As regards the first type of conduct, art. 81.1 of the EC Treaty prohibits all agreements between undertakings (i.e. any entity/person engaged in economic activities), decisions by associations of undertakings and concerted practices which may affect trade (between Member States) and which have as their object or effect the prevention, restriction or distortion of competition (within the common market).

In principle, any contract between two or more undertakings might fall into this category if it produces a considerable restriction of competition in the relevant market.

Art. 81.1 EC Treaty contains an indicative list of forbidden conduct (i.a., directly or indirectly fixing purchase or selling prices; sharing markets or sources of supply; applying dissimilar conditions to equivalent transactions, thereby placing certain trading parties at a competitive disadvantage, or making the conclusion of contracts subject to acceptance of supplementary obligations that have no connection to the subject of such contracts).

In principle, any agreement that is incompatible with the common market is automatically void (art. 81.2). However, the conduct considered against competition under art. 81.1 can be authorised under certain conditions, namely:

• where some economic and societal benefits outweigh the competition concerns;
  
  
• no restrictions which are not indispensable to achieve such benefits are imposed; and
  
  
• the conduct or agreement in question does not give the undertakings concerned the possibility of eliminating competition with respect to a substantial part of the products in question (art. 81.3)
  
  

It is in art. 81.3 that Commission Regulation 2659/2000 on R&D agreements and Commission Regulation 772/2004 on technology transfer agreements (“block exemption regulations”) find their roots.

When an R&D agreement (e.g. a consortium agreement) or a licensing agreement is planned under an FP7 project, the participants concerned should ensure that no distortion of competition takes place either because it is a completely white agreement or because it fits the requirements of the Regulation and benefits of the block exemption 2 .

Of course, no agreement can benefit from the block exemption if it contains severely anti-competitive restraints (hardcore restrictions). Some agreements may be block exempted with the exception of provisions that include anti-competitive restrictions (singular restrictions) 3 .

Art.82 EC Treaty prohibits the abuse of a dominant position (i.e., one or more undertakings enjoy a dominant position in the relevant market and taking advantage of such a position they act or impose conditions on others that can be deemed abusive). This article mentions some examples of abusive practices (such as directly or indirectly imposing unfair purchase or selling prices; limiting production, markets or technical development to the prejudice of consumers; applying dissimilar conditions to equivalent transactions with other trading parties, etc.) It is thus the same (indicative) conduct found in art. 81.1 but performed just by one entity.

Already enjoying a dominant position in the relevant market is the main requirement for this category.

As concerns FP7 projects, conduct defined by article 81 and derived legislation may be more probable than that in article 82. In any case, it seems clear that licensing a few entities from a medium-size project is not likely to cause significant distortion of competition in the common market. Participants should be most careful where big companies or companies with a strategic position in a relevant market are involved in the agreement or when massive licensing to associated enterprises is foreseen at consortium level, since this increases the risks.