COMPETITION LAW: ONLINE TRAVEL AGENTS AND AIRLINES of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. (2) Any agreements or decisions prohibited pursuant to this Article shall be automatically void. (3) The provisions of paragraph 1 may, however, be declared inapplicable in the case of: • any agreement or category of agreements between undertakings, • any decision or category of decisions by associations of undertakings, • any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question. The thinking behind this provision is clear. If, instead of competing with each other, companies agreed to reduce competition, this would distort the level playing field and thus in turn cause harm to consumers and other businesses. This is why all agreements between undertakings which have as their object or effect a distortion of competition and which may affect trade between Member States are prohibited (paragraph 1) and automatically void (paragraph 2). This includes, for example, explicit agreements (such as those of cartels) and concerted practices for fixing prices or limiting production output, or dividing the market among companies (also called territorial protection clauses). Those types of agreement are always considered harmful to competition and are thus prohibited without exception. On the other hand, other types of agreements may be exempted, provided that they contribute to improving the production or distribution of goods or to promoting technical or economic progress. For example, agreements on cost or risk sharing between companies, or on accelerating innovation through cooperation in research and development could bring significant economic benefits. The conditions for granting such an exemption are that consumers are allowed a fair share of the resulting benefit and that the agreement does not impose unnecessary restrictions or aim to eliminate competition for a substantial part of the products concerned (paragraph 3). Rather than such exemptions being granted on a case-by-case basis, they are most commonly governed by the
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