(4) For the application of Article 101(3) of the Treaty by regulation, it is not necessary to define those agreements which are capable of falling within Article 101(1) of the Treaty. In the individual assessment of agreements under Article 101(1) of the Treaty, account has to be taken of several factors, and in particular the structure of the relevant market.

(5) The benefit of the exemption established by this Regulation should be limited to those agreements for which it can be assumed with sufficient certainty that they satisfy the conditions of Article 101(3) of the Treaty. Below a certain level of market power, it can in general be presumed, for the application of Article 101(3) of the Treaty, that the positive effects of specialisation agreements will outweigh any negative effects on competition.

(6) This Regulation should apply to agreements concerning the manufacture of goods and the preparation of services. The preparation of services refers to activities carried out upstream of the provision of services to customers (for example, cooperation in the creation or operation of a platform through which a service will be provided). The provision of services to customers falls outside the scope of this Regulation, except where the parties agree to jointly provide services prepared under the specialisation agreement.

(7) Specialisation agreements are most likely to contribute to improving the manufacture of goods or the preparation of services and their distribution if the parties have complementary skills, assets or activities, because, in that case, the agreement allows them to focus on the manufacture of certain goods or the preparation of certain services and thus operate more efficiently and supply the products more cheaply. Given effective competition, it is likely that consumers will receive a fair share of the resulting benefits.

(8) Such benefits can arise first from agreements whereby one or more parties fully or partly give up the manufacture of certain goods or the preparation of certain services in favour of another party or parties (‘unilateral specialisation’); second, from agreements whereby two or more parties fully or partly give up the manufacture of certain but different goods or the preparation of certain but different services in favour of another party or parties (‘reciprocal specialisation’), and third, from agreements whereby two or more parties undertake to jointly manufacture certain goods or prepare certain services (‘joint production’).

(9) The application of this Regulation to unilateral and reciprocal specialisation agreements should be limited to scenarios where the parties are active on the same product market. However, it is not necessary for the parties to be active on the same geographic market. In addition, the concepts of unilateral and reciprocal specialisation should not require a party to reduce capacity, as it is sufficient if they reduce their production volumes.

(10) To ensure that the benefits of specialisation materialise without one party leaving the market downstream of production entirely, unilateral and reciprocal specialisation agreements should only be covered by this Regulation where they provide for supply and purchase obligations. Supply and purchase obligations may be, but do not have to be, of an exclusive nature.

(11) This Regulation should apply to joint production agreements entered into by parties that are already active on the same product market but also by parties that wish to enter a product market by means of the joint production agreement. The concept of joint production agreement should not require the parties to reduce their individual activities regarding the manufacture of goods or preparation of services outside the scope of their envisaged joint arrangement.

(12) It can be presumed that, where the parties’ share of the relevant market for the products which are the subject of a specialisation agreement does not exceed a certain level, the agreement will, as a general rule, give rise to economic benefits in the form of economies of scale or scope or better production technologies, while allowing consumers a fair share of the resulting benefits.

(13) Where the products covered by a specialisation agreement are intermediary products that are fully or partly used captively by one or more of the parties as an input for their own production of downstream products which they subsequently sell on the market, the exemption conferred by this Regulation should also be conditional on the parties’ market share on the relevant market for those downstream products not exceeding a certain level. In that case, taking into account the parties’ market share only at the level of the intermediary product would ignore the potential risk of foreclosing or increasing the price of inputs for competitors at the level of the downstream products.

(14) There is no presumption that specialisation agreements are either caught by Article 101(1) of the Treaty or that they fail to satisfy the conditions of Article 101(3) of the Treaty where the market share threshold set out in this Regulation is exceeded or other conditions of this Regulation are not met. In such cases, it is necessary to conduct an individual assessment of the specialisation agreement under Article 101 of the Treaty.

(15) The exemption established by this Regulation should not apply to agreements containing restrictions which are not indispensable to the attainment of the positive effects generated by specialisation agreements. In principle, agreements containing certain types of severe restrictions of competition, such as the fixing of prices charged to third parties, the limitation of output or sales, and the allocation of markets or customers should be excluded from the benefit of the exemption established by this Regulation, irrespective of the market share of the parties.

(16) The market share threshold, the non-exemption of certain agreements and the conditions provided for in this Regulation generally ensure that the agreements to which the block exemption applies do not enable the parties to eliminate competition in respect of a substantial part of the goods or services in question.

(17) This Regulation should indicate typical situations in which it may be considered appropriate to withdraw the benefit of the exemption established by it, pursuant to Article 29 of Council Regulation (EC) No 1/2003.

(18) In order to facilitate the conclusion of specialisation agreements, which can have a bearing on the structure of the parties, the period of validity of this Regulation should be fixed at 12 years,