Article 101(3) TFUE lays down the conditions under which the provisions of Article 101(1) TFEU may be declared inapplicable to certain agreements, decisions or concerted practices. Article 2 of Regulation 1/2003 provides that the legal burden of proof rests on the party claiming the benefit of Article 101(3) TFEU. A block exemption Regulation (‘BER’) is based on the presumption that restrictive agreements, decisions or concerted practices that fall within its scope fulfil the four conditions set forth in Article 101(3) TFEU; a BER therefore provides a ‘safe harbour’ for certain categories of behaviour. According to the Court of Justice in Pedro IV Servicios SL v Total España SA (2009, paragraph 36), where an agreement is caught by a BER, there is no need to incur a complex economic and legal assessment to determine whether the conditions for the application of Article 101(1) TFEU are met. When a block exemption Regulation is available, companies should focus on i) determining whether the agreement in question falls within its general scope of application; ii) checking the market share thresholds defined therein; and iii) assessing whether the agreement, decision or concerted practice contains any hardcore or excluded restrictions. In this respect, even though Article 2 of Regulation 1/2003 does not expressly rule on the burden of proving that the conditions of a block exemption are fulfilled, the general rule seems to apply, so it will be on the party claiming the benefit to prove such conditions (JCB Service v Commission of the European Communities (2004), paragraph 168).
The fact that an agreement is not block-exempted does not mean that it is caught by Article 101(1) TFEU (Auto 24 SARL v Jaguar Land Rover France SAS (2012), paragraph 22) or that it does not fulfil the conditions of Article 101(3) TFEU: this will require a separate assessment.
When a BER is prima facie applicable, it is legally possible for the Commission or a National Competition Authority (‘NCA’) to withdraw the benefit of a block exemption, where the specific behaviour it covers has certain effects that are incompatible with Article 101(3) TFEU. According to Article 29(2) of Regulation 1/2003, an NCA can do this only where the negative effects of the behaviour occur in the territory of a Member State, or in a part thereof, which has all the characteristics of a distinct geographic market. The Guidelines on the application of Article 81(3) (now, Article 101(3)) of the Treaty (paragraph 37) state that the courts of Member States have no power to withdraw the benefit of block exemption regulations. In any case, the benefit of a block exemption can be withheld only when the agreement has already been concluded at the time of the withdrawal decision, which means that there is no withdrawing for future agreements. Finally, it is also possible for the Commission to declare by Regulation that a block exemption is inapplicable in certain circumstances.
In the system of Regulation 1/2003, only the Council and pursuant to an enabling Regulation under Article 103(2)(b) TFEU, the Commission have the power to adopt block exemption regulations regarding the application of Article 101(3) TFEU. The block exemptions may concern, among others, specialization agreements, research and development agreements, vertical restraints, motor vehicle aftermarkets, technology transfer agreements, agreements in the field of transport by rail, road, and inland waterway, as well as agreements relating to the joint operation of liner shipping transport services, when entered into in the context of consortia between vessel-operating carriers. Even though most block exemptions currently in force have been adopted by the Commission (with the authority granted by the Council), the Council has itself provided block exemptions for certain agreements, for instance, between small and medium-sized undertakings in the road and inland waterway sectors. The block exemptions share a typical format, and they all contain an expiry date before which the Commission reviews and consults on the functioning of the exemption about to expire. There is no presumption in favour of renewing a block exemption.
Besides increasing legal certainty for companies and relieving antitrust authorities of the burden of assessing individual agreements, decisions or concerted practices, block exemption regulations also express the Commission’s policy towards the behaviours to which the exemption applies. As a consequence, and having regard to the general prohibition of agreements, decisions and concerted practices restricting competition in Article 101(1) TFEU, provisions derogating therefrom in a certain BER must, by their very nature be strictly and narrowly interpreted (Automobiles Peugeot SA and Peugeot SA v Commission of the European Communities (1993), paragraph 37). Also, its direct applicability does not confer upon national courts the power to modify the scope of the exemption, by extending its sphere of application to agreements not expressly covered by it or further than necessary for the protection of the interests which it is intended to safeguard (Stergios Delimitis v Henninger Bräu AG (1991), paragraph 46).
In many jurisdictions, there are no block exemptions or safe harbour provisions (the United States is an example, even though a number of industries benefit from legislative exemptions from the antitrust laws therein). Sector-specific rules, which apply as lex specialis, derogating the application of competition rules to specific sectors of economic activity, are present in many jurisdictions (such as Brazil, Colombia, Czech Republic, among others). In other countries, the National Competition Act specifically provides for certain exemptions (for instance, Australia’s Competition and Consumer Act, New Zealand’s Commerce Act and Russia’s Federal law on protection of competition). Finally, so-called ‘statutory’ or ‘legal’ exemptions are also possible in those cases in which a certain behaviour is imposed or specifically authorised by law and therefore automatically exempted from the competition law scrutiny (among others, Spain, Israel and New Zealand). In many European Union Member States, National Competition Acts include dynamic referrals to the existing EU BERs, these being applicable to cases limited to the national territory without requiring a European dimension (as in the case of Germany and Portugal, for instance). The same connection is also present when the provisions of ‘national’ block exemptions are based on those provided for in the respective EU Regulations.