COMPETITION • EUROPEAN LAW • RESTRICTIVE AGREEMENTS
Market sharing agreements are generally agreements between competitors whereby they agree not to compete in certain geographic markets or with respect to certain customers. They may take various forms, such as a concerted bid to a call for tenders, the sharing of activities between members of a grouping, a non-compete undertaking, deferred entry or “pay-for-delay” agreements, or even an absolute territorial protection clause in certain vertical agreements.
Market sharing agreements almost always fall under Article 101 TFEU: the allocation of markets or customers reduces choice for users and causes an increase in prices or even a decrease in production. Considered as restrictions by object, they exempt the Commission from having to assess their actual effects on the market. However, according to the Commission Guidelines on Horizontal Cooperation Agreements (2011/C 11/01), if the parties demonstrate that their agreement, even if it contains a market-sharing clause, improves output or is indispensable, an individual exemption may be granted.
