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Information Exchanges in the Draft Horizontal Guidelines: What Should We Expect?

December 2010
Mayer Brown Article

The European Commission has released draft horizontal guidelines1 meant to replace existing guidance that was adopted in 2001. These guidelines apply to so-called “horizontal agreements”—i.e., cooperation between actual or potential competitors.  They detail the methodology followed by the European Commission when assessing frequent types of cooperation, such as production and R&D agreements, purchasing  and commercialization agreements or standardization.

One of the most anticipated developments in the draft guidelines concerns information exchanges. These were not addressed by the previous guidance and constitute a complex subject in a number of respects.

First, information exchanges take place in very different contexts: industry statistical exchanges, exchanges of information ancillary to other horizontal agreements, exchanges of information to monitor compliance with the agreed terms in a cartel, exchanges of information that are themselves likely to be qualified as a cartel, etc. The specific context weights significantly on the competitive assessment, and it is difficult to draw a general line from the case-by-case analysis carried out in the various European precedents.

Another difficulty is that information exchanges are very often pro-competitive, as they can lead to an intensification of competition or significant efficiency gains. However, market characteristics, as well as the exact type of information exchanged, can lead to a different conclusion. For example, a collusive outcome is more likely in tight oligopolies where demand and supply are relatively stable.

In addition, several National Competition Authorities have released their own information exchange guidelines, and they diverge to some extent with the European Commission’s methodology.2 

The subject of information exchanges, therefore, clearly called for more explicit guidance. From that point of view, the draft horizontal guidelines:

  • Synthesize in a single document the frame of analysis presently applied by the Commission and the European courts;
  • Illustrate the Commission’s approach with practical examples; and
  • Outline the cases where efficiency gains may be taken into consideration and thus enable companies to benefit from Article 101 (3) of the Treaty on the Functioning of the European Union.

It should be noted that the Commission suggests no safe harbor concerning information exchanges. The final draft guidelines are expected to be published in late 2010 or early 2011.

An Analytical Framework Explained

The draft horizontal guidelines describe the Commission’s frame of assessment based on three main criteria:

The market economic conditions

  • The concentration degree in the market is a significant element to analyze such practices. In our view, two items deserve particular attention: first, the companies involved in the exchange have to cover a sufficiently large part of the relevant market; second, “sufficiently large part of the market” cannot be defined in the abstract and must depend on the specific facts of each case and the type of information exchange in question.
  • A collusive outcome is more likely in symmetrical market structures: when companies are homogenous in terms of costs, demand, market shares, product range, capacities, etc., they are more likely to reach a common understanding on the terms of coordination. However, information exchanges may also allow a collusive outcome to occur in more heterogeneous market structures. The companies may identify their differences and overcome them through coordination.
  • A transparent market will incite market players to collude more than will a less transparent market. In this context, the transparency is the combination of both the preexisting level of transparency and how the information exchange changes that level, and it will determine how likely it is that the information will have negative appreciable effects.
  • The simplicity of the market will be considered. Companies may find it difficult to reach a collusive outcome in a complex market environment. However, the Commission outlines how the use of information exchanges may simplify such environments.
  • The market’s stability will also be considered. Collusive outcomes are more likely where the demand and supply conditions are relatively stable. In an unstable environment, it may be more difficult for a company to know whether its lost sales are due to an overall low level of demand or to a competitor offering particularly low prices. Thus, it will be harder to sustain a collusive outcome.

The characteristics of the information exchange system

  • Frequent exchanges of information facilitate a better understanding of the market and increase the risk of a collusive outcome. The Commission considers that the more frequently information is exchanged, the more likely it will be that members’ common understanding of the market by the members will be significant, and the more their capacity to control deviating behaviors will be increased. However, in its decision T-Mobile Netherlands in 2009,3 the court indicated that such analysis depends on the structure of the market. It is possible that an isolated exchange may constitute a sufficient basis for the participating undertakings to concert their market conduct (i.e., reach a common understanding on the terms of coordination) and thus to successfully substitute practical cooperation between them for competition and the risks that it entails.
  • The transparency between producers and consumers is another key element of the equation. The probability that a collusive practice will be implemented is more important if the practice only benefits the members participating in the system.  

The type of information exchanged

  • The nature of the data—Only the exchange of commercially sensitive information is likely to be caught by Article 101 (1) TFEU. The case law has considered that the exchange of certain data, such as customer lists, production costs, quantities, turnovers, commercial strategies, plans, investments, R&D programs and results, etc., is more likely to be prohibited under Article 101(1) of the TFEU. However, concerning quantities, exchanges of information may generate efficiency gains by enabling, for instance, a better allocation of production resources between competitors. As for prices, the Ahlström Osakeyhtiö and others v.  Commission case4 demonstrates that if the prices exchanged are known to all, the competitive risk decreases. In conclusion, only the exchange of commercially sensitive data is likely to be adjudicated under Article 101 TFEU.

In general, the exchange of aggregated information is not regarded as being likely to be prohibited by competition law, as the law does not permit the information to be individually identified. Conversely, the Commission considers that individualized information allows meeting attendees to have a better perception of the market and enables them to rapidly implement retaliatory measures against deviating companies.

  • The age of data—One could believe that the exchange of old and historical data does not constitute an anticompetitive practice. However, this does not apply to every case, as it depends on the concerned sector and on its specific characteristics.

The Efficiency Gains

In the draft guidelines, the Commission addresses the question of potential efficiency gains that may be generated by exchanges of information. This evolution is in line with the more general context of a growing economic analysis in competition law.

Notably, the Commission considers that in certain situations, exchanges of information may be a source of efficiency, when the exchanges help direct production toward other markets where there is a strong demand, when exchanges allow companies to detect which consumers carry lower risks and should benefit from lower prices, or and when information communicated about the costs borne by competitors enables companies to be more competitive by developing internal incentive mechanisms. However, the Commission insists that, in fine, the benefits of such exchanges to the consumers must outweigh the restrictive effects on competition.

Specific Features to Be Considered under EU Rules

In our view, three features of the European Commission’s approach to information exchanges deserve particular attention. Companies are not always fully aware of these specific considerations, which bear important consequences under EU law.

  • The exchange of public data also has to be assessed under EU antitrust rules. According to the European Commission, even if the data is in what is often referred to as “the public domain,” it is not genuinely public if the costs involved in collecting the data discourage, to a sufficient degree, other companies and buyers from accessing it. For information to be genuinely public, obtaining it should not be more costly for buyers and companies unaffiliated with the exchange system than for the companies exchanging the information. The fact that information is exchanged in public may decrease the likelihood of a collusive outcome on the market to the extent that competitors unaffiliated with the information exchange, potential market entrants and buyers may be able to constrain potential restrictive effects on competition. Similarly, information exchange about input prices can lower search costs for companies and could ultimately benefit consumers.
  • Sharing the information with potential new entrants and clients weights significantly on the assessment of the anti- and pro-competitive effects of an information exchange under EU rules.  Indeed, exchanging the information in public may decrease the likelihood of a collusive outcome and provide benefits to all, thus fulfilling the condition that any restrictive effect be outweighed by efficiency gains passed on to consumers.
  • Cartel liability for exchanges of information may arise, under certain circumstances, from the mere receiving of information during one single meeting.  Indeed, under the Court of Justice T-Mobile ruling,5 the exchange of information during a single meeting can establish cartel liability, even when the exchange was one-way. In such circumstances, the only way to avoid cartel liability is to walk out immediately and visibly from the room in order to publicly distance from the restrictive arrangements resulting from that meeting.


1. Draft Communication from the Commission Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements, May 5, 2010.
2. French and UK competition authorities have also studied this issue through the thematic study of the French Competition Authority (2010) and the discussion paper of the OFT (2010).
3. CJUE, 4 November 2009, case no. C-8/08
4. C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85.
5. See our June 10, 2009, Legal Update at

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