Contents

Introduction. 1

Clarification of TTBER Market Share Thresholds for Technology Markets 2

New Guidance on Data Licensing. 2

Modification of the GuiDance on Technology Pools 3

New Guidance on licensing negotiation groups (LNGs) 4

Conclusion. 5

Endnotes 5

Introduction

On September 11, 2025, the European Commission (Commission) launched a public consultation on published drafts of the revised Technology Transfer Block Exemption Regulation (TTBER) and Technology Transfer Guidelines (Draft Revised Guidelines).[1] The TTBER, which exempts certain technology transfer agreements from antitrust scrutiny under Article 101(1), as well as the Draft Revised Guidelines, which provide important guidance on how the TTBER will be applied, are key parts of the Commission’s approach to the critical area involving the intersection of antitrust and intellectual property (IP) rights.[2]

The consultation is part of a multi-year review that included both an evaluation phase and ongoing impact assessment phase where the Commission gathered evidence and solicited stakeholder feedback on its TTBER regime.[3] As the Commission has explained, the revision “aims to adapt the rules to reflect recent market developments and case law by the Court of Justice of the European Union, as well as to provide legal certainty for companies wishing to enter into technology transfer agreements.”[4]

The Information Technology and Innovation Foundation (ITIF), the world’s top-ranked science and technology policy think tank, greatly appreciates the opportunity to respond to the Commission’s public consultation. In general, ITIF believes that the proposed revisions involving TTBER market share thresholds, data licensing, and technology pools may prove beneficial toward enhancing innovation and competition in technology licensing. However, ITIF is concerned that the Draft Revised Guidelines’ new safe harbour for licensing negotiation groups (LNGs) would, unless additional conditions are included, disrupt the delicate balance between IP holders and implementers, as well as provide an avenue for protectionist enforcement within EU competition policy.

Clarification of TTBER Market Share Thresholds for Technology Markets

Article 3 of the TTBER makes clear that the block exemption will only apply if certain market share thresholds are met.[5] However, as the Commission has explained, “many stakeholders reported practical difficulties in applying the TTBER’s market share thresholds for technology markets.”[6] In response, the Commission has proposed two main changes for the TTBER market share thresholds: first, in recital 13, confirming that technologies with no current sales have zero market shares; and second, that when market shares rise above the thresholds over the life of the agreement, the grace period for which the block exemption still applies will be extended from two to three years.[7]

These changes are likely to both improve administrability and reduce error costs associated with enforcing the TTBER. Specifically, by confirming that technologies with no current sales have zero market shares, the Commission is not just formalizing guidance from an earlier communication, but interpreting the TTBER in a way that is consistent with the dynamic and often fraught nature of the innovation process—even very valuable IP with a high share in a technology market may not, for a variety of reasons, ultimately be deployed in a downstream innovation.[8] Similarly, even when IP is implemented in a product that gains a high market share, the dynamic nature of competition in high-tech markets can make even a short-term dominant position fleeting. As such, the shift to a three-year grace period better ensures that scrutiny under Article 101(1) applies to technologies that have resulted in the creation of a significant and durable market position.

New Guidance on Data Licensing

The current TTBER and Technology Transfer Guidelines provide that an exemption from Article 101(1) applies to agreements that involve the transfer of technology rights and certain associated know-how, encompassing patents, utility models, design rights, and other forms of IP. But, as the Commission notes, “data licensing agreements are increasingly common, and some stakeholders called on the Commission to provide guidance in this area, as the current TTBER and Guidelines do not include specific guidance.”[9] In response, the Commission’s proposed revisions include clarifying that the TTBER can apply to data licensing when the data qualifies as an existing technology right defined in the TTBER—including data licensing involving databases protected by sui generis rights or copyright—that non-exempted data licensing will be evaluated on a case-by-case basis, and that Chapter 6 of the Guidelines on Horizontal Agreements will apply in cases where data licensing involves competitors exchanging commercially sensitive information.[10]

In general, these changes are a positive step because the Commission is rightfully bringing data that qualifies as one of the existing technology rights as defined in the TTBER under the same framework that already applies to patents, designs, and other IP. Indeed, this is particularly important given that emerging high-value sectors like AI and biotechnology critically depend not just on the exchange of traditional IP, but on data-driven technology transfers. And, while it is true that data licensing is generally procompetitive, to avoid false negatives and potential uncertainty the block exemption should not be expanded to include other forms of data licensing, particularly if the latter is evaluated on a case-by-case basis to determine whether it will result in anticompetitive effects, which helps to mitigate the risk of error costs in the form of false positives.

Although the proposed revisions clarify how the TTBER applies to data and database licensing, their impact may depend on how this framework interacts with other EU laws that define data protection and access rights. For instance, Recital 112 of the Data Act excludes machine-generated data from sui generis database protection, in part because the Commission argues that competition is stronger when users can freely access and share data generated by connected devices with third parties.[11] But to the extent that data-licensing agreements based on this type of dataset categorically fall outside the protections of the TTBER, the Commission may consider either revisiting the Data Act so that certain types of machine-generated datasets can qualify for sui generis protection and thus fall within the TTBER’s safe harbour, or alternatively consider introducing a limited carve-out within the TTBER itself to exempt certain types of legitimate, procompetitive licensing of machine-generated data.

Modification of the GuiDance on Technology Pools

ITIF agrees with the Commission that “the guidance on the assessment of pools under Article 101 of the Treaty has been generally effective in providing legal certainty for undertakings,” in particular with respect to the safe harbour that puts qualifying technology pools outside the scope of Article 101(1) scrutiny.[12] In addition, ITIF does not raise concerns with the new transparency, essentiality, and dipping requirements for this safe harbour as a way to address the Commission’s lingering concerns in these areas, but would note that the Commission could consider that implementers too can in some circumstances be in a position to take steps to lessen double dipping. Moreover, ITIF supports the Draft Revised Guidelines’ clarification that technologies licensed out by the pool must be licensed on fair, reasonable, and non-discriminatory (FRAND) terms to the extent that the technology pool includes standards encumbered technologies—in particular, standard essential patents (SEPs)—to alleviate the risk of hold-up.[13]

New Guidance on licensing negotiation groups (LNGs)

The most significant change contemplated by the Draft Revised Guidelines involves LNGs, defined as “arrangements whereby potential licensees (technology implementers) agree to negotiate the terms of technology transfer agreements jointly.”[14] While recognizing the concerns that LNGs can facilitate the possibility of anticompetitive collusion, and in particular hold-out, the Draft Revised Guidelines create a safe harbour for LNGs subject to a number of conditions that include open participation, transparency requirements, limited scope, restrictions on the ability to exchange information, non-exclusivity (as qualified below), and a cap that licensing fees must not exceed 10% of the sale price of the products incorporating the licensed technology.[15]

Although ITIF recognizes the administrability benefits that such a safe harbour might bring, it is concerned that increased error costs in the form of false negatives will outweigh any of those gains. To be sure, LNGs that have an efficiency justification—and, as such, are not buyer cartels—are often procompetitive and may be properly subject to some type of safe harbour that is designed to exclude LNGs that are able to anticompetitively exercise buy or sell side market power.[16] However, the Draft Revised Guidelines do not appear to include conditions that sufficiently mitigate this risk, either in the form of a commitment that the LNGs will obtain a license of FRAND terms—as in the technology pool safe harbour—or through LNG specific market share thresholds given that, unlike in the technology pool case where the TTBER is designed to protect the pooling of complements, LNGs inherently involve concerted action between competing buyers.

Moreover, while the Draft Revised Guidelines are clear that, to qualify for the safe harbour, the LNG must not have the power to “limit the freedom of LNG members to negotiate and conclude agreements bilaterally with technology holders,” an exception exists whereby “bilateral negotiations may be restricted for a short (6-month) period to incentivize joint negotiations through the LNG.”[17] Yet, it is unclear why such an exception is reasonably necessary to achieve the procompetitive benefits that are to be gained by negotiating through the LNG: not only does the 6-month window appear arbitrary, but if the LNG is truly efficiency enhancing, that should itself provide sufficient incentives for its members to eschew separate bilateral negotiations.

In addition to these economic harms, ITIF is also concerned that the LNG safe harbour may encourage TTBER enforcement that serves protectionist purposes at the expense of competition and innovation. Indeed, these concerns are exacerbated by the Commission’s recent guidance letter explaining that an automotive LNG comprised by founding members BMW, Mercedes, and Volkswagen—the three largest German car companies—and designed for the purpose of negotiating SEP licenses did not raise concerns under Article 101.[18] Importantly, the rationale given for this decision was not that the members lacked a low combined market share—they did not—but rather that the licensing rates were a very small percentage of the overall end product (cars) and information sharing was said to be appropriately limited.[19]

This reasoning confuses a necessary condition with a sufficient one when it comes to assessing the competitive harm an LNG may pose: that an LNG may not result in downstream collusion by virtue of licensing rates being a very small percentage of the overall end product does not mean that there might not be anticompetitive upstream effects vis-à-vis buyer collusion that warrant concern separate from issues related to the sharing of competitively sensitive information. Indeed, as U.S. antitrust officials have noted, not only has the Commission “spoken quite a bit about buyer side cartels and that problem” but the Commission’s letter appears to have been issued under a 2025 European automotive plan, which raises the question of whether it was motivated by “trade law or national champion” concerns rather than the antitrust goals of promoting competition and innovation.[20]

Conclusion

ITIF is encouraged by the Commission’s evaluation and assessment of its TTBER and accompanying guidelines on technology transfer agreements to ensure that its policies are fostering the competition and innovation that are the fruits of a successful antitrust regime. At bottom, ITIF broadly supports the proposed revisions concerning TTBER market share thresholds for technology markets, the new guidance on data licensing, and the modification of the guidance on technology pools. However, the new guidance on LNGs appears to create a significant risk of false negatives by exempting concerted action that can harm competition and innovation. While ITIF does not oppose a safe harbour for LNGs in principle, additional criteria should be applied to make certain that LNGs exempted from liability under Article 101(1) are sufficiently unlikely to result in collusion either upstream or downstream. Doing so would also help the Commission minimize the ability for the TTBER to be enforced in a way that may be seen by U.S. officials as part of a broader protectionist scheme in high-tech industries, which is particularly important given the Digital Markets Act’s continued and unfortunate targeting of America’s leading technology companies at a time when the U.S. and EU should be working together to counter China’s quest for global techno-economic dominance. 

Thank you for your consideration.

Endnotes