Analysing horizontal agreements under Article 101 TFEU

A key proposition underpinning EU competition law is that competing companies should act independently on markets. In principle, rivalry and competition can be expected to ensure the greatest consumer welfare, the most efficient allocation of resources and, with respect to the EU single market project, help further overall market integration. The European Commission (Commission) and other regulators are, therefore, wary of any arrangements which might dampen competition or reduce commercial uncertainty that would otherwise exist between competitors.

However, EU competition law recognises that certain 'horizontal' agreements entered into by actual or potential competitors (ie undertakings operating at the same level of the supply chain) can lead to substantial economic benefits—in particular, where they combine complementary activities, skills or assets. Horizontal cooperation can be a means of sharing risk, increasing investments, saving costs, pooling know-how, enhancing variety and product quality and increasing the speed/delivery of innovation—thereby generating benefits for consumers and EU trade, as well as attractive commercial advantages for the companies concerned.

This subtopic reviews the EU competition law considerations relevant to cooperative activities carried out by competitors.

Competition issues

Horizontal agreements