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15.3.2.  Permissible contractual relations in the EU

    Agreements between undertakings are not regarded as restricting competition and, therefore, do not need to be notified to the Commission where their purpose is a form of authorised cooperation, such as: the joint carrying out of comparative studies, the joint preparation of statistics and models, the joint study of markets, cooperation on accounting, joint financial guarantees, the joint execution of research and development contracts, the joint use of means of production, storage and transport and, under certain conditions, the joint performance of orders, joint selling, joint after-sales and repair service and joint advertising [Commission notice].

    In order to lift any doubts the Commission specified in two communications the characteristics of very common contractual relations concerning exclusive representation and subcontracting, which do not fall under the prohibition of Article 81, paragraph 1 of the TEC (new Article 101 § 1 of the TFEU), provided that they do not establish absolute territorial protection.

    Thus, the Commission considers that an exclusive representation contract concluded between a "commercial agent", who does not accept any liability for the financial risks involved in the transactions and he in fact acts only as a simple middleman for a "principal", is not covered by Article 81 paragraph 1 [Commission notice]. In the case of exclusive representation, it must be ascertained whether or not there is economic integration between the agent and the principal, and to judge that the Commission attaches greater importance to economic reality than to the legal form of relations between undertakings. Thus, the distributor who holds, as owner, a considerable stock of the product covered by the contract or who, at his own expense, provides a significant service to his clientele free of payment or who himself determines the selling prices or the other conditions of the transaction, is regarded as a self-employed trader, in which case Article 81 paragraph 1 (TEC, new Article 101 § 1 TFEU) applies. However, Article 101 paragraph 1 does not apply in relations between a parent company and its subsidiary, where the latter is not free to determine its action on the market.

    Subcontracts are also allowed according to the Commission [Commission notice, see also section 17.2.4]. Subcontracting usually involves, for a small undertaking, known as the "subcontractor", performance of an order for a large undertaking, known as the "principal", in accordance with the directives of the latter. The Commission considers that the obligation to supply only to the latter manufactured objects or work executed does not restrict competition within the meaning of Article 81 of the EC Treaty (Article 101 TFEU).

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