Court of Justice of the European Communities (including Court of First Instance Decisions)

OPINION OF ADVOCATE GENERAL

RANTOS

delivered on 2 March 2023 (1)

Case C‑331/21

Autoridade da Concorrência,

EDP – Energias de Portugal SA,

EDP Comercial – Comercialização de Energia SA,

Sonae MC SGPS SA, formerly Sonae Investimentos and Sonae MC – Modelo Continente SGPS,

Modelo Continente Hipermercados SA

other party:

Ministério Público

(Request for a preliminary ruling from the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon, Portugal))

(Reference for a preliminary ruling – Competition – Article 101 TFEU – Agreement between an electricity supplier and a food retailer operating hypermarkets and supermarkets – Non-competition clause – Potential competition – Distinction between vertical and horizontal agreements – Restriction of competition ‘by object’ or ‘by effect’ – Regulation (EU) No 330/2010 – Agency agreement – Liberalisation of the electricity supply market)

I.      Introduction

1.        Can a non-competition clause in an association agreement between undertakings present on separate product markets constitute an agreement with an anticompetitive object for the purposes of Article 101 TFEU and subject to what conditions? That, in essence, is the question which lies at the heart of the present request for a preliminary ruling from the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon, Portugal).

2.        By the present request for a preliminary ruling, the referring court asks the Court to examine four issues relating to the interpretation of Article 101(1) TFEU, around which the questions referred for a preliminary ruling may be grouped, namely: (i) the assessment of whether undertakings present on separate product markets are potential competitors of one another; (ii) the legal characterisation of an association agreement aimed at promoting the activities of the contracting parties; (iii) whether a non-competition clause within the framework of such an agreement is ancillary in nature; and, (iv) whether such a clause can be characterised as a restriction of competition ‘by object’.

II.    The dispute in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court

3.        The dispute in the main proceedings is between the Autoridade da Concorrência (Competition Authority, Portugal, ‘the AdC’) and the applicants in the main proceedings, namely EDP – Energias de Portugal SA (‘EDP Energias’), EDP Comercial – Comercialização de Energia, SA (‘EDP Comercial’), Sonae MC SGPS SA (formerly Sonae Investimentos SGPS SA and Sonae MC – Modelo Continente SGPS, ‘New Sonae MC’) and Modelo Continente Hipermercados SA (‘MCH’), concerning fines which the AdC imposed on them (2) under Article 9(1)(c) of the Portuguese Law on Competition (3) for having concluded a non-competition clause within the framework of an association agreement. Those fines were reduced by the Tribunal da Concorrência, Regulação e Supervisão (Competition, Regulation and Supervision Court, Portugal, ‘the TCRS’).

4.        Of the one part, MCH and New Sonae MC are part of a group of Portuguese undertakings active in many business sectors (4) (‘the Sonae group’). Within that group, MCH is active in the food distribution sector in Portugal and operates a group of stores (hypermarkets and supermarkets). New Sonae MC, which manages the shares and is active in the same sector, holds the entire capital of MCH.

5.        Of the other part, EDP Energias and EDP Comercial are part of a Portuguese group whose parent company is EDP Energias which is active, inter alia, in the sector of production, distribution and supply of electricity and natural gas. That group is the largest Portuguese player on the markets for the production, distribution and supply of electricity.

A.      The association agreement at issue in the main proceedings

6.        On 5 January 2012, EDP Comercial and MCH entered into an association agreement known as the ‘Plano EDP Continente’ (EDP Continente Scheme) (‘the association agreement’), which aimed to attract customers, stimulate sales and offer discounts to consumers. On the date when that agreement was concluded, those companies were not competitors on any product market or geographic market, including the market for the retail sale and supply of electricity and natural gas.

7.        Clause 2.1 of that agreement defined the purpose of the association agreement as follows: ‘To promote the development of electricity supply activities [under the liberalised regime] by EDP Comercial and the retail distribution of food and non-food products by [MCH] in … hypermarkets and supermarkets [belonging to MCH] and in the retail outlets operated by other [companies affiliated with] Sonae Investimentos [except MCH] …’.

8.        From a commercial point of view, that association provided for reductions in the electricity prices which were reserved for customers holding a ‘Cartão Continente’ (‘Continente Card’), a discount card issued by MCH as part of a loyalty programme. In addition to holding that card, customers wishing to join the EDP Continente Scheme had to conclude with EDP Comercial a contract for the supply of low-voltage electricity on the liberalised market in mainland Portugal. Those customers thereby benefited from a 10% reduction on their consumption of electricity supplied by EDP Comercial. That reduction was provided by issuing discount vouchers corresponding to the amount of that reduction which were loaded onto the Continente Card of the customers concerned, who could then use those vouchers to make purchases in the Sonae group establishments referred to in Clause 2.1.

9.        Initially, the amount of the reductions was borne entirely by EDP Comercial. (5) However, as traffic in the abovementioned establishments and turnover resulting from the EDP Continente Scheme increased, it was decided that MCH would bear part of the reductions granted. The other costs of the association relating to advertising, marketing, communications and defending proceedings were borne in equal parts by EDP Comercial and MCH.

10.      Clause 12.1 of the association agreement, entitled ‘Exclusivity’, stated: ‘During the term of this agreement and for a period of one year after its expiry, [MCH] undertakes not to: (a) engage, directly or through companies in which [Sonae Investimentos] has a majority shareholding, in the activity of supplying electricity and natural gas in mainland Portugal; (b) negotiate or conclude with any electricity or natural gas supplier which is not an entity exercising control over or affiliated with EDP Comercial … association agreements, joint ventures, agreements in principle, advertising campaigns or other instruments which have the object or effect of granting discounts or other monetary benefits relating to electricity or natural gas …’. Under Clause 12.2, EDP Comercial undertook corresponding obligations on the market for the retail distribution of food products in mainland Portugal.

11.      The association agreement at issue was in force until 31 December 2012, although consumers could join only from 9 January 2012 to 4 March 2012. Contracts for the supply of electricity could be entered into in a network of 180 commercial spaces operated by MCH, the supply of which was shared by EDP Comercial and MCH. In total, 145 775 customers subscribed to the EDP Continente Scheme, of whom 137 144 remained contractually bound to EDP Comercial during and after the end of the campaign. EDP Continente Scheme members benefited from a total amount of reductions of EUR 6 907 354 and the value of all the coupons activated came to around EUR 6 024 252. Of that amount, EUR 1 795 912 was borne by MCH.

B.      The relevant regulatory framework

12.      The referring court states that that association agreement coincided with a crucial phase in the process of liberalising the market for the supply of electricity in Portugal, with regulated tariffs for normal low voltage coming to an end at the end of 2012.

13.      In that regard, the process of liberalisation of the supply of electricity in Portugal took place gradually from 1995 onwards. The Portuguese regulatory framework applicable to the marketing of electrical energy has, since 1995, favoured a system of free competition in that sector by simplifying the legal conditions for access to and the exercise of the activity of supplying electricity, which is subject only to registration rather than a licence, thereby favouring the entry of independent operators. In 2006, a transitional period was established during which consumers were able to choose between the regulated market and the liberalised market solely on the basis of the commercial attractiveness of offers, without any regulatory burden or constraint.

14.      With effect from 1 January 2011, the regulated tariffs applicable to end customers for the supply of electricity at very high, high and medium voltage and at specific low voltage were abolished. From 1 July 2012 and 1 January 2013 respectively, the regulated tariffs applicable to the supply of low-voltage electricity (small businesses/households) were abolished for end customers whose contracted power was greater than or equal to 10.35 kVA and for customers whose contracted power was less than 10.35 kVA. After those dates, new contracts could be concluded only on the liberalised market. (6)

C.      The contested decision

15.      On 4 May 2017, following an alert issued in January 2012 by the Ministério da Economia e do Emprego (Ministry of Economy and of Employment, Portugal) on alleged irregularities arising from the association agreement, the AdC adopted a decision (‘the contested decision’) ordering the applicants in the main proceedings to pay fines totalling EUR 38 300 000 for having committed an infringement of competition ‘by object’, under Article 9(1)(c) of the Portuguese Law on Competition.

16.      According to the AdC, the infringement of competition law consisted of an agreement between undertakings with the object of market-sharing, in the form of a non-competition clause which formed part of the association agreement (namely Clauses 12.1(a) and 12.2(a)). The markets concerned by that clause, all three situated in mainland Portugal, were: (i) the market for the supply of electricity, (ii) the market for the supply of natural gas, and (iii) the market for the retail distribution of food. That authority found that the applicants in the main proceedings had implemented that agreement for a period of two years at a crucial stage in the process of liberalising the national market for the supply of electricity, which it found to have further strengthened the anticompetitive nature of the agreement.

17.      Following actions brought by the applicants in the main proceedings, on 30 September 2020 the TCRS upheld the contested decision, while reducing the amount of the fines by 10% in view of the advantage which the agreement at issue conferred on households by means of discounts. (7)

18.      As the AdC had done, that court took the view that, within the framework of the association agreement at issue in the main proceedings, the applicants in the main proceedings had concluded a ‘non-competition pact’ constituting a restriction of competition by object. To reach that conclusion, that court took into account, inter alia, the activities of the Sonae group on the markets for the production and supply of electricity before and during the implementation of that association agreement, namely: (i) the formation of an association between an undertaking in the Sonae group and Endesa SA, via the creation of the joint company Sodesa – Comercialização de Energia, SA (‘Sodesa’), (8) (ii) the formation of an association between MCH and Petróleos de Portugal – Petrogal, SA (‘GALP’), (9) and (iii) the pursuit of activities on the markets for the mini-generation, the micro-generation and the cogeneration of electrical energy by MCH and by other companies belonging to the Sonae group. (10) That court also took the view that only undertakings that were actual or potential competitors could have demonstrated any interest in concluding such a pact.

19.      The applicants in the main proceedings and the AdC brought an appeal against the judgment of the TCRS before the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon), which is the referring court in the present case. In its appeal, which was limited to the amount of the fines, the AdC requested that the judgment of the TCRS be set aside in so far as it reduced by 10% the amount of the fines it had imposed. (11) The view of the applicants in the main proceedings, is, amongst other things, that they have not committed an anticompetitive act and have, therefore, requested the referring court to set aside that judgment in its entirety and, in the alternative, reduce the amount of the fine. (12) Furthermore, the applicants in the main proceedings requested the national court to make a reference for a preliminary ruling. The 11 questions referred for a preliminary ruling by the national court essentially repeat the questions formulated by those applicants.

D.      The questions referred by the national court

20.      The referring court has doubts as to whether the association agreement and, more specifically, the non-competition clause, may have had a negative impact on competition on the markets concerned.

21.      In those circumstances, the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Must Article 101 TFEU, on which Article 9 of the NRJC (Law 19/2012 of 8 May 2012) is based, be interpreted as meaning that it permits the classification of a non-competition clause such as those contained in clauses 12(1) and 12(2) … of the association agreement as an agreement [constituting a restriction] by object which is concluded between an electricity supplier and a food retailer operating hypermarkets and supermarkets with a view to granting to customers, who sign up to a given energy tariff plan made available by the electricity supplier in mainland Portugal and are at the same time holders of a loyalty card offered by the food retailer, discounts which can be used only to buy products in the outlets operated by that retailer or by companies linked to it, in the case where that agreement includes other clauses providing that its purpose is to promote the pursuit of the activities carried on by the participating companies … and the benefits to consumers have been established … but no analysis has been carried out of the specific harmful effects which the aforementioned clauses 12(1) and 12(2) have on competition?

(2)      May Article 101(1) TFEU be interpreted as meaning that an agreement, which prohibits the pursuit of certain economic activities and provides for an alleged sharing of markets between two undertakings, may be regarded as being [a restriction] of competition by object, in the case where it is concluded between two entities which do not actually or potentially compete with each other on any of the markets affected by that obligation, even though the markets affected by that obligation may be regarded as liberalised or without insurmountable legal barriers to entry?

(3)      May Article 101(1) TFEU be interpreted as meaning that an electricity supplier and a food retailer operating hypermarkets and supermarkets which have concluded [an] agreement with each other with a view to promoting each other’s business activities and increasing each other’s sales (and, in the case of the food retailer, the sales of companies in whose capital [its parent company] has a majority shareholding) must be regarded as potential competitors, in the case where the food retailer and the […] companies linked to it were not engaged [at the time when the agreement was concluded] in the activity of [supplying electricity], either on the geographical market in question or on any other market, […] and it has not been shown in the proceedings that they intended to engage in that activity on that market or that they had taken any [preparatory] steps with a view to doing so?

(4)      Does the answer to the previous question remain unchanged if another company in whose capital a majority interest is held by a parent company of the food retailer that is a party to the agreement (where [proceedings have not been brought nor has a finding been made against either] of those two entities […] by the national competition authority [nor has either of those two entities] been a party to the proceedings before this court), which did not fall within the subjective scope of the non-competition obligation, held a 50% interest in a third entity which pursued in Portugal activities [in the supply of electricity in Portugal] that came to an end three and a half years prior to the conclusion of the agreement [following] the dissolution of that entity?

(5)      Does the answer to the previous question remain unchanged in the case where the retailer that is a party to the agreement produces electricity via its mini-generation and micro-generation facilities on the roofs of its outlets, although it delivers all of the energy produced, at regulated prices, to the [supplier of last-resort].

(6)      Does the answer to the fourth question remain unchanged in the event that the retailer that is a party to the agreement, eight years prior to the date thereof, concluded with a third party [namely a supplier of] liquid fuel […], for the purpose of granting cross-discounts, another commercial cooperation agreement (still in force on the date of the former agreement) relating to the purchase of those products and of products sold in the retailer’s hypermarkets and supermarkets, in the case where the undertaking that is the other party to the agreement, in addition to [supplying] liquid fuels, also [supplies] electricity in mainland Portugal, and it has not been shown that, at the time when the agreement was concluded, the parties had any intention of extending that contract to the [supply] of electricity or had taken any [preparatory] steps with a view to doing so?

(7)      Does the answer to the fourth question remain the same in the event that another company in whose capital a majority interest is held by a parent company of the food retailer that is a party to the agreement (where [proceedings have not been brought nor has a finding been made against either] of those two entities [ …] by the national competition authority [nor has either of those two entities] been a party to the proceedings before this court), which did not fall within the subjective scope of the non-competition obligation, produced electricity in a cogeneration facility, although it delivered all of the energy produced, at regulated prices, to the [supplier of last-resort]?

(8)      If the foregoing questions are answered in the affirmative, must Article 101(1) TFEU be interpreted as meaning that a clause may be regarded as being [a restriction] by object, where it prohibits such a food retailer, during the term of the agreement and in the year immediately thereafter, from pursuing activities [comprising the supply] of electricity, either by itself or through a company in whose capital a majority interest is held by [a parent company which is] the subject of proceedings in the territory covered by the agreement?

(9)      Can the concept of ‘potential competitor’ for the purposes of Article 101(1) TFEU, Article 1(1)(c) of [Regulation No 330/2010 ] (13) and paragraph 27 of the European Commission’s Guidelines on Vertical Restraints (OJ 2010 C 130, p. 1) (14) be interpreted as meaning that it includes an undertaking, bound by a non-competition clause, which is present on a product market that is completely separate from that of the other party to the agreement, in the case where the documents in the case file of the dispute brought before the national court contain no specific indication (such as [plans], investments or other preparations) that, before and in the absence of that clause, the undertaking in question might enter the other party’s market in the short term, and it has not been shown that, before and in the absence of that clause, that undertaking was perceived by the other party to the agreement as a potential competitor on the market concerned?

(10)      May Article 101(1) TFEU be interpreted as meaning that the mere fact that an association agreement, concluded between an undertaking engaged in the [supply] of electricity and an undertaking engaged in the retail sale of food and non-food products for household consumption for the purposes of the cross-promotion of their respective activities (in which, inter alia, the first undertaking grants to its customers discounts on their electricity consumption which the second undertaking deducts from the price of the purchases made by such customers in its retail outlets), contains a clause whereby both parties undertake not to compete with each other or to conclude similar agreements with each other’s competitors, means that the [object] of that clause is to restrict competition within the meaning of Article 101(1) TFEU, even if:

–        the temporal scope of the clause in question (one-year [from signature] of the agreement plus one year) coincides with the period, laid down in the same agreement, during which the parties are not authorised to use business secrets or know-how acquired in the course of implementing their association in projects with third parties;

–        the geographical scope of the clause is confined to the geographical scope of the agreement;

–        the subjective scope of the clause is confined to the parties to the agreement, to undertakings in whose capital they hold a majority interest and to other undertakings in the same group which also own or operate retail sales outlets falling within the scope of that agreement;

–        the subjective scope of the clause excludes the vast majority of the [undertakings] belonging to the same economic group as the parties, which, in consequence, are not bound by the clause and may compete with the other party to the agreement during and after the term of that agreement;

–        the undertakings subject to the non-competition clause are present on completely separate product markets, and it has not been shown that, at the time when the agreement was concluded they had pursued any projects or plans, made any investments or taken any other steps with a view to entering the other party’s market?

(11)      Must the concept of ‘vertical agreement’ for the purposes of Article 101(1) TFEU, Article 1(1)(a) of [Regulation No 330/2010] and paragraph 25(c) of the Guidelines on Vertical Restraints (OJ 2010 C 130, p. 1) be interpreted as meaning that it includes an agreement exhibiting the characteristics described in the foregoing questions, in which the parties are present on completely separate product markets and it has not been demonstrated that, prior to and in the absence of the agreement, they undertook any projects, investments or plans with a view to entering the other party’s product market, but in which each party, for the purposes of that agreement, makes its commercial networks, sales teams and know-how available to the other party in order to promote, [win] and grow the other party’s customer base and business?’

22.      Written observations were submitted by the applicants in the main proceedings, the Portuguese Government and the European Commission. Those parties, and the AdC, which did not submit written observations, also presented oral argument at the hearing which was held on 9 November 2022.

III. Analysis

23.      Before addressing the questions referred for a preliminary ruling by the national court (section B), I consider it useful to clarify points concerning the Court’s jurisdiction to answer those questions referred and to express my view on their admissibility (section A).

A.      The jurisdiction of the Court and the admissibility of the request for a preliminary ruling

24.      First, as regards the Court’s jurisdiction, I note that the applicants in the main proceedings were censured on the sole basis of Article 9(1) of the Portuguese Law on Competition and not on the basis of a provision of EU law. According to settled case-law, under the procedure laid down in Article 267 TFEU, the Court has no jurisdiction to interpret national law, that being exclusively for the national court. (15) The question therefore arises as to whether the Court has jurisdiction to answer the questions referred by the national court.

25.      In that regard, it should be noted that, according to settled case-law, the Court has jurisdiction to give a ruling on a request for a preliminary ruling concerning the provisions of EU law in situations where, although the facts in the main proceedings do not fall directly within the scope of that law, the provisions of that law have been made applicable under national law by means of a reference made in national law to their content. (16)

26.      In the present case, it is common ground that Article 9 of the Portuguese Law on Competition is inspired by and essentially matches the content of Article 101 TFEU. (17) That provision must therefore be applied in a manner consistent with Article 101 TFEU, especially since the referring court considers that, in order to resolve the dispute before it, it is essential to obtain clarification of the scope of certain concepts which are specific to EU competition law.

27.      It follows, in my view, that the Court has jurisdiction to answer the questions referred for a preliminary ruling.

28.      Second, with regard to the requirements concerning the content of a reference for a preliminary ruling set out in Article 94 of the Rules of Procedure of the Court of Justice, I would point out that, in accordance with that provision, every request for a preliminary ruling is to contain, inter alia, ‘a summary of the subject matter of the dispute and the relevant findings of fact as determined by the referring court or tribunal, or, at least, an account of the facts on which the questions are based’. (18) Those requirements are of particular importance in the area of competition, where the factual and legal situations are often complex. (19)

29.      In that regard, I note that, in the present case, the referring court has made little effort to present a ‘summary of the subject matter of the dispute’ (20) or to limit that summary to ‘relevant findings of fact’, (21) while distinguishing among the relevant facts those which are considered to be established (22) from those which are not. (23) It is therefore only in the light of facts considered to be established that the questions referred for a preliminary ruling should be analysed.

30.      I note that the second question referred for a preliminary ruling is based on a factual premiss which is identified as not having been established. More specifically, that question concerns the characterisation of the non-competition clause as a restriction by object, where it refers to ‘entities which do not actually or potentially compete with each other’, and starts from the premiss that there is no potential competition even though that is precisely one of the main issues justifying the reference for a preliminary ruling. The referring court states that one of the questions to be answered is whether ‘the undertakings referred to in the contested decision are to be regarded as potential competitors’. (24)

31.      Consequently, even if, in principle, questions referred for a preliminary ruling by a national court enjoy a presumption of relevance, (25) and it is not a matter for the Court to determine the accuracy of the factual context, (26) in the present case, the interpretation sought of Article 101(1) TFEU, in the context of that question referred for a preliminary ruling, is purely hypothetical in nature.

32.      In the light of the foregoing, I consider that the second question referred for a preliminary ruling ought to be regarded as inadmissible.

B.      The questions referred for a preliminary ruling

33.      I consider, as do all the parties and interested parties who have submitted written observations, that the questions referred for a preliminary ruling can be grouped around four issues in respect of which the referring court seeks clarification, namely:

–        the concept of ‘potential competition’ and more specifically whether and subject to what conditions undertakings present on separate product markets may be regarded as potential competitors for the purposes of applying Article 101 TFEU (third to seventh and ninth questions);

–        the legal characterisation of an association agreement concluded between undertakings aimed at cross-promotion of their respective activities (eleventh question);

–        the conditions subject to which a restriction of competition may be regarded as ancillary to an agreement the objective of which is not anticompetitive (tenth question); and

–        the characterisation of a non-competition clause as a restriction of competition ‘by object’ or ‘by effect’ (first and eighth questions).

34.      I propose to examine those issues in the order set out above, since the question whether or not the parties are potential competitors (section 1) and the analysis of the nature of the agreement (section 2) are important elements in determining whether the non-competition clause must be regarded as being ancillary to the agreement (section 3) or, if not, as a restriction of competition by object (section 4).

1.      The concept of ‘potential competition’

35.      By its third to seventh and ninth questions referred for a preliminary ruling, which are to be examined together, the referring court asks, in essence, whether and subject to what conditions Article 101(1) TFEU must be interpreted as meaning that a food retailer, bound by an association agreement with an electricity supplier the purpose of which is to promote their respective activities and which includes a non-competition clause, may be regarded as a potential competitor on the market for the supply of electricity even though, at the time when that agreement was concluded, it was not carrying on any activity on that market.

36.      More specifically, the referring court asks the Court whether a number of different items of evidence are relevant in establishing whether there is potential competition on the market for the supply of electricity, such as:

–        the intention of that food retailer to enter the market for the supply of electricity (third question);

–        the preparatory steps for such entry, including the existence of specific indications that the retailer might enter the market in question in the short term, such as plans, investments or other preparatory steps (third and ninth questions);

–        the electricity supplier’s perception of the competitive constraints imposed by the retailer (ninth question);

–        the activities of companies in the group of undertakings to which the retailer belongs on markets adjacent or related to the market for the supply of electricity (fourth and sixth questions);

–        the activity of the food retailer on the upstream market for the production of electricity (fifth and seventh questions).

37.      By those questions, which involve the evidence examined in the judgment in Generics (UK), the referring court is, in essence, seeking to clarify the scope of that judgment and, more specifically, to ascertain whether that evidence now constitutes a general criterion for assessing whether there is potential competition.

38.      As a reminder, in the judgment in Generics (UK), the Court held that a manufacturer of originator medicines who is the holder of a manufacturing process patent for an active ingredient that is in the public domain, on the one hand, and the manufacturers of generic medicines who are preparing to enter the market of the medicine containing that active ingredient, on the other, who are in dispute as to whether that patent is valid or whether the generic medicines concerned infringe that patent, are potential competitors, where it is established that the manufacturer of generic medicines has in fact a firm intention and an inherent ability to enter the market, and that market entry does not meet barriers to entry that are insurmountable. (27)

39.      In order to reach that conclusion, the Court relied on a criterion which is well established in the case-law, (28) namely that of determining whether there were real and concrete possibilities of the undertaking absent from the relevant market joining that market and competing with one or more of the undertakings already present on that market. Thus, when the agreement at issue has the effect of temporarily keeping an undertaking outside a market, it must be determined whether there would have existed, in the absence of that agreement, real and concrete possibilities of entry. The Court explained that such a criterion means there can be no potential competitive relationship as an inference merely from the purely hypothetical possibility of such entry or even from a mere wish or desire to do so. Conversely, there is no requirement that it must be demonstrated with certainty that that manufacturer will in fact enter the market concerned and that it will be capable, thereafter, of retaining its place there. Finally, it confirmed that the assessment of whether there is potential competition must be carried out having regard to the structure of the market and the economic and legal context within which it operates. (29)

40.      The Court therefore assessed whether there was a competitive relationship solely with regard to the criterion of ‘real and concrete possibilities’ of market entry, while also taking account of the specific regulatory and legal features of the pharmaceutical sector. (30)

41.      The applicants in the main proceedings maintain that, by the judgment in Generics (UK), the Court wished to clarify the general criterion relating to the concept of ‘potential competition’ where the undertakings in question are not present on the same product market, by stipulating three conditions which have to be satisfied cumulatively and successively: (i) the undertaking concerned must have a real and concrete possibility of entering the market concerned; (ii) it must have the firm intention and the inherent ability to enter that market; and (iii) it must have taken sufficient preparatory steps to enter that market within a short period of time.

42.      In that context, I consider it appropriate, first of all, to clarify the framework for analysing the concept of ‘potential competition’ (section a), then to recall the assessment of potential competition in the case-law prior to the judgment in Generics (UK) (section b), and, finally, to carry out a specific analysis of the various items of evidence to which the national court refers (section c).

(a)    The framework for analysing ‘potential competition’

43.      As a preliminary point, I would point out that, under Article 101(1) TFEU, all agreements between undertakings which may affect trade between Member States and which have ‘as their object or effect’ the prevention, restriction or distortion of competition are to be prohibited as incompatible with the internal market. It is therefore apparent from the wording of that provision that to qualify an agreement between undertakings which may restrict competition presupposes that there is competition which may be restricted. (31) Thus, if the examination of the factual, economic and legal context of an agreement were to reveal that the undertakings in question are not competitors, such an agreement, ipso facto, cannot be categorised as restricting competition either.

44.      The conditions of competition on a market are based not only on existing competition – also referred to as actual competition – between undertakings already present on that product market, but also on potential competition between those undertakings and undertakings which are not yet present on that market. (32) That finding explains why, in the absence of actual or potential competition, an agreement cannot be restrictive, regardless of whether or not the agreement has an anticompetitive object. (33)

45.      In that sense, the concept of ‘potential competition’ is intended to determine the degree of competitive constraints exercised by undertakings which do not operate on the same product or geographic markets (34) and is not taken into consideration in defining those markets in so far as the conditions in which it may actually constitute a competitive constraint depend on the analysis of certain factors and circumstances relating to the conditions of entry on those markets. The analysis of potential competition is therefore carried out only at a later stage, generally once the position of the undertakings in question on the market has already been determined. (35) From that perspective, potential competition implies a forward-looking analysis, which explains why it is relevant in the application of Article 102 TFEU (36) and merger control. (37)

(b)    The assessment of ‘potential competition’

46.      For the purposes of applying Article 101 TFEU, a distinction can be drawn between two situations: (i) situations where the undertakings are active on the same, although geographically distinct, product markets and (ii) situations where they are present on different product markets.

47.      First, as regards potential competition between undertakings which are active on the same, although geographically distinct, product markets, the EU Courts have often been called on to examine whether there is a potential competitive relationship in the context of agreements concluded between undertakings which are active on the same product market but on different geographic markets. (38) Those cases, which were in essence treated as geographic market sharing agreements clearly having an anticompetitive object, have enabled the EU Courts to establish the threshold above which the existence of a restriction of potential competition could be found for the purposes of applying Article 101 TFEU. More specifically, in the judgment in ENS, the General Court, drawing on the judgment in Delimitis, (39) referred for the first time to the criterion of the existence of real concrete possibilities for another undertaking to enter the relevant market, in order to assess the existence of potential competition. (40) That criterion has since been reiterated on numerous occasions by the EU Courts when they have been called upon to determine whether an agreement is likely to make it more difficult for potential competitors to access the market. (41)

48.      The same case-law has also established that, in order to determine that there is potential competition, account must be taken of the conditions in which competition takes place on the market concerned and if the possibility of entering that market was unrealistic or purely hypothetical, it could not be taken into consideration. (42) In other words, that examination must be made on the objective basis of those possibilities. (43) That assessment on a case-by-case basis has resulted in the EU Courts being called upon to analyse a large amount of evidence relating to the specific features of the product markets in question, relating in particular to the ease of access to that market, in order to establish the plausibility of such access. (44)

49.      Second, with regard to potential competition between undertakings which are active on different product markets, I note from the outset that neither the regulatory framework nor the case-law require potential competition to be between undertakings which are active on the same product market. (45) The only points of reference from the case-law which could be relevant in that regard are the judgments from cases concerning ‘pay-for-delay’ agreements, (46) in so far as, in the context of those agreements, the undertakings in question were not actually active on the same product market since, when the agreements at issue were concluded, the generic manufacturers were not active on the market for the originator medicine.

50.      In that regard, I note that the fact that those judgments are the only benchmark in the case-law is logical since the configuration of an anticompetitive agreement between undertakings which are not active on the same product markets is rare and not obvious to conceive of, in particular where the respective activities of the undertakings do not take place on related markets (such as those upstream or downstream in the production chain). However, such a configuration could arise, inter alia, where a market is contestable. (47)

51.      In the present case, it is common ground that the parties to the agreement at issue in the main proceedings were not competitors on the same product markets, whether in Portugal or elsewhere. In support of that, the case-law relating to undertakings active on the same product markets might, at first sight, appear to be less relevant since it is, in principle, easier to establish a potential competitive relationship where undertakings are already present on the product market, albeit in different geographical areas. It is, in essence on the basis of that consideration that the applicants in the main proceedings submit that, in situations where undertakings are not active on the same product markets, the standard of proof required in order to demonstrate a potential competitive relationship should be dependent on stricter criteria. In the absence of useful guidance in the case-law, the recent case-law resulting from judgments relating to ‘pay-for-delay’ agreements therefore becomes relevant.

52.      However, although proof of real and concrete possibilities of entry in connection with undertakings which are active on different product markets is objectively more difficult to adduce, contrary to the submissions of the applicants in the main proceedings, I do not think that, by the judgment in Generics (UK), the Court wished to depart from previous case-law by requiring stricter criteria or by raising the standard of proof required in order to establish a competitive relationship.

53.      On the one hand, in the judgment in Generics (UK), the Court as a first stage recalled the settled case-law regarding the concept of ‘potential competition’, confirming that the only relevant criterion was that of ‘real and concrete possibilities of the undertaking absent from the relevant market joining that market and competing with one or more of the undertakings already present on it’. (48) Accordingly, paragraphs 36 to 39 of the judgment in Generics (UK) simply reiterate existing case-law. (49) At the heart of that criterion, in my view, lies the need to distinguish between ‘potential competition’ and ‘simple speculation’ concerning possible market access, (50) irrespective of whether or not an undertaking is active on the same product market. That criterion therefore means that there can be no finding of a potential competitive relationship as an inference merely from the purely hypothetical possibility of such entry. (51) In addition, such a demonstration must be supported by factual evidence or an analysis of the structures of the relevant market. An undertaking cannot be described as a potential competitor if entry into the market is not an economically viable strategy. (52)

54.      On the other hand, it was only at a second stage of the analysis in the judgment in Generics (UK), when assessing potential competition having regard to the structure of the pharmaceutical market and the economic and legal context within which it operates, that the various items of evidence referred to in point 40 of the present Opinion were analysed by the Court. The wording of the introductory part of paragraph 43 of that judgment could not be clearer in that respect.

55.      It follows that the Court’s reasoning in the judgment in Generics (UK) cannot be transposed to all situations of potential competition, with the result that that evidence cannot be characterised as ‘conditions’ which must be satisfied in order for it to be established that there is potential competition between undertakings which are active on separate product markets.

56.      However, that finding does not mean that the evidence cited in that judgment, and reiterated in subsequent judgments, does not provide useful guidance for the analysis of the present case, which could provide clarification in order to guide the referring court in its interpretation. Although they relate to the pharmaceutical sector and have unique characteristics which cannot be transposed to the present case, those judgments make it possible to define the various items of evidence capable of establishing a situation of potential competition. It is in the light of those considerations that I propose to analyse them.

(c)    The application in the present case of factors capable of establishing a situation of potential competition

57.      As a recap, the TCRS characterised, as did the AdC, the non-competition clause as a market sharing agreement for the supply of electricity in mainland Portugal, taking the view that MCH was a potential competitor of EDP Comercial on that market. In order to find that potential competition existed, it relied on: (i) the context in which the association agreement was concluded, namely in the midst of the liberalisation of supply in the energy sector; (ii) the fact that the parties regarded each other as potential competitors; and (iii) the various activities of the companies in the Sonae group, namely: (a) the existence of an association with Endesa; (b) the presence of the Sonae Group on the upstream market for the production of electricity; and (c) the commercial association entered into with GALP.

58.      The applicants in the main proceedings contend that MCH cannot be characterised as a potential competitor and that, should there be no such characterisation, the very basis of the contested decision would fall away. More specifically, they submit that the factors taken into account by the AdC and the TCRS, and in particular the three factual circumstances referred to above, were not relevant and cannot demonstrate potential competition.

59.      In that regard, I note that, since the non-competition clause, by its nature and by its object, was capable of keeping MCH or any other undertaking in which Sonae Investimentos is the majority shareholder temporarily out of the market for the supply of electricity, it must be determined whether, in the absence of that clause, there would have been real and concrete possibilities, at the very least, of one of those undertakings entering that market. The assessment of the existence of potential competition must therefore be (i) undertaken in the light of the structure of the market and the economic and legal context governing its operation and (ii) supported by factual evidence.

60.      It follows that the starting point for the analysis must necessarily be the Portuguese regulatory framework applicable to the marketing of electrical energy and, in particular, the analysis of barriers to entry for new players. In that regard, it is apparent from the case file that, since 1995, that regulatory framework has favoured a system of free competition by simplifying the conditions for accessing and exercising that activity, which is subject only to registration rather than a licence. (53) The AdC did, however, acknowledge that some entry or expansion costs remain even after liberalisation. (54)

61.      Despite the importance of analysing the regulatory framework, the referring court’s questions for the Court rather appear to concern the other criteria taken into account by the AdC and the TCRS, asking, in essence, whether each of the facts on which the analysis is based, taken in isolation, would be sufficient to conclude that there was potential competition between the parties to the association agreement.

62.      In that regard, I would recall that the assessment of potential competition is based on a large amount of evidence which differs according to the market in question. (55) That contextual approach is also in line with the standard of proof required for a finding of an infringement under Article 101 TFEU. (56) Accordingly, while some items of evidence in themselves are not decisive, they may reinforce each other. In the present case, it is therefore important to establish whether the evidence, taken together, constitutes a sufficient demonstration of the existence of potential competition, (57) an assessment which is for the referring court alone. (58)

(1)    The relevance of the undertaking’s intention to enter the relevant market (third question)

63.      In the first place, with regard to the value to be attributed to an undertaking’s intention to enter a market, it is settled case-law that while such an intention ‘may be of relevance’ in order to determine whether an undertaking can be considered to be a potential competitor, the essential factor on which such a description must be based is whether it has the ability to enter that market. (59) That characterisation must therefore be based on an objective assessment, in conjunction with the criterion of the ‘ability’ to enter the market. Subjective evidence, such as an intention, cannot therefore constitute an autonomous, necessary or essential factor in order to demonstrate that potential competition exists. (60) That approach is consistent with the general rule that, although the parties’ intention is not a necessary factor in determining whether an agreement is restrictive, there is nothing prohibiting that factor from being taken into account. (61)

64.      However, the applicants in the main proceedings submit that, in the light of the judgment in Generics (UK), the ‘firm intention’ to enter the market concerned ought, from now on, to be one of the conditions to be fulfilled in order to establish that potential competition exists.

65.      For the reasons already set out in points 53 to 55 of the present Opinion, I do not consider that the Court wished to impose such a condition or, at the very least, to modify the criterion relating to the intention to enter the market by making it more rigorous. On the contrary, the importance attached to the intention of the parties was, in my opinion, strictly linked to the specific facts of the cases in question. (62) In the judgment in Generics (UK), the ‘intention’, made known by a manufacturer of originator medicines to make transfers of value to a manufacturer of generic medicines in exchange for the postponement of the latter’s entry to the market for an active ingredient which is in the public domain, even though the former claims that the latter is infringing its process patents, was treated as a strong indication of the condition of competition supporting the inherent ability of the manufacturer of generic medicines to enter that market. That approach was confirmed in the judgment in Lundbeck (63) and the judgment of the General Court in Servier. (64)

66.      Consequently, while in situations where undertakings are not present on the same product markets, a factual element illustrating the intention to enter a market may indeed support the ability to make such entry, it is only supplementary and is not an essential factor in order to demonstrate potential competition.

(2)    The relevance of steps preparatory to entering the relevant market (fourth and sixth questions)

67.      In the second place, as regards the importance to be attached to preparatory steps to enable access to a market within a short period of time, I note that, although that factor was analysed in the judgment in Generics (UK), (65) from the reasons following from the above analysis, it cannot constitute an indispensable condition for proving that potential competition exists.

68.      The decision to refer to preparatory steps in the judgment in Generics (UK) was intrinsically linked to the specific features of the pharmaceutical sector and in particular to the fact that access to the market of a medicine containing an active ingredient that is in the public domain was subject to specific regulatory and legal constraints. In addition, the Court explained that those steps permitted the conclusion, inter alia, that a manufacturer of generic medicines had the inherent ability to enter that market. (66)

69.      It follows that the factor regarding preparatory steps cannot constitute an autonomous requirement for demonstrating potential competition and must be analysed in conjunction with the factor regarding ability. Its relevance will therefore depend on the specific context of the market, since such a factor is of limited relevance where the market concerned is contestable.

70.      It is therefore for the referring court to assess the relevance of such evidence by examining, first, whether the entry of an undertaking onto the market for the supply of electricity was subject to regulatory constraints or constraints specific to the opening up of the electricity market and, second, the length of time required to obtain any authorisations providing an entitlement to supply electricity. Such an assessment would form part of the more general assessment of the ability of an undertaking to enter that market within a period such as to exert competitive pressure. In the present case, that period corresponds to the two-year period following the agreement at issue being concluded (which corresponds to the duration of the non-competition clause). (67) In that regard, unlike in the medicine sector, there does not appear to have been any administrative constraints which could prevent a new player from entering the market for the supply of electricity at the final stage of the liberalisation of that market. (68)

(3)    The relevance of the perception of the undertaking present on the relevant market (ninth question)

71.      In the third place, as regards the perception of the undertaking present on the market concerned, in the judgment in Generics (UK), the Court was able to infer such a perception on the part of the manufacturer of originator medicines from the fact that it made significant transfers of value to a manufacturer of generic medicines, that action being indicative of the risk that the manufacturer of generic medicines presented to its commercial interests. (69) Like the other factual elements, that factor was considered relevant in the light of the specific features of the market in question, and cannot constitute an evidential requirement for the purposes of demonstrating potential competition.

72.      In the present case, it is not clear from the case file whether the TCRS relied on evidence relating to the existence of a (possible) perception, since the referring court states that, in order to give judgment at first instance, the TCRS took into account the fact that the ‘parties concerned regarded each other as potential competitors’, (70) without however specifying the type of evidence that was available to it. In the absence of such evidence, the question arises as to whether the very existence of a non-competition clause could be indicative of such a perception, in particular in the context of a liberalised market.

73.      In that regard, it follows from the case-law of the Court that the conclusion of an agreement between undertakings the purpose of which is to keep one of them out of a specific market is a ‘strong indication’ of the existence of a competitive relationship. (71) Such an analysis seems logical to me. If the parties to a non-competition agreement did not perceive themselves as potential competitors, they would, in principle, (72) have no reason to conclude such an agreement. The existence of such an agreement would make sense only if there was competition to be restricted, since concluding such an agreement constitutes an acknowledgment of the fact that the parties are, at least, potential competitors. (73)

74.      However, as in the case of the other factors cited, while the very existence of the non-competition clause constitutes, at the very least, a strong indication that a relationship of potential competition exists, such a relationship must be supported by other factors relating to the reality of the market. It is therefore for the referring court to examine, in the light of the reasons relied on as justification for the non-competition clause, whether that perception supports the existence of such potential competition.

(4)    The relevance of the activities of companies in the Sonae group on adjacent product and geographic markets (fourth and seventh questions)

75.      In the fourth place, as regards the relevance of the activities of companies in the Sonae Group on adjacent product and geographic markets, a distinction must be drawn between the existence of the joint company Sodesa and the existence of the production of electricity at the cogeneration facility.

76.      First, as regards the joint company Sodesa (fourth question), it is recalled that, in the judgment under appeal, the TCRS considered that the Sonae group had acquired know-how in the electricity supply sector, as a result of the association between an undertaking owned by Sonae Capital and Endesa, the incumbent player in Spain on the market for the production and supply of electricity. (74) According to the TCRS, that acquired know-how facilitated entry to that market and was therefore relevant in assessing potential competition. In addition, the dissolution of that association more than three years before the conclusion of the association agreement at issue in the main proceedings does not preclude MCH from being characterised as a potential competitor.

77.      In that regard, I note, first, that the fact that Sodesa ceased its activities in 2008, three and a half years before the association agreement was signed, does not mean that the AdC ought not to have taken into account, as evidence of potential competition, the fact that the Sonae Group had acquired know-how on the market concerned and that, in the relatively recent past, it had already developed activities relating to the supply of electricity in Portugal. Any factor, even a factor prior to the conclusion of the association agreement, may be relevant in establishing potential competition. (75) To that end, such know-how could indeed have been useful for the purposes of entering the market for the supply of electricity within a short period of time, which represented a competitive constraint for EDP Comercial.

78.      Second, as regards the argument that Sonae SGPS, which had acquired know-how in the electricity supply sector by reason of its involvement (through one of its subsidiaries) in Sodesa, was not a party to the association agreement or mentioned in the non-competition clause, it should be noted that, irrespective of whether Sonae SGPS could be regarded as forming a single undertaking with MCH for the purposes of competition law, there is nothing to prevent the fact that certain companies in the Sonae Group had been active, via Sodesa, on the same market as EDP Comercial from being taken into account as part of the factual background. Accordingly, an undertaking which is active in the food retail sector and which is part of a group operating also in the energy sector can certainly exert greater pressure on account of its potential entry to the market than an undertaking which is part of a group operating exclusively in the food retail sector. However, in the context of that same analysis, the arguments put forward by MCH concerning the actual likelihood of transferring know-how from Sonae Capital within the group and in particular to MCH following the dissolution of Sodesa (76) is a factual assessment which, although decisive as to the weight to be attached to the association with Endesa, falls exclusively within the jurisdiction of the referring court.

79.      Second, with regard to the cogeneration facility (seventh question), it is clear from the case file that one of the companies in the Sonae Group, namely Sonae Capital SGPS, which is not covered by the subjective scope of the non-competition clause, was active in the production of electricity in Portugal from September 2009 onwards through the acquisition, inter alia, of the entire share capital of an undertaking which owns and operates a natural gas turbine combined cycle cogeneration facility in the Paiã area (Portugal).

80.      On the basis of those findings, it is impossible to assess the probative value to be given to that evidence. Since the non-competition clause does not apply to Sonae Capital and the contested decision was not addressed to it, it is for the referring court to establish the links between the production activities in a cogeneration facility and the possible facilitation of MCH’s entry to the energy supply market. (77)

(5)    The relevance of the association with GALP (sixth question)

81.      In the fifth place, with regard to the relevance of the association with GALP, I would point out that, as a further basis for potential competition existing between the applicants, the judgment of the TCRS is based on the fact that, since 2004, MCH and GALP, an operator present on the market for the supply of electricity in Portugal and on the market for the supply of fuel, formed an association granting discounts to customers of both enterprises on their purchases of fuel (in GALP stations) and consumer goods (in establishments operated by MCH) in the form of vouchers or coupons (‘the Vice-versa Programme’).

82.      In that regard, in the light of the foregoing analysis, I consider that, in the context of the liberalisation of a market, and given that GALP was a direct competitor of EDP, the AdC certainly cannot be criticised for having analysed the association between MCH and GALP, notwithstanding the fact that that association had been formed more than seven years before the agreement, since it was still in force at the time of the association agreement at issue in the main proceedings. However, without prejudice to the assessment of the probative value to be attributed to that association, I note that, since the Vice-versa Programme relates exclusively to the retail distribution of vehicle fuels, it seems less plausible that it would have directly generated advantages capable of facilitating MCH’s entry to the market for the supply of electrical energy.

(6)    The relevance of the parties’ activities on the upstream market for the production of electricity (fifth and seventh questions)

83.      In the sixth and last place, with regard to the relevance of the parties’ activities on the market for the production of electricity, it is apparent from the judgment under appeal that MCH and other companies owned by Sonae Investimentos, all of which were bound by the non-competition clause, had been active since 2009 on the market for the production of electricity by means of micro- and mini-generation facilities using photovoltaic panels on the roofs of the retail outlets operated by those companies. That presence on the upstream market of electricity production led the TCRS to find that there was potential competition between MCH and EDP on the market for the supply of electricity.

84.      In that regard, it should be noted that the markets for the production of electricity and for the supply of electricity to end customers are distinct markets. However, it should be observed, as the Commission points out, that companies upstream (or downstream) in the production chain are often potential operators which are in a good position to enter a new market, including in the electricity and gas sector, in particular where those markets are vertically integrated. On that basis, the AdC cannot be criticised for having also taken that factor into account.

85.      As to the significance of the fact that MCH produces electricity using facilities on the roofs of its outlets under a special scheme whereby the energy produced is delivered, at regulated prices, to the supplier of last-resort, that is subject to a purely factual assessment on which the Court does not have to give a ruling. It is therefore for the referring court to determine whether such facilities would have been capable of conferring on MCH real and concrete advantages, with a view to possibly entering the market for the supply of energy. However, I consider that such a factor, alone, is unlikely to make MCH, or any majority-owned affiliate of Sonae Investimentos, operators which are particularly well placed on the downstream market for the supply of electricity in the light of, first, the absence of legal, technical and economic links between generation activities under the special scheme mentioned above and the activity of supplying electricity and, second, the very limited amount of energy produced, the main aim of that production being to make a return on an existing asset rather than to generate profits.

2.      The legal characterisation of the association agreement as a ‘vertical agreement’

86.      By its eleventh question for a preliminary ruling, the national court asks, in essence, whether an association agreement such as that at issue in the main proceedings falls within the concept of an ‘agency agreement’ or at least a ‘vertical agreement’ within the meaning of Article 1(a) of Regulation No 330/2010.

87.      The referring court’s doubts stem, in essence, from one of the lines of argument put forward by the applicants in the main proceedings, according to which the association agreement at issue in the main proceedings consists of making available their respective sales networks, sales forces and know-how in order to promote, win and grow the other party’s customers and business, characteristics which are argued to fall within the concept of a ‘vertical agreement’ and, more specifically, an ‘agency agreement’. Those legal characterisations are relevant for assessing the non-competition clause in so far as the commercial risk and safeguarding of the investments made by the parties could serve to contextualise and justify its inclusion. (78)

88.      Before examining whether the agreement at issue in the main proceedings can be characterised as an ‘agency agreement’ (section b) or, at the very least, a ‘vertical agreement’ (section c), I consider it useful briefly to recall the framework for applying Article 101 TFEU to vertical agreements (section a).

(a)    The applicability of Article 101 TFEU to vertical agreements

89.      Article 101 TFEU applies to vertical agreements which may affect trade between Member States and which prevent, restrict or distort competition (‘vertical restraints’). It therefore provides a legal framework for assessing vertical restraints, which takes into consideration the distinction between anticompetitive and procompetitive effects. Article 101(1) TFEU prohibits agreements which appreciably restrict competition, while Article 101(3) TFEU exempts those agreements which confer sufficient benefits to outweigh the anticompetitive effects. (79)

90.      In the context of applying the latter provision, the Commission has defined, by means of a regulation, the categories of vertical agreements regarded as normally satisfying the conditions laid down in Article 101(3) TFEU, such as, inter alia, vertical agreements for the purchase or sale of goods or services where those agreements are concluded between non-competing undertakings. (80) Those categories include certain types of vertical agreements which are considered able to improve economic efficiency within a chain of production or distribution through, inter alia, a reduction in transaction and distribution costs. (81) The likelihood that such efficiency-enhancing effects will outweigh any anticompetitive effects depends, inter alia, on the degree of market power of the parties to the agreement and, therefore, on the extent to which those undertakings face competition from other suppliers. (82) That is the reason why the exemption regulation creates a presumption that, where the market share held by each of the undertakings party to the agreement on the relevant market does not exceed 30%, vertical agreements which do not contain certain types of severe restrictions of competition generally lead to an improvement in production or distribution and allow consumers a fair share of the resulting benefits.

(b)    Characterisation as an ‘agency agreement’

91.      An ‘agency agreement’ is a specific type of vertical agreement which is generally not caught by the prohibition provided for in Article 101(1) TFEU. (83) Such an agreement is defined as an agreement between an undertaking (the principal) and an agent, namely ‘a legal or physical person vested with the power to negotiate and/or conclude contracts on behalf of [the principal], either in the agent’s own name or in the name of the principal, for the purchase of goods or services by the principal, or sale of goods or services supplied by the principal’. (84) For the purposes of applying Article 101(1) TFEU, the agreement will be qualified as an ‘agency agreement’ if the agent does not bear any, or bears only insignificant, risks in relation to the contracts concluded and/or negotiated on behalf of the principal. (85) In the case of such agreements, the selling or purchasing function of the agent forms part of the activities of the principal, who bears the commercial and financial risks, which means that all obligations imposed on the agent in relation to the contracts concluded on behalf of the principal fall outside Article 101(1) TFEU. (86)

92.      In the present case, the applicants in the main proceedings maintain that the association agreement ought to have been regarded as ‘two cross agency agreements’ or a ‘bilateral agency agreement’ since each of the contracting parties promotes the sales of the other party. (87)

93.      I cannot agree with that characterisation.

94.      First of all, although it is clear, in the light of Clause 2.1 of the association agreement, that its purpose was to promote the supply of electricity by EDP Comercial and the retail distribution activities of MCH, (88) it is not apparent from the content of that agreement that the contracting parties wished to resell the other party’s products as independent distributors, with the result that they had to negotiate or conclude contracts as agents on behalf of the other party. (89)

95.      Next, as is clear from the Guidelines on Vertical Agreements, the determining factor in defining an agency agreement for the purposes of applying Article 101(1) TFEU is the financial or commercial risk borne by the agent in relation to the activities for which it has been appointed as an agent by the principal. (90) It is apparent from the order for reference that, although the costs of implementing the association (in relation to price reductions, advertising, marketing and communications) were borne in equal parts by the parties to the association agreement, that was not the case in respect of the amount of the reductions (91).

96.      Finally, assuming that the costs of implementing the association agreement were the ‘consideration’ for the agency services, it should be noted that the parties appear to have conducted a promotional campaign relating to their respective products and not the individual products of each party. It is clear from the terms of the association agreement that MCH would not have benefited from the promotion of EDP Comercial’s electricity supply contracts if its customers had not at the same time joined MCH’s loyalty programme. Similarly, EDP Comercial would not have persuaded customers to subscribe to the MCH loyalty programme if they had not concluded a contract for the supply of electricity at the same time. Therefore, the actions of each of the two undertakings cannot be treated as autonomous actions to promote the products of the other.

(c)    Characterisation as a ‘vertical agreement’

97.      As regards the characterisation of the association agreement as a ‘vertical agreement’ with the result that the Block Exemption Regulation can be applied thereto, it should be recalled that Article 1(1)(a) of Regulation No 330/2010 defines a ‘vertical agreement’ as ‘an agreement or concerted practice entered into between two or more undertakings each of which operates, for the purposes of the agreement or the concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services’. (92) The assessment of the vertical nature of an agreement is therefore made in relation to ‘the purposes of the agreement’. A vertical agreement may therefore also be concluded between competitors if, for the purposes of the agreement, the parties operate at different levels of the production/distribution chain. Consequently, the question whether the association agreement constitutes a vertical agreement must be assessed independently of the potential competition which has been found.

98.      In the present case, and despite the analysis that follows, I would like to point out, at the outset, that the significance of the legal characterisation of the association agreement as a ‘vertical agreement’ must be put into context, in so far as the assessment of the anticompetitive nature of the non-competition clause will have to be carried out independently and, more specifically, by reference to whether it is ancillary in nature. (93) What is problematic in the case in the main proceedings is not the association agreement as such, but the non-competition clause. (94) I therefore doubt that the fact that the association agreement may be characterised as a ‘vertical agreement’ has any bearing on the assessment of whether that clause is anticompetitive.

99.      That said, I note that, for the reasons already mentioned in points 94 to 96 of the present Opinion, it is apparent that the main objective of the association was to increase sales of both parties’ products and not a desire to act as independent distributors of each other’s products. The parties therefore carried out a joint promotional campaign, relating to their respective products, and not to the individual products of each party. Without prejudice to the assessment by the national court, the factual evidence provided by that court suggests that that agreement bears similarities to a ‘commercialisation agreement’ as referred to in the Guidelines on horizontal cooperation agreements, (95) concluded with a view to carrying out a joint advertising campaign for the parties’ respective products. However, it is for the referring court to determine, on the basis of a possible definition of the relevant markets, whether such an agreement involves cooperation in the field of sales, the parties acting, for the purposes of the association agreement, at the same level of the economic chain.

3.      Whether the non-competition clause is ancillary

100. By its tenth question for a preliminary ruling, the referring court asks, in essence, whether a non-competition clause, such as that contained in the association agreement at issue in the main proceedings, may be regarded as a restriction ancillary to the main operation of that agreement having regard, inter alia, to its temporal, geographical and subjective scope. (96)

(a)    The framework for assessing ‘restrictions ancillary’ to commercial agreements

101. First of all, it should be recalled that an ‘ancillary restriction’ is any restriction to competition which is directly related to and necessary to the implementation of a main operation which is not itself anticompetitive in nature. (97) The theory of ancillary restrictions, initially developed in the context of purely commercial agreements, but extended to the regulatory sector, (98) thus makes it possible to assess the effects of certain restrictions prior to the application of Article 101 TFEU.

102. More specifically, in accordance with the case-law of the Court, if a given operation or activity is not covered by the prohibition rule laid down in Article 101(1) TFEU owing to its neutrality or positive effect in terms of competition, a restriction of the commercial autonomy of one or more of the participants in that operation or activity is not covered by that prohibition rule either if that restriction is objectively necessary to the implementation of that operation or that activity and proportionate to the objectives of one or the other. (99)

103. Accordingly, where it is not possible to dissociate such a restriction from the main operation or activity without jeopardising the existence and aims of that operation or activity, it is necessary to examine the compatibility of that restriction with Article 101 TFEU in conjunction with the compatibility of the main operation or activity to which it is ancillary, even though, taken in isolation, such a restriction may appear on the face of it to be covered by the prohibition rule in Article 101(1) TFEU. (100)

104. Finally, with regard to non-competition clauses, it should be noted that competition law decision-making practice presents perfectly legitimate reasoning for non-competition clauses in agreements constituting mergers, horizontal agreements and vertical agreements to escape the application of Article 101(1) TFEU, in particular when such clauses are essential, either to protect the parties from a risk associated with the agreement in question or to align the incentives for both parties to obtain a certain result.

105. It is in that context that it is necessary to assess whether the non-competition clause at issue in the main proceedings may be characterised as ‘ancillary’ to the operation of the association agreement and escape the application of Article 101(1) TFEU.

(b)    Application in the present case

106. It is apparent from the request for a preliminary ruling that the applicants in the main proceedings maintain that, in the context of the association agreement at issue in the present case, the function of the non-competition clause was to protect the confidentiality of commercially sensitive information exchanged in order to implement the EDP Continente Scheme. Such a clause is therefore argued to be strictly ancillary to that agreement. They take the view that the clauses dealing with confidentiality (Clause 16), the protection of intellectual property (Clause 11) and the protection of personal data (Clause 9) in the association agreement were not sufficient to protect their investments and know-how shared in the context of their cooperation. Furthermore, they also submit that the scope of the non-competition clause was sufficiently limited since it did not extend beyond the sectors of activity covered by the association or the companies having access to commercially sensitive information. Finally, the flow of information continued for a time after the association had ended, which made it possible to extend the duration of the clause.

107. For the following reasons, and in the light of the requirements stemming from the case-law recalled in points 102 to 104 of the present Opinion, I take the view that, while the file submitted to the Court contains no information that is capable of calling into question the favourable or, at the very least, neutral nature in terms of competition of the association agreement concluded between MCH and EDP Comercial, the view cannot be taken, however, that a non-competition clause was objectively necessary for the implementation of that agreement and proportionate to the objectives pursued by it.

108. On the one hand, as regards the objective necessity of the clause, while I accept that the protection of commercially sensitive data may be regarded as a legitimate objective in the context of an association agreement which requires appropriate measures restricting the conduct of the parties to the agreement, I consider that a non-competition clause, such as that at issue in the main proceedings, cannot be regarded as being strictly necessary in the light of that objective.

109. First, I note that, while the stated objective of the parties to the association agreement is to prevent each other from using commercially sensitive information for their own benefit by engaging in a competing activity, and in particular to prevent MCH from entering the market for the supply of low-voltage electricity or gas to consumers, the contractual solution adopted consists of preventing even the possibility of carrying on that activity. That solution seems to me to be disproportionate to the objective pursued since, in order to avoid what might constitute unfair competition through the use of information belonging to one of the parties, the clause purely and simply eliminates the very possibility of such a competing activity. That clear difference between the objective pursued and the contractual solution adopted ought, in itself, to be sufficient to conclude that the non-competition clause is disproportionate, taking account, in particular, of the fact that the contractual prohibition against entering the market for the supply of electricity imposed on MCH coincided with the critical period of the liberalisation of the market for the supply of low-voltage electricity.

110. Second, and as a consequence of the previous analysis, it seems to me that less restrictive solutions could have been adopted to protect the flow of commercially sensitive information. For example, the introduction of an information barrier system (‘Chinese wall’), in conjunction with pre-existing confidentiality, intellectual property and data protection clauses, would have been appropriate and equally effective in protecting the commercially sensitive information in question.

111. On the other hand, even if one were to assume that the non-competition clause was objectively necessary for the implementation of the association, I consider that its implementation cannot be regarded as proportionate to the objectives pursued by the association agreement.

112. First, as regards the subjective scope of the non-competition clause, I would point out that, although the association agreement concerns the supply of low-voltage electricity to consumers, the non-competition clause covers the entire supply of electricity at all voltages, including the supply of medium- and high-voltage electricity to industrial customers and the supply of gas.

113. Second, as regards the fact that the temporal scope of the non-competition clause coincides with the period in which the parties to the association agreement at issue in the main proceedings were not authorised to use trade secrets or know-how acquired in the course of its implementation, it must be stated that, while acknowledging that that fact is established, (101) it appears from the facts of the case that, since the last discount vouchers issued to consumers were based on their consumption up to 31 December 2012, a restriction intended to protect commercially sensitive information until 31 December 2013 seems to me, prima facie, to be disproportionate.

4.      The characterisation of the competition clause as restricting competition ‘by object’

114. By its first and eighth questions for a preliminary ruling, which it is appropriate to examine together, the referring court asks, in essence, whether a non-competition clause which, within the framework of an association agreement, consists of prohibiting inter alia the party to that agreement which is a food retailer from entering the market for the supply of electricity on which the other party to that agreement is a major player, at the time of the final stage of the liberalisation of that market, is capable of constituting a restriction by object, even though (i) consumers derive certain benefits from that agreement (first question) and (ii) that clause is limited to the duration of the agreement plus one additional year (eighth question).

(a)    The concept of an ‘anticompetitive object’ as provided for in Article 101(1) TFEU

115. The distinction between a restriction by object or by effect, which is the subject of the questions posed by the referring court to the Court, has already been the subject of extensive and detailed case-law. Accordingly, I shall simply recall that, in order to be caught by the prohibition laid down in Article 101(1) TFEU, an agreement must have as its ‘object or effect’ the prevention, restriction or distortion of competition on the internal market, the anticompetitive object and effect of an agreement being conditions which are not cumulative but alternative. (102)

116. In that respect, I note that that essential legal criterion for ascertaining whether an agreement involves a restriction of competition ‘by object’ is the finding that such an agreement reveals in itself a sufficient degree of harm to competition for it to be considered that it is not necessary to assess its effects. (103) That arises from the fact that certain types of coordination between undertakings can be regarded, by their very nature, as being harmful to the proper functioning of normal competition. (104) In order to determine whether an agreement reveals such a degree of harm, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms a part. (105) When determining that context, it is also necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question. (106) Lastly, the concept of restriction of competition ‘by object’ must be interpreted strictly. (107)

(b)    The assessment of the non-competition clause

117. The non-competition clause at issue in the main proceedings, assuming that it is not a restriction ancillary to the association agreement and assuming the existence of potential competition is established, may be treated in the same way as a market sharing agreement which, like a price fixing agreement, constitutes an obvious restriction of competition, traditionally regarded as a particularly serious infringement of competition rules. The Court has held that agreements which aim to share markets have, in themselves, an object restrictive of competition and fall within a category of agreements expressly prohibited by Article 101(1) TFEU. In respect of such agreements, the analysis of the economic and legal context of which the practice forms part may thus be limited to what is strictly necessary in order to establish the existence of a restriction of competition by object. (108)

118. Although, according to that case-law, it is not necessary to take account of the economic context of the non-competition clause, its consideration in the present case further confirms its restrictive nature. In the present case, the application of the non-competition clause coincided with the particular context of the liberalisation of the market for the supply of low-voltage electricity in mainland Portugal. More specifically, that clause was concluded a few months before the full liberalisation of the market for the supply of electricity, which corresponded to the end of regulated prices for all end consumers. In that context, the incumbent Portuguese operator on that market, EDP, had an interest in deferring the entry of potential competitors to that market. It therefore appears to me that that context is likely to further reinforce the harmful nature of a market sharing agreement between an incumbent operator and a potential new entrant.

119. Finally, I consider that the fact that that non-competition clause is part of a wider cooperation, namely the association agreement, which may generate efficiencies in the interest of certain consumers, does not alter the conclusion that such a market sharing agreement constitutes in itself a restriction by object. For the reasons set out above, that clause did not constitute a restriction that was necessary for the application of the association agreement and, consequently, for the achievement of the efficiencies to which it was capable of giving rise. In that sense, those possible gains were not linked to the non-competition clause but rather to the association agreement and cannot therefore be relied on in order to justify that clause as procompetitive. In any event, in accordance with the case-law of the Court, where the parties to an agreement rely on its procompetitive effects, those effects must, as elements of the context of that agreement, be duly taken into account for the purpose of its characterisation as a ‘restriction by object’, in so far as they are capable of calling into question the overall assessment of whether the concerted practice concerned revealed a sufficient degree of harm to competition and, consequently, of whether it should be characterised as a ‘restriction by object’. (109)

120. It follows that, in the particular circumstances of the present case, the non-competition clause – assuming that it is found not to be a restriction ancillary to the association agreement and the parties to the association agreement are found to be potential competitors at the very least – ought to be assessed as a restriction of competition by object, for the purposes of Article 101(1) TFEU, which requires no specific analysis of its effects.

IV.    Conclusion

121. In the light of the foregoing, I propose that the Court should answer the questions referred for a preliminary ruling by the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon, Portugal) as follows:

(1)      Article 101(1) TFEU must be interpreted as meaning that a food retailer, bound by an association agreement with an electricity supplier the purpose of which is to promote, by a system of linked sales, their respective activities and which includes a non-competition clause, may be regarded as a potential competitor on the market for the supply of electricity even though, when that agreement was concluded, it was not carrying on any activity on that market, if, having regard to the conditions of entry on that market, and the economic and legal context governing its operation, it is demonstrated that there were real and concrete possibilities of that retailer joining that market, such demonstration having to be based on evidence specific to the market for the supply of electricity. In order to determine whether such an undertaking can be considered to be a potential competitor thereby representing a competitive constraint for the electricity supplier, it may be relevant to consider items of evidence – taken together and which are not necessarily decisive in themselves – concerning, inter alia: (i) the intention of the food retailer to enter the market for the supply of electricity, as evidence supporting its ability to enter that market; (ii) preparatory steps taken with a view to entering the market, in particular in the light of any regulatory constraints or constraints specific to the opening up of the electricity supply market, which would be capable of strengthening the ability of that undertaking to enter that market within a period of time such as to exert competitive pressure, which, in the present case, corresponds to the duration of the non-competition clause; (iii) the electricity supplier’s perception of the food retailer, the fact of having inserted a non-competition clause constituting a strong indication that potentially competition exists which must however be supported by other factors relating to the reality of the conditions for accessing the market; (iv) the various activities of the other undertakings in the group to which the retailer belongs on the market for the supply of electricity or on adjacent markets, provided that a link is established between those activities and that retailer’s ability to enter that market within a short period of time, even where those activities predate the conclusion of the association agreement and irrespective of whether or not those undertakings were bound by the non-competition clause; and (v) the activities of the food retailer on the upstream market for the production of electricity, provided that those activities are capable of conferring on it real and concrete advantages, with a view to possibly entering the market for the supply of electricity.

(2)      Article 1(1)(a) of Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) [TFEU] to categories of vertical agreements and concerted practices must be interpreted as meaning that an association agreement between a food retailer and an electricity supplier the purpose of which is to promote, by a system of linked sales, their respective activities, does not fall within the concept of a ‘vertical agreement’, irrespective of whether those undertakings must be regarded as actual or potential competitors, since those undertakings are presumed to act, for the purposes of the cooperation agreement, at the same level of the economic chain.

(3)      Article 101(1) TFEU must be interpreted as meaning that a non-competition clause agreed between the parties in the context of an association agreement, such as that in the case in the main proceedings, should not fall outside the application of that provision on the ground that that clause is ancillary in the context of that agreement, unless it is demonstrated that such a clause is objectively necessary for the implementation of the association and proportionate to the objectives pursued by it.

(4)      Article 101(1) TFEU must be interpreted as meaning that a non-competition clause, such as that in the association agreement at issue in the main proceedings – provided that it is concluded between two undertakings regarded as, at the very least, potential competitors – must be regarded as a market sharing agreement constituting a restriction of competition by object, there being no need to demonstrate its actual harmful effects, unless that clause can be regarded as a restriction ancillary to the main agreement or the parties rely on its procompetitive effects which are capable of calling into question the overall assessment of whether that clause reveals a sufficient degree of harm.

1      Original language: French.

2      With the exception of Sonae MC – Modelo Continente SGPS, which was not fined because it had no turnover, and was acquired by Sonae Investimentos, which changed its name to Sonae MC.

3      Article 9(1) of Lei No 19/2012, de 8 de maio, que aprova o novo regime jurídico da concorrência, revogando as Leis n^os 18/2003, de 11 de junho, e 39/2006, de 25 de agosto, e procede à segunda alteração à Lei No 2/99, de 13 de janeiro (Law No 19/2012 of 8 May 2012 laying down new rules of law governing competition, and repealing Law No 18/2003 of 11 June 2003 and Law No 39/2006 of 25 August 2006, and amending for the second time Law No 2/99 of 13 January 1999) (Diário da República, Series I, No 89, of 8 May 2012, ‘the Portuguese Law on Competition’) provides that: ‘Agreements between undertakings … which have as their object or effect the prevention … of competition on part or the whole of the national market shall be prohibited, in particular those which: … (c) share markets or sources of supply;’.

4      In particular, retail distribution, telecommunications and audiovisuals, the management of shopping centres, wood products, tourism and energy production through cogeneration or photovoltaics.

5      Each month MCH had to issue a debit note for the amount of the vouchers issued and activated during the previous month, which had to be paid at the end of the month in which each invoice was issued.

6      Transitional tariff regimes were, however, established for consumers who, on those dates, had not chosen to enter into a contract on the liberalised market. Tariffs set by the Entidade Reguladora dos Serviços Energeticos (Energy Services Regulatory Authority, Portugal) were applied to those consumers, with increased prices to encourage the transition to the liberalised market. The last of those schemes expired on 31 December 2017.

7      The TCRS justified that reduction by the fact that the association agreement had enabled various Portuguese families to benefit from significant discounts and to purchase essential goods. The following fines were imposed on applicants in the main proceedings: EDP Energias EUR 2 610 000, EDP Comercial EUR 23 220 000, Sonae Investimentos EUR 2 520 000 and MCH EUR 6 120 000.

8      See point 76 of the present Opinion.

9      See point 81 of the present Opinion.

10      See point 83 of the present Opinion.

11      The AdC submits that the benefits to consumers resulting from the association agreement cannot be relied on as a basis for reducing the amount of the fine and that, in any event, the 10% reduction is excessive.

12      The applicants in the main proceedings submitted, inter alia, that: (i) there was neither actual nor potential competition on the date when the association agreement was concluded and, therefore, the non-competition clause cannot be considered to have anticompetitive effects; (ii) the object of that agreement was not restrictive of competition and (iii) there were no factual or legal grounds on which the parent companies concerned could be held liable.

13      Commission Regulation of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices (OJ 2010, L 102, p. 1).

14      Herein, the ‘Guidelines on Vertical Restraints’.

15      Judgment of 30 January 2020, Generics (UK) and Others (C‑307/18, EU:C:2020:52, paragraph 25 and the case-law cited; ‘the judgment in Generics (UK)’).

16      Where, in regulating purely internal situations, national legislation adopts the same solutions as those adopted in EU law in order, for example, to avoid any distortion of competition, or to ensure that a single procedure is applied in comparable situations, there is clearly an interest in ensuring that, in order to forestall future differences of interpretation, provisions or concepts taken from EU law should be interpreted uniformly (see, to that effect, judgment in Generics (UK), paragraphs 26 and 27).

17      According to the referring court, the wording of that provision ‘is in substance the same as the wording of Article 101(1) TFEU’.

18      The requirements of Article 94 of the Rules of Procedure are recalled in paragraph 15 of the Recommendations [of the Court] to national courts and tribunals in relation to the initiation of preliminary ruling proceedings (OJ 2019 C 380, p. 1).

19      See judgment of 3 March 2021, Poste Italiane and Agenzia delle entrate – Riscossione (C‑434/19 and C‑435/19, EU:C:2021:162, paragraph 77 and the case-law cited).

20      The request for a preliminary ruling contains 277 pages which lack structure and coherence and in which little effort has been made to summarise.

21      Only a limited part of the 298 points dedicated to the ‘established facts’ is relevant for the purpose of providing useful answers to the referring court.

22      See the original request for a preliminary ruling, p. 84 to 146 (paragraphs 1 to 298).

23      See the original request for a preliminary ruling, p. 167 to 169 (paragraphs 1 to 13).

24      See the original request for a preliminary ruling, p. 229.

25      See judgment of 6 October 2021, Sumal (C‑882/19, EU:C:2021:800, paragraph 28).

26      See judgment of 23 January 2018, F. Hoffmann-La Roche and Others (C‑179/16, EU:C:2018:25, paragraph 45; ‘the judgment in Hoffmann-La Roche’).

27      Judgment in Generics (UK), paragraph 58.

28      See point 47 and footnote 38 of the present Opinion.

29      Judgment in Generics (UK), paragraphs 36 to 39 and the case-law cited.

30      To that end, in Generics (UK), the Court verified whether: (i) at the time when that agreement was concluded, the manufacturer of generic medicines had taken sufficient preparatory steps to enable it to enter the market concerned within such a period of time as would impose competitive pressure on the manufacturer of originator medicines (paragraphs 43 and 44); (ii) the market entry of such a manufacturer did not meet barriers to entry that were insurmountable (paragraphs 45 to 53); (iii) there were additional factors confirming the finding that a manufacturer of generic medicines had a firm intention and an inherent ability to enter the market in question, such as the fact that the undertaking in question operated at the same level in the production chain or the intention, made known by a manufacturer of originator medicines and acted upon, to make transfers of value to a manufacturer of generic medicines in exchange for the postponement of the latter’s market entry (paragraphs 55 to 57).

31      See Opinion of Advocate General Kokott in Generics (UK) and Others (C‑307/18, EU:C:2020:28, point 57 and the case-law cited; ‘the Opinion in Generics (UK)’).

32      See Opinion in Generics (UK), point 58 and the case-law cited.

33      That explains why the contention put forward by the Commission in its observations, inspired by the judgment of the General Court of 12 December 2018, Servier and Others v Commission (T‑691/14, EU:T:2018:922, paragraphs 318 to 320; ‘the judgment of the General Court in Servier’), according to which the threshold for a finding that there is potential competition varies according to the harmful nature of the agreement, is, in my view, methodologically flawed.

34      See Commission Notice on the definition of relevant market for the purposes of Community competition law (OJ 1997 C 372, p. 5, paragraph 13), the other sources of competitive constraints being (i) demand-side substitutability and (ii) supply-side substitutability.

35      Commission Notice on the definition of relevant market for the purposes of Community competition law, paragraph 24, and judgment of 30 September 2003, Atlantic Container Line and Others v Commission (T‑191/98 and T‑212/98 to T‑214/98, EU:T:2003:245, paragraph 834).

36      See my Opinion in Servizio Elettrico Nazionale and Others (C‑377/20, EU:C:2021:998, point 110).

37      The prospective nature of that concept makes it highly relevant in the context of the control of concentrations between undertakings (see Article 2(1)(a) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1) and Annex I to Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing Council Regulation (EC) No 139/2004 (OJ 2004 L 133, p. 1, as amended, in particular, by Commission Implementing Regulation No 1269/2013 of 5 December 2013), namely the ‘Form CO’ relating to the notification of a concentration which provides in point 6.4, with regard to the analysis of ‘other markets in which the notified operation may have a significant impact’, that ‘a party may be considered a potential competitor, in particular, where it has plans to enter a market, or has developed or pursued such plans in the past three years’). See also paragraphs 58 to 60 of the Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings (OJ 2004 C 31, p. 5).

38      See judgments of 25 January 2007, Salzgitter Mannesmann v Commission (C‑411/04 P, EU:C:2007:54); of 20 January 2016, Toshiba Corporation v Commission (C‑373/14 P, EU:C:2016:26; ‘the judgment in Toshiba’); of 15 September 1998, European Night Services and Others v Commission (T‑374/94, T‑375/94, T‑384/94 and T‑388/94, EU:T:1998:198; ‘the judgment in ENS’); of 8 July 2004, Mannesmannröhren-Werke v Commission (T‑44/00, EU:T:2004:218); of 14 April 2011, Visa Europe and Visa International Service v Commission (T‑461/07, EU:T:2011:181; ‘the judgment in Visa Europe’); of 29 June 2012, E.ON Ruhrgas and E.ON v Commission (T‑360/09, EU:T:2012:332; ‘the judgment in E.ON Ruhrgas’); of 21 May 2014, Toshiba v Commission (T‑519/09, EU:T:2014:263, not published; ‘the judgment of the General Court in Toshiba’); and of 28 June 2016, Portugal Telecom v Commission (T‑208/13, EU:T:2016:368; ‘the judgment in Portugal Telecom’).

39      Judgment of 28 February 1991, Delimitis (C‑234/89, EU:C:1991:91, paragraphs 21 and 22).

40      Judgment in ENS, paragraphs 137 to 142.

41      See footnote 38 of the present Opinion, and judgments of 22 March 2011, Altstoff Recycling Austria v Commission (T‑419/03, EU:T:2011:102, paragraph 65) and in Visa Europe, paragraphs 22 and 83.

42      Judgment in Visa Europe, paragraphs 84 and 85.

43      Judgment in E.ON Ruhrgas, paragraph 105.

44      By way of example, the following were considered relevant: the limited nature of the domestic market on an air transport route (judgment of 4 July 2006, easyJet v Commission (T‑177/04, EU:T:2006:187, paragraph 118)); barriers to market entry in the light of the historical monopoly (judgment in E.ON Ruhrgas, paragraph 94); the specific characteristics of transatlantic maritime transport (judgment of 28 February 2002, Atlantic Container Line and Others v Commission (T‑395/94, EU:T:2002:49, paragraph 356)); the acceptance of projects from clients situated in a different geographic market (judgment of the General Court in Toshiba, paragraph 232).

45      See, to that effect, paragraph 10 of the Communication from the Commission of 14 January 2011 containing Guidelines on the applicability of Article 101 [TFEU] to horizontal cooperation agreements (OJ 2011 C 11, p. 1, ‘the Guidelines on horizontal cooperation agreements’).

46      Namely agreements concluded between, on the one hand, manufacturers of originator medicines which are holders of a manufacturing process patent for an active ingredient that is in the public domain and, on the other, manufacturers of generic medicines, under which the latter undertook not to enter (or delay their entry to) the market of the originator medicine containing that generic active ingredient in return for payment to them by the manufacturer of the patented medicines.

47      A market is considered ‘contestable’ where (i) there are no barriers to entry or exit; (ii) all firms, both incumbents and potential entrants, have access to the same production technology; (iii) there is perfect information on prices, available to all consumers and firms; (iv) entrants can enter and exit before incumbents can adjust prices (see ‘Glossary of Industrial Organisation Economics and Competition Law’, Organisation for Economic Co-operation and Development (OECD, 1993, p. 29, available at: https://www.oecd.org/regreform/sectors/2376087.pdf.).

48      See points 39 and 47 of the present Opinion.

49      See, also to that effect, judgment of 25 March 2021, Lundbeck v Commission (C‑591/16 P, EU:C:2021:243, paragraph 54 and the case-law cited; ‘the judgment in Lundbeck’,).

50      See, to that effect, ‘Concept of potential competition’, OECD Competition Committee Discussion Paper, OECD, 2021, p. 15; and Dunne, N., ‘Potential competition in EU law’, ECLR 2021, 42(12), p. 639.

51      Judgment in Generics (UK), paragraph 38.

52      Judgment of 8 September 2016, Lundbeck v Commission (T‑472/13, EU:T:2016:449, paragraph 100 and the case-law cited); ‘the General Court judgment in Lundbeck’.

53      See proven fact No 32 in the order for reference.

54      See paragraph 686 of the contested decision.

55      See point 48 of the present Opinion.

56      See judgment of the General Court in Toshiba, paragraph 93.

57      See, to that effect, judgment in E.ON Ruhrgas, paragraph 106.

58      In view of the highly factual nature of the questions referred, I would point out that, in the context of the procedure referred to in Article 267 TFEU, the role of the Court of Justice is limited to interpreting provisions of EU law. Therefore, it is not for the Court of Justice, but for the referring court to determine in the end whether, taking account of all of the information relevant to the situation in the main proceedings and the economic and legal context of which it forms a part, the agreement at issue has as its object the restriction of competition (see, to that effect, judgment of 18 November 2021, Visma Enterprise (C‑306/20, EU:C:2021:935, paragraphs 51 and 52)).

59      See judgments of the General Court in Visa Europe, paragraph 168; in E.ON Ruhrgas, paragraph 87; in Portugal Telecom, paragraph 186; and in Servier, paragraph 318.

60      See judgments of the General Court of 29 June 2012, GDF Suez v Commission (T‑370/09, EU:T:2012:333, paragraph 84); in Visa Europe, paragraph 169; and in Lundbeck, paragraph 102.

61      See judgment of 2 April 2020, Budapest Bank and Others (C‑228/18, EU:C:2020:265, paragraph 53 and the case-law cited).

62      See judgment in Generics (UK), paragraph 55.

63      Judgment in Lundbeck, paragraphs 56, 57 and 117.

64      Judgment of the General Court in Servier, paragraph 382.

65      Judgment in Generics (UK), paragraph 43.

66      Judgment in Generics (UK), paragraphs 41 and 44. The regulatory and legal constraints consisted of: (i) the required authorisations for the marketing of a generic version of the medicine concerned (the issuing of a marketing authorisation by the national competent authority); (ii) the requirements for maintaining an adequate stock; and (iii) the legal steps with a view to challenging the process patents held by a manufacturer of originator medicines. For a description of the steps that must be taken in order to enter that market, see, also, judgment of the General Court in Servier, paragraph 337.

67      See, by analogy, judgment of the General Court in Servier, paragraphs 333 to 336.

68      See, in that regard, points 13 and 85 of the present Opinion. See, also, judgment in E.ON Ruhrgas, in which the General Court did not find any preparatory steps in the assessment of real, concrete possibilities of entering the market for the supply of natural gas.

69      Judgment in Generics (UK), paragraphs 56, 57 and 42, and Opinion in Generics (UK), points 60 and 86. See, also to that effect, judgment of the General Court in Lundbeck, paragraph 104).

70      See the original request for a preliminary ruling, p. 244.

71      See, to that effect, judgments in Toshiba, paragraphs 33 and 34; in Portugal Telecom, paragraph 180; of 28 June 2016, Telefónica v Commission (T‑216/13, EU:T:2016:369, paragraphs 218 and 227; ‘the judgment in Telefónica’); and in Lundbeck, paragraph 144.

72      See, however, point 104 of the present Opinion, concerning possible justifications for non-competition clauses.

73      See, to that effect, judgment in Portugal Telecom, paragraphs 178 to 180.

74      It is argued that that association took the form of a joint undertaking, Sodesa, 50% of which was owned by each of the participating companies, and which had the objective of supplying electricity on the liberalised Portuguese market. Sonae Capital’s involvement lasted from 2002 until 2008 when Sodesa ceased trading.

75      See, to that effect, judgments of the General Court in Lundbeck, paragraph 138, and in Servier, paragraph 385.

76      MCH submits that, following the dissolution of Sodesa, the officials who had participated in that association ceased working for the Sonae Group.

77      See, in that regard, the analysis in point 85 of the present Opinion.

78      It is argued that such clauses are laid down, inter alia, in Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (OJ 1986 L 382, p. 17), Article 7(2) and Article 20.

79      See Guidelines on Vertical Restraints (OJ 2010 C 130, p. 1, ‘the Guidelines on Vertical Restraints’, paragraphs 5 to 7).

80      See Regulation No 330/2010, recitals 3 to 5.

81      See Regulation No 330/2010, recital 6.

82      See Regulation No 330/2010, recital 7.

83      See the Guidelines on Vertical Restraints, paragraphs 12 to 21.

84      See the Guidelines on Vertical Restraints, paragraph 12.

85      See the Guidelines on Vertical Restraints, paragraphs 15 and 18.

86      See the Guidelines on Vertical Restraints, paragraph 18. Such obligations which are inherent in an agency agreement capable of determining the commercial strategy of the principal are those which impose restrictions on the territory in which or the customers to whom the agent may sell the principal’s goods or services, and the prices and conditions of those sales.

87      More specifically, they submit that that agreement contained all the elements establishing an agency agreement, in particular: (i) the mutual obligation to promote contracts on behalf of others (ii) their autonomy; and (iii) the pecuniary nature of the association agreement, which corresponded to the payment of the agent consisting of the remuneration to which the other party was bound.

88      See point 7 of the present Opinion.

89      Although the name given to an agreement is not decisive in establishing its nature, the fact remains that the applicants did classify their agreement not as an ‘agency agreement’ or as a ‘distribution’ agreement, but rather as an ‘association’ agreement.

90      See point 91 of the present Opinion.

91      See point 11 of the present Opinion.

92      I note that that definition has been retained in Article 1(1) of Commission Regulation (EU) 2022/720 of 10 May 2022 on the application of Article 101(3) [TFEU] to categories of vertical agreements and concerted practices (OJ 2022 L 134, p. 4), which entered into force on 1 June 2022 and replaced Regulation No 330/2010. See, also, the Guidelines on Vertical Restraints, paragraphs 24 to 26.

93      That point is analysed in Section III.B.3 of the present Opinion.

94      Moreover, the fact that an agreement constitutes a vertical agreement does not exclude the possibility that it includes a restriction of competition ‘by object’. While vertical agreements are, by their nature, often less damaging to competition than horizontal agreements, they can, nevertheless, in some cases, also have a particularly significant restrictive potential (see, to that effect, judgments of 14 March 2013, Allianz Hungária Biztosító and Others (C‑32/11, EU:C:2013:160, paragraph 43), and of 26 November 2015, Maxima Latvija (C‑345/14, EU:C:2015:784, paragraph 21)).

95      See the Guidelines on horizontal cooperation agreements, paragraphs 225 to 228.

96      See, respectively, (i) the first, (ii) the second and (iii) the third and fourth indents of the tenth question referred for a preliminary ruling.

97      See judgment of 18 September 2001, M6 and Others v Commission (T‑112/99, EU:T:2001:215, paragraphs 104 to 106). See, also, Commission Notice on restrictions directly related and necessary to concentrations (2005/C 56/03) (OJ 2005 C 56, p. 24), paragraph 12.

98      See judgments of 25 October 1977, Metro SB-Großmärkte v Commission (26/76, EU:C:1977:167) and of 28 January 1986, Pronuptia de Paris (161/84, EU:C:1986:41). For application in the regulatory field, see my Opinion in European Superleague Company (C‑333/21, EU:C:2022:993, points 85 to 124).

99      See, to that effect, judgments of 11 September 2014, MasterCard and Others v Commission (C‑382/12 P, EU:C:2014:2201, paragraph 89 and the case-law cited; ‘the judgment in MasterCard’) and in Hoffmann-La Roche, paragraph 69.

100      See, to that effect, judgments in MasterCard, paragraph 90 and in Hoffmann-La Roche, paragraph 70. Where it is a matter of determining whether an anticompetitive restriction can escape the prohibition laid down in Article 101(1) TFEU because it is ancillary to a main operation which is not anticompetitive in nature, it is necessary to inquire whether that operation would be impossible to carry out in the absence of the restriction in question. The fact that that operation is simply more difficult to implement, or even less profitable, without the restriction concerned cannot be deemed to give that restriction the ‘objective necessity’ required in order for it to be classified as ancillary. Such an interpretation would effectively extend that concept to restrictions which are not strictly indispensable to the implementation of the main operation. Such an outcome would undermine the effectiveness of the prohibition laid down in Article 101(1) TFEU (see, to that effect, judgments in MasterCard, paragraph 91 and in Hoffmann-La Roche, paragraph 71).

101      In that regard, see the original request for a preliminary ruling, p. 168, points 5 and 6, which stated that the fact that the non-competition clause was aimed at safeguarding ‘the confidentiality of commercially sensitive information shared inter partes and the know-how arising from the association’ and the ‘business secrets, confidential information, commercially sensitive information and investments which the parties shared under the aegis of the EDP Continente Scheme’ is one of the ‘facts that have not been established’.

102      See, to that effect, my Opinion in European Superleague Company (C‑333/21, EU:C:2022:993, points 58 to 63 and the case-law cited).

103      See judgment of 12 January 2023, HSBC Holdings, (C‑883/19 P, EU:C:2023:11, paragraph 106 and the case-law cited).

104      Judgment of 11 September 2014, CB v Commission (C‑67/13 P, EU:C:2014:2204, paragraph 50 and the case-law cited).

105      See judgments of 14 March 2013 in Allianz Hungária  Biztosító and Others (C‑32/11, EU:C:2013:160, paragraph 34), and of 11 September 2014, CB v Commission (C‑67/13 P, EU:C:2014:2204 paragraph 53).

106      See judgment of 12 January 2023, HSBC Holdings, (C‑883/19 P, EU:C:2023:11, paragraph 107 and the case-law cited).

107      Judgment in Generics (UK), paragraph 67 and the case-law cited.

108      See judgment in Toshiba, paragraphs 28 and 29.

109      Judgment of 12 January 2023, HSBC Holdings, (C‑883/19 P, EU:C:2023:11, paragraphs 139 to 141, and the case-law cited).

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