Cooperation Agreement


Institution Definition

Cooperation is of a ‘horizontal nature’ if an agreement is entered into between actual or potential competitors. In addition, these guidelines also cover horizontal cooperation agreements between non-competitors, for example, between two companies active in the same product markets but in different geographic markets without being potential competitors. Horizontal cooperation agreements can lead to substantial economic benefits, in particular if they combine complementary activities, skills or assets. Horizontal cooperation can be a means to share risk, save costs, increase investments, pool know-how, enhance product quality and variety, and launch innovation faster. On the other hand, horizontal cooperation agreements may lead to competition problems. This is, for example, the case if the parties agree to fix prices or output or to share markets, or if the cooperation enables the parties to maintain, gain or increase market power and thereby is likely to give rise to negative market effects with respect to prices, output, product quality, product variety or innovation. The Commission, while recognising the benefits that can be generated by horizontal cooperation agreements, has to ensure that effective competition is maintained. Article 101 provides the legal framework for a balanced assessment taking into account both adverse effects on competition and pro-competitive effects. © EUR Lex

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