Competition law boundaries on research and development (R&D) agreements

Article 101 of the Treaty on the Functioning of the European Union (hereinafter – TFEU) prohibits agreements restricting competition. Article 101(3) provides for certain exceptions to this prohibition. All three Baltic States are bound by the TFEU and the exemption. On January 1, 2011, European Commission Regulation No 1217/2010 (hereinafter – Regulation 1217) entered into the force; this regulation elaborates the exceptions provided in Article 101(3). Article 101(3) applies when agreements restricting competition meet four requirements. Some of the requirements in Regulation 1217 are currently too loose and easily abused. Other requirements, however, are too restrictive and could be loosened. So far Baltic research companies have contributed little to the economic growth and prosperity of Baltic States. Laser engineering industry in Lithuania, for example, is an exception. Still, Baltic research companies have the potential to become serious competitors in the European market.