There is a de minimis provision for agreements and practices – not including price fixing agreements – of small undertakings. It is contained in the Commission Notice on Agreements of Minor Importance (OJ C368, 22.12.01, p.13).
There are many other ways an agreement can be exempt under EU competition law. For example, there is a system of EU block exemptions, such as for vertical agreements and technology agreements.
It is also possible for an agreement to be exempt under the general exemption in Article 101 (3). This exemption applies to agreements that:
- Contribute to improving production or distribution or to promoting technical or economic progress
- Allow consumers a fair share of the resulting benefits
- Are indispensable to achieving those objectives
- Do not eliminate competition in a substantial part of the products concerned
There is also a block exemption on specialisation agreements and another on research and development agreements. Most block agreements have market share thresholds. Typically, these are below 30% market share of the relevant market.
Powers of UK and EU authorities
The CMA and European Commission investigate infringements of UK and EU law. The European Commission investigates the most serious infringements of EU competition law. The Commission’s powers of investigation are slightly wider than the CMA’s, as it is able to search private homes if it suspects that a company’s documents are stored there.
The two authorities’ powers are, however, broadly the same and can be briefly summarised as the power to:
- Ask businesses in a market to provide information in writing
- Request to enter premises without a warrant
- Enter premises with a warrant
- Request to see and take copies of any document that they consider related to any matter relevant to the investigation
- Require any person or premises to say to the best of his knowledge where any such document may be found and to provide an explanation of it
In respect of criminal cartel activity, the CMA’s powers are much wider. The CMA may gather evidence of cartel activity at any time by informal methods, including enquiries by correspondence. Once the CMA has reasonable grounds for suspecting that a criminal cartel offence has been committed, it may conduct a formal investigation under the Enterprise Act 2002.
In a formal investigation, the CMA has the power to tap telephones, use hidden cameras and use informants in addition to the power to require a person to answer questions or provide documents. To find out more, read our guide to cartel pricing activity.
Both authorities have the power to regulate mergers and acquisitions, but their powers differ depending on the type and size of such deals. The European Commission investigates and clears/refuses mergers with a European dimension. The CMA, under the Enterprise Act 2002, regulates mergers and acquisitions of the requisite size or nature in the UK. If the CMA investigates mergers initially, the case may then be referred to the European Commission.
