Hope for companies to soon get more guidance on how to cooperate to achieve sustainability objectives

On 6 May 2021, the Commission has published a staff working document (“SWD“, see here) on its evaluation of the two Horizontal block exemption regulations (‘HBERs‘, expiring on 31 December 2022) – Regulations (EU) No 1217/2010 (R&D BER) and 1218/2010 (Specialisation BER) – and its Horizontal Cooperation Guidelines.

The Commission found that the HBERs and the Horizontal Guidelines are still useful tools for businesses, but need to be “adapted to digitalization and the pursuit of sustainability goals.” Of the two, the pursuit of sustainability goals turned out to be, in the consultation launched by the Commission in 2019, the most important issue that affected the application of the HBERs and the Horizontal Guidelines (SWD, p. 66).

The Commission observed that the findings of the evaluation study point out that “one of the main gaps in the Horizontal Guidelines is the lack of guidance on agreements aimed at achieving sustainability goals. This grey area is twofold: on one hand, there is a question on what can be defined as a horizontal cooperation agreement pursuing a sustainability goal, without providing a too broad definition that leaves room for the phenomenon of ‘greenwashing’. On the other hand, there is uncertainty on the competitive assessment of sustainability agreements that have already been concluded among firms. Such agreements are currently assessed as one of the categories of agreements mentioned in the Horizontal Guidelines, such as, for example, standardisation agreements“ (SWD, p. 68).

Overall, the Commission noted that the evaluation showed that “the HorizontalGuidelines (…) are not adapted to the developments over the last ten years as regards, for example, (…) collaboration needed to address sustainability objectives. The guidance in some chapters of the Horizontal Guidelines is described as vague and insufficiently clear. As a consequence, there is a risk that companies tend to adopt a cautious approach in the case by case assessment of their horizontal cooperation agreements. The lack of legal certainty may lead companies to abandon their cooperation projects for fear of failing to meet the requirements of Article 101(3) of the Treaty and unintentionally chill incentives to engage in socially desirable R&D cooperation“ (SWD, p. 41).

Moreover, the Commission stated that “the evidence gathered in the evaluation suggests that the HBERs and Horizontal Guidelines do not provide sufficient legal certainty with regard to other types of horizontal cooperation agreements. Notably the guidance on agreements pursuing sustainability objectives, which is currently incorporated for what concerns environmental standards in Chapter 7 of the HorizontalGuidelines, is considered insufficient“ (SWD, p. 56).

In the coming weeks, the Commission will launch the impact assessment phase of the review to look into the issues identified during the evaluation (including the need to adapt the HBERs to the pursuit of sustainability goals) with a view to adopting the revised HBERs by 31 December 2022, when they expire. Stakeholders will have the possibility to comment on the inception impact assessment and to provide their views in the context of a public consultation, which is planned for the middle of this year. At the beginning of next year, the Commission will publish a draft of the revised rules for stakeholder comments.

So there is hope that the lack of legal certainty for sustainability agreements lives on borrowed time!

If you wish to know more on this topic, please contact Ziegler SAAT here.

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