Elda Shuraja August 18 2011 New regulation on specialisation agreements introduced Hoxha Memi & Hoxha | Competition & Antitrust - Albania Elda Shuraja Competition & Antitrust In order to harmonise Albanian legislation with EU law - and in particular with EU Regulation 1218/2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to certain categories of specialisation agreement - on May 26 2011 the Albanian Competition Authority approved the Regulation on the Exemption of Specialisation Agreements. The regulation provides for the block exemption of certain types of agreement from the scope of Article 4 of the Competition Law, which prohibits agreement whose purpose or effect is the prevention, restriction or distortion of competition. Under the regulation, all other specialisation agreements relating to the production of goods or provision of services are exempt from Article 4 of the Competition Law. The exemption also applies to agreements that relate directly to implementation, as well as purchase and/or marketing issues. The regulation categorises specialisation agreements as either unilateral specialisation agreements, reciprocal specialisation agreements or joint production agreements, as follows: Unilateral specialisation agreements are an agreements between two parties which are active in the same market, through which one party agrees to cease production of certain products or to refrain from producing those products and instead purchase them from the other party, which agrees to produce and supply those products. Reciprocal specialisation agreements are agreements between two or more parties which are active in the same market, through which two or more parties agree, on a reciprocal basis, to cease production of certain products or to refrain from producing those products and instead purchase these products from the other parties, which agree to produce and supply them. Joint production agreements are agreements through which two or more parties agree to produce jointly certain closely related products. The new regulation provides that Article 4 of the Competition Law will not apply to specialisation agreements, to the extent that such agreements contain restrictions of competition that fall within the scope of Article 4. The exemption applies to specialisation agreements that contain provisions relating to the assignment or licensing of IP rights to one or more parties, provided that such provisions do not constitute the primary purpose of such agreements, but are directly related to and necessary for their implementation. The exemption further applies to specialisation agreements under which: the parties enter into an exclusive purchase or exclusive supply obligation; or the parties enter into a joint distribution arrangement. In all cases the exemption applies only if: the parties' combined market share does not exceed 20% of the relevant market; and the specialisation agreement contains no hardcore restrictions, such as provisions aimed at price fixing, production limitation or market allocation. The regulation also sets out the rules for calculating the market share threshold. It provides, among other things, that: if the parties' market share initially does not exceed 20%, but subsequently increases to below 25%, the exemption will apply for two-year period following the year in which the 20% threshold is first exceeded; and if the market share initially does not exceed 20%, but subsequently increases above 25%, the exemption will apply for a one-year period following the year in which the 20% threshold is first exceeded. For further information on this topic please contact Elda Shuraja at Hoxha Memi & Hoxha by telephone (+355 4 227 4558), fax (+355 4 224 4047) or email ([email protected]).