EU Commission Signs-off on ESG Related Competitor Collaboration

The European Commission has issued its first-ever informal approvals of two separate sustainability initiatives among rivals under its revised Informal Guidance Notice and provided guidance on how the companies in question can ensure they do not run afoul of competition laws.

First, it approved a collaboration agreement that intends to speed up the transition from diesel to electric equipment for the energy supply of ships in EU ports, provided certain safeguards are in place, such as strict limitations around exchanges of competitively sensitive information. Second, the agency also provided a separate approval to a negotiating group active in the automotive industry for the licensing of standard essential patents. The guidance in this case also came with strings. For example, the automotive licensing group cannot represent more than 15 percent of total demand, and it must be open to other participants in the auto sector. The cooperation relates only to general Standard Essential Patents, not to ones that are specific to the automotive industry.

The guidance letters are the first issued by the agency under its revamped informal guidance notice, which was adopted back in October 2022. The mechanism allows businesses to request informal advice from the agency on the application of EU antitrust rules to “novel or unresolved” queries.

By issuing antitrust guidance to industries, the EU’s competition watchdog is keen to show that it won’t stand in the way of initiatives that are in line with the EU’s policy objectives, such as making the economy more competitive and resilient, or reducing emissions.