Horizontal agreements

2023 saw a number of developments concerning the interplay between sustainability considerations and competition policy. This blog post highlights the five key developments that businesses need to know when collaborating to achieve sustainable aims.

Key takeaways

  1. Authorities in the EU and UK resisted calls for introducing a sustainability safe harbour and adopted guidelines based on
Continue Reading Was 2023 a green antitrust year? Five sustainability related competition law developments you need to know

When its Anti-Monopoly Law (“AML”) went into effect in August 2008, China immediately became a significant antitrust enforcer on the world stage.  On June 24, 2022, the National People’s Congress, China’s top legislature, passed the Amendment to the Anti-Monopoly Law of the PRC (the “Amendment”), the first significant changes to the AML in nearly fourteen years.  The Amendment, which was signed into law by President Xi Jinping and published on June 24, will become effective on August 1.  It marks a major milestone in antitrust enforcement in China.

The more significant aspects of the Amendment include:

  • significantly enhanced penalties for AML violations, including the introduction of fines for individuals;
  • the introduction of a discretionary “stop-the-clock” mechanism for merger reviews;
  • the codification of a burden-shifting framework created by China’s courts that gives companies the opportunity to defend resale price maintenance agreements; and
  • new safe harbor and burden of proof provisions for matters involving vertical agreements.

Consistent with trends in other jurisdictions around the world, the Amendment also features a special focus on key economic sectors such as the digital economy.

Following the publication of the Amendment, the State Administration for Market Regulation (“SAMR”), China’s lead antitrust enforcement authority, released six sets of draft implementing regulations for public comment.  These cover subjects such as merger control and notification thresholds, anti-competitive agreements, abuse of a dominant market position, and the abuse of intellectual property rights to exclude or restrict competition.  SAMR is accepting comments on these regulations until July 27, 2022.

How Covington Can Help

Covington’s global antitrust and competition practice guides clients through the often-complex web of antitrust and competition laws around the world to help them secure their most important business objectives. Our team, which includes many attorneys who have served in senior leadership roles at government enforcement agencies and in in-house positions, has decades of collective experience advising clients regarding their global antitrust and competition concerns.  If you have any questions concerning the material discussed in this client alert, please contact any of the following members of our Antitrust/Competition practice: Jim O’Connell, James Marshall, and Alexander Wang.

This communication is intended to bring relevant developments to the attention of Covington & Burling LLP’s clients and other interested colleagues. It is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects mentioned herein. Please send an email to unsubscribe@cov.com if you do not wish to receive future emails or electronic alerts.Continue Reading Significant Changes to China’s Anti-Monopoly Law to Take Effect in August

On 1 March 2022, the European Commission (“Commission”) published drafts of the revised Research & Development Block Exemption Regulation (“R&D BER”) and Specialization Block Exemption Regulation (“Specialisation BER”, together the “Horizontal Block Exemption Regulations” or “HBERs”) as well as the accompanying Horizontal Guidelines for stakeholder comments.  The current HBERs are due to expire on 31 December 2022.

The HBERs set out how competitors can work together on projects and enter into horizontal agreements without breaching collusion-related prohibitions.  During the Commission’s evaluation of the current HBER rules and horizontal guidelines, the Commission identified a number of areas for improvement, including the need to update the rules in line with the Commission’s policies on digitalization and sustainability (see our previous blog post here).

Three things for you to know about the recent amendments to the HBERs:

  1. There is a strong focus on sustainability, and how sustainability agreements may comply with EU competition law, which provides greater scope for companies to enter into sustainability agreements (which is detailed in this blog post).
  2. Data sharing and information exchange is at the forefront of the HBER update, with additional guidance on identifying and sharing commercially sensitive information and the use of algorithms.
  3. The competition rules for research and development agreements and specialisation agreements have been explained and clarified, including new definitions of key competition terms (e.g., active and passive sales, unilateral specialisation agreements).

Continue Reading Sustainability in the European Commission’s revised horizontal block exemption regulations and guidelines

Tuesday, January 18th, the Federal Trade Commission (“FTC”) and the U.S. Justice Department’s Antitrust Division (“DOJ”) launched a joint public inquiry regarding the agencies’ horizontal and vertical merger guidelines. As part of this inquiry, the agencies are soliciting public comment via a Request for Information (“RFI”) on a wide range of topics that could lead to significant changes in the merger guidelines and increased scrutiny of a broad array of transactions. The agencies’ inquiry will address numerous themes of the merger guidelines including those highlighted below.
Continue Reading FTC, DOJ Announce Process to Revamp Merger Guidelines