The new EU regime for horizontal agreements: the new Research and Development Horizontal Block Exemption Regulation

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.

R&D agreements under EU law

The EU Research and Development Block Exemption Regulation (R&D BER) aims at providing companies with the legal certainty they need to collaborate in the development of products, technologies, and processes and in the exploitation of the outcome of that collaboration.

The objective of the block exemption is to foster the innovation and development flowing from the cooperation between companies in the EU. At the same time, it also strikes a balance between that objective and the protection of fair competition in the internal market.

The new EU rules applicable to R&D agreements

The new version of the R&D BER introduces a series of developments from the previous version, dating back to 2011. It does not introduce groundbreaking innovation but rather clarifies the scenarios where that exemption applies and the requirements to benefit from it. The new R&D BER entered into force on July 1 and will be applicable for the next seven years.

The changes have been introduced in the light of the feedback received during the assessment process of the previous R&D BER. Stakeholders, and especially SMEs, have expressed their concerns over the obscurity of the previous Block Exemption, which oftentimes discouraged them from entering in this sort of agreements. The new R&D BER focuses on providing those companies with faster decision-making through an easier assessment of their compliance with the criteria therein. This is expected to stem from the new structure and the definition of key concepts, which seek enhanced clarity and coherence. At the same time, the concerns of the enforcement community have also been taken in consideration.

All the above-mentioned factors have resulted in the introduction of the following novelties:

• New powers granted to the European Commission and the National Competition Authorities.

The authorities will from now on be empowered to withdraw the benefit of the block exemption in individual cases of special concern, specifically where such an agreement “would substantially restrict innovation competition in a particular field” (Articles 10 and 11). The R&D BER provides some examples where this could happen.

• Simplification of the transitory period of application in cases where the parties to an exempted agreement cease to meet the conditions required (Article 6(5)).

This is the case where the parties to an exempted R&D agreement that initially were below the market share threshold end up exceeding it at a later stage. The method for calculation of market shares has also been simplified (Article 7).

• The consequences resulting from the inclusion of excluded restrictions in exempted agreements have also been clarified (Article 9). In such a scenario, the exemption will continue to apply “provided that the excluded restrictions can be severed from that remaining part”.

For more information, please contact Morten Nissen or Ignacio Villalba Navarro.

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