Commission publishes findings of evaluation of the EU competition rules on technology transfer agreements

This article is brought to you in association with the European Commission.

The European Commission has today published a Staff Working Document (‘SWD’) that summarises the findings of its evaluation of the Technology Transfer Block Exemption Regulation (‘TTBER’) and the accompanying Guidelines on the application of Article 101 of the Treaty to technology transfer agreements (‘Guidelines’).

The aim of the evaluation was to gather evidence on the functioning of the TTBER and of the accompanying Guidelines, for the Commission to determine whether it should let the rules expire, prolong their duration or revise them. In view of the findings of the evaluation, the Commission will now launch an impact assessment to examine policy options for a revision of the rules.

In November 2022, the Commission launched the review of the TTBER, which will expire on 30 April 2026, and of the accompanying Guidelines. During the evaluation, the Commission gathered evidence to understand how the rules have functioned since their adoption in 2014. This evidence includes feedback from a public consultation and a stakeholder workshop. The Commission also commissioned an external evaluation support study. The final report of the support study and the summary of the stakeholder workshop have also been published today.

Main findings of the evaluation

The evaluation has shown the following:

• The TTBER and the Guidelines have been largely successful in ensuring theeffective, efficient and uniform application of EU competition rules to technology transfer agreements. They have assisted companies in self-assessing the compliance of their technology transfer agreements with EU competition rules.
• The objectives of the TTBER and the Guidelines remain relevant, namely to block-exempt only pro-competitive technology transfer agreements and to provide legal certainty for companies wishing to enter into such agreements.

The evaluation also shows thatthe TTBER and the Guidelines could be improved in certain areas to increase legal certainty and reflect recent market developments. These include the following:

• Some stakeholders identified practical difficulties in applying one of the two market share thresholds contained in the TTBER, namely the threshold for technology markets. Technology markets consist of the licensed technology right(s) and other technologies that are regarded as interchangeable by licensees.
• Stakeholders also suggested broadening the scope of the TTBER to cover the licensing of data or data rights, which have a growing importance in the digital economy, and/or providing guidance on this issue in the Guidelines.
• The safe harbour provided in the Guidelines for technology pools has generally worked well. It sets out the conditions that, if met, usually ensure that the pool does not breach EU competition rules. However, some stakeholders consider that these conditions do not always guarantee that only compliant pools benefit from the safe harbour.
• Some stakeholders consider that the Commission should provide guidance on the competition law assessment of licensing negotiation groups, namely groups of technology implementers who negotiate technology licences together.

Next steps

The Commission will now launch the impact assessment phase of the review to look into the issues identified during the evaluation with a view to having revised rules in place by the date when the current rules will expire.

Stakeholders will have the possibility to comment on the call for evidence and to provide their views in the context of a public consultation, which is currently planned for December 2024.

Background

Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU’) prohibits agreements between companies that restrict competition. However, under Article 101(3) of the TFEU, such agreements can be declared compatible with the Single Market, provided they contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits without eliminating competition.

The TTBER exempts certain categories of technology transfer agreements from the prohibition of anti-competitive agreements laid down in Article 101(1) of the TFEU, with the aim of strengthening the incentives for research and development, facilitating the diffusion of technologies and promoting competition. Technology transfer agreements are agreements by which one firm authorises another one to use certain technology rights, such as patents, design rights or software copyrights, for the production of goods or services. These agreements are, in general, pro-competitive, as they facilitate the diffusion of technology and incentivise research and development. However, some technology transfer agreements, or restrictions in such agreements, can also have negative effects on competition.

The TTBER aims to provide legal certainty to companies that wish to enter into technology transfer agreements, while ensuring that competition is protected. The Guidelines provide guidance on the application of the TTBER and on the individual assessment under Article 101 of the TFEU of technology transfer agreements that fall outside the block exemption.

For more information

More information is available on the Commission’s competition website, on the dedicated TTBER and Guidelines review webpage.

Quote(s)