COMPETITION • EUROPEAN LAW • RESTRICTIVE AGREEMENTS
In European law, the notion of ancillary restraint refers to any restraint that is directly related and necessary to the implementation of a main transaction which itself is not anticompetitive. Necessity is assessed objectively and involves the application of a proportionality test. According to the Court of Justice, the main operation must be impossible to carry out not simply more difficult to implement or less profitable without the ancillary restraint. A restriction of competition implemented several years after the main agreement was concluded, and not in the agreement itself or upon its conclusion, cannot therefore be regarded as ancillary to that agreement.
The duration, subject-matter and geographical scope of application should not exceed what the implementation of the main operation reasonably requires. Thus, a non-compete clause, which is necessary for the transfer of the commercial value of an undertaking or during the period deemed necessary to start up a joint venture and which is limited in time and space constitutes an ancillary restriction. The same goes for exclusivity or priority clauses. On the other hand, a restriction on competition arising from a system of national territorial limitations is neither objectively necessary nor inherent to the protection of copyright where other methods allowing the grant of multi-repertoire licenses are possible. Similarly, a non-compete clause cannot be classed as an ancillary restriction when it subsists in spite of the renunciation by the parties to implement the main operation or is not necessary for its realization due to a sufficiently protective legal context.
