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Sustainability and competition
law: What is discussed in the
Guideline?

The European Commission updated its Guideline on
competition law and added the title "Sustainability
Agreements". The main purpose of these amendments is
to encourage the business world to be more sensitive to
environmental issues.

By including sustainability agreements in the Guideline, the
European Commission has emphasized that agreements that
serve environmental, social and other sustainability goals will
not be blocked, regardless of the form of cooperation. These
agreements are defined based on environmental, climate
and social goals, as well as the United Nations Sustainable
Development Goals. Sustainability agreements other than
Article 101 of Treaty on the Functioning of European the
European Union (TFEU) generally refer to agreements that
do not adversely affect competition. These agreements
are carried out in line with objectives that do not affect
competition parameters but promote sustainability.

The guideline states that sustainability agreements are
evaluated within the scope of Article 101 of TFEU in cases
where they negatively affect competition parameters,
but also emphasizes that such agreements are generally
not seen as purpose restrictions and their effects
should be evaluated first. When examining the effects
of agreements on competition, the market power of the
parties, decision-making independence, degree of market
coverage, commercial information sharing and price/
quality effects are taken into account. The guideline also
states that sustainability agreements may be exempt from
the scope of Article 101 if they meet certain conditions.
These include tangible gains, indispensable restrictions,
fair consumer transfer and no excessive competition
restrictions. In addition, a 'soft safe harbour' application
is included for sustainability standardization agreements
that meet certain conditions. Sustainability standardization
agreements include agreements used to determine various
sustainability metrics among businesses in a supply chain.
There are six conditions for these agreements to constitute
a 'soft safe harbour'. These conditions are transparency
of the sustainability standard, no obligation, flexibility of
participating companies, protection of sensitive information,
fair access and protection of competition. Meeting these
conditions means that the agreement will not negatively
affect competition, while if they are not met, an individual
evaluation is required. Examples of such agreements include
phasing out unsustainable products, promoting recycling,
and purchasing sustainable production inputs.
The principles regarding sustainability agreements set
out by the European Commission in the Guideline have
received widespread support due to the need to adopt a
consistent approach across the EU. While environmental Explanations in this article reflect the writer's personal view on the
and climate concerns continue, it is anticipated that the matter. EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. disclaim any
issue of sustainability will be encountered more frequently responsibility in respect of the information and explanations in the
in competition law. In our country, updating the Guide on article. Please be advised to first receive professional assistance from
Horizontal Cooperation Agreements to include the Board the related experts before initiating an application regarding a specific
approach to sustainability agreements may be beneficial for matter, since the legislation is changed frequently and is open to different
interpretations.
businesses that will operate in this field in the future.
10 November 2023 Kasım 2023