclosure that it does not wish to receive such information. When assessing if a company has distanced itself, the Commission would focus on the understanding held by the other participants in the exchange regarding the intentions of the distancing company.

Companies should also take measures to limit the risks of disclosing commercially sensitive information in public. The companies should carefully check whether the information serves the legitimate purpose intended and whether the level of detail of the disclosure is required for that purpose. To illustrate that point, the Commission provides an example, in which companies unlawfully disclose their planned pricing strategy and condition that strategy on how competing companies in a given sector will act.

Eventually, if the parties to the horizontal cooperation decide to pursue their project within the joint-venture corporate structure, they should be aware that the antitrust rules on horizontal cooperation still apply. If such JV establishment is notifiable, the merger clearance does not free the parties from the obligation to check their cooperation model against possible antitrust risks, including the limitations on information exchange.

For more information, please contact Federico Marini Balestra, Nicola Ceraolo, Lucia Antonazzi, Chiara Horgan, Marcin Alberski, Szymon Golebiowski and Stanislaw Szymanek

Webinar: Do’s & don’ts for cooperating with competitors – the new EU rules

On 14 September 2023 at 13h CET, join us for an informative webinar on the new Horizontal Block Exemption Regulations, hosted by Lexology.


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