Novel or unresolved – The Commission’s draft informal guidance notice

A bit overshadowed by other big legislative processes (we know what we are talking about), the Commission has also been actively updating its notices currently not so much in the focus of the public eye. Having made some progress on the simplified procedure in merger control cases already, the Commission recently presented an updated draft version of its Informal Guidance Notice and asked stakeholders for their comments. This post reviews the wording of the draft, compares it to its predecessor and analyses what it might mean for antitrust policy in the future.  

A couple of weeks ago, the Commission launched a new consultation process on its Informal Guidance Notice and invited stakeholders to contribute their views by 21 June 2022. The Informal Guidance Notice was adopted at the same time as Regulation 1/2003 (which introduced the concept of self-assessment to European competition law): With the introduction of Regulation 1/2003, undertakings have been fully responsible to analyse their agreements and cooperations with suppliers and competitors, i.e. whether efficiencies and consumer benefits outweigh any (potential) restriction on competition.

Whilst notifying agreements and cooperations to the Commission to get an official green light was not possible anymore, undertakings could still reach out to the Commission for guidance letters under the Informal Guidance Notice. However, to make sure that stakeholders would generally accept the concept of self-assessment, the circumstances under which undertakings could apply for informal guidance (or this informal guidance was even given) are rather narrow and are thus rarely used in practice.

In the official document kicking-off the consultation process for a new Informal Guidance Notice, the Commission now states that the strict approach is no longer required as the system based on self-assessment by businesses has become generally accepted by stakeholders.

Reading and comparing the Draft

When comparing the Draft with the current version of the notice, the commonalities rather than the differences stand out at first. Especially in the introductory part, the general approach is equally described as follows: “Where cases, despite the above elements, give rise to genuine uncertainty because they present novel or unresolved questions for the application of Article 101 and 102, individual undertakings may wish to seek informal guidance from the Commission.” With a view to the legal nature of the application process, the Draft even goes a step further (or back) by emphasizing that a request for guidance will not entitle an applicant to receive any such guidance.

As to the prerequisites of a guidance letter, rather small things ae noteworthy, but those could potentially have a considerable effect:

  • First, the Commission may consider issuing a guidance letter if a prima facie assessment of the facts and legal considerations suggest that there are valid reasons to provide clarifications.
  • Second, whilst the basic elements on which the prima facie assessment will be based are similar between the Draft and the current version, it is noticeable that the Draft only requires parties to demonstrate that there is no sufficient clarity in the existing Union legal framework to check the box of “novel or unresolved question”. This could mean that even if there are precedents, parties can argue that they are not sufficient for the question at hand.
  • Finally, in the context of the “interest in providing guidance” criterion, the Commission may now also take into account whether the objectives of an agreement or unilateral practice are relevant for the achievement of the Commission’s priorities or Union interest. This could potentially open the door for, e.g., sustainability considerations.

Reading between the – not so subtle – lines

So, while you have to read thoroughly to find indications for a change in the Commission’s practice, other statements and further developments are much clearer. As already mentioned, it is noticeable that the Commission indicates that a more relaxed approach is possible. This statement goes hand in hand with the Commission’s stand in recent years: Both in the Covid-19 and Ukraine crisis, the Commission openly showed its flexibility by issuing specific guidance papers with more room for cooperations.

Also, in the context of sustainability, Vice President Vestager virtually begged asked affected companies to contact her if there were any uncertainties with regard to such cooperation. Updated versions of other regulations and guidelines also reveal a desire for more informal coordination at various points. Overall, it is difficult to come to any conclusion other than that the Commission would like to see or is at least open to more intensive exchange with companies.

Don’t ask, don’t tell?

The more openminded approach seems to meet the moment and the need of companies in these turbulent times. As we observed previously, companies are increasingly looking for loose and temporary cooperations instead of structural and long-term M&A projects. By their very nature, these types of agreements are potentially prone to antitrust concerns. So, stakeholders will appreciate any informal guidance they can get.

But still, it will be interesting to see how the Commission’s openness will play out in practice. Companies could still be reluctant to apply for guidance letters as a clear “no” or modification requests by the regulator could put an end to an envisaged project. The alternative, starting a project with some uncertainty and the feeling of having good arguments in case of an investigation, might remain a viable option.

In terms of next steps, a summary report of the comments on the Draft will be published once the consultation is concluded, along with the contributions to the public consultation.

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