Legal briefing | |

Sustainability collaborations and information exchange in financial services


Industry collaborations have been high on the competition law agenda in recent years, with businesses seeking to navigate an ever-growing number of 'horizontal' competitor collaborations, industry initiatives, and bilateral as well as multilateral information exchanges.

Many forms of collaboration covered by the European Commission's Horizontal Guidelines have been placed under strain in recent years, due in part to fast-moving developments in the Tech and ESG spheres.

Within the financial services sphere, the interaction between industry cooperation and competition law has been thrown into sharp and public relief in recent months by the recent decision – explicitly on competition law grounds – of the Glasgow Financial Alliance for Net Zero (GFANZ), which includes over 500 firms, to drop adherence to the UN's "Race to Zero" initiative, as a requirement of its membership.[1] 

Change is, however, being seen at both the EU and UK levels. The European Commission is currently revising its Block Exemption Regulations ('BERs') and has published new proposed Horizontal Guidelines ('Guidelines'), taking into account recent case law and developments relating to ESG and the growth of the digital economy.[2] The new rules will come into effect upon the expiry of the existing framework (likely now 1 July 2023), and will last for a period of 12 years.[3]

The revision of the Guidelines falls at a time where the Commission also plans to mandate cooperation between firms to ensure that adverse sustainability impacts are prevented or mitigated. Its proposed Directive on Corporate Sustainability Due Diligence,[4] requires qualifying entities (including many financial services firms) to identify human rights and environmental impacts in their supply chain and act against them, requiring member state implementing legislation to "ensure that, for the purposes of due diligence, companies are entitled to share resources and information within their respective groups of companies and with other legal entities in compliance with applicable competition law".  Furthermore, there is a positive obligation on entities to "collaborate with other entities… to increase the company's ability to bring the adverse impact to an end…" though this must be done in compliance with competition law.

At the UK level, the CMA will need to produce its own horizontal guidelines and 'Block Exemption Orders' (initially intended for 'later in 2022', however an extension of the BERs would give the UK Government more time). Given the extent to which the UK is still very tied into the wider European economy, any differences between the two documents will need to be carefully scrutinised.[5]  In advice to Government earlier this year,[6] the CMA has also suggested that it: set-up a bespoke 'Sustainability Taskforce'; and publish more guidance on how it will treat ESG cooperation from a competition law perspective, in respect of which it may be able to depart from EU precedent.

In this briefing we focus on two themes within the EU Guidelines, each of which is new in some way, and each of which will have an important bearing on collaborations within the financial services industry, particularly in relation to: sustainability and ESG cooperation; and the information which needs to be exchanged between parties to make horizontal co-operation effective. 

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Sustainability and ESG cooperation

The Commission proposes the inclusion of a new chapter in its Guidelines, dedicated to sustainability cooperations.

Much discussion around ESG and sustainability initiatives in recent years has focused on the central competition law dilemma of how parties can reconcile:

  • The axiomatic principle in competition law that, as a general rule, companies must act unilaterally and must compete strongly with one another; with

  • The desirability, and likely need, within the ESG space for competitors to collaborate, or discuss potential collaborations, for example in attempting to phase out unsustainable products or set new common standards for green products to meet in future

The 'sustainability' chapter is an attempt to resolve this tension, and to answer the question of when competitors can come together and cooperate in order to address market failures (such as pollution, overuse of natural resources, excessive waste, etc.) in circumstances where regulation might have not filled the gap.[7]

However, agreements that pursue sustainability objectives are not considered to be a distinct type of cooperation agreement: they fall to be assessed against established principles governing particular types of agreement (for example as a joint production arrangement, specialisation or R&D agreement etc.). The 'sustainability' chapter simply provides additional detail.

In broad terms, the chapter divides itself between three types of agreements: (1) those that do not raise competition law concerns at all; (2) those that benefit from a newly-created 'soft safe harbour'; and (3) those that may benefit from individual exemption. As explained below, in many cases businesses will need to consider the application of the third, individual exemption criteria to their sustainability agreements, given the limited practical application of categories (1) and (2).

Agreements that do not raise competition law concerns

The Commission's Guidelines reiterate the well-trodden principle that agreements are not capable of raising competition law concerns where they do not affect the parameters of competition, such as price, quantity, quality, choice or innovation. The Commission follows by citing limited examples of agreements that would fall outside of the competition rules, i.e.: (a) databases of sustainable suppliers – without requiring parties to purchase from/sell to those suppliers; (b) awareness raising campaigns – without straying into joint advertising of particular products; and (c) agreements that concern internal corporate conduct – and do not concern the economic activity of competitors.[8]  

Many in the financial services industry will already be engaged in this kind of conduct, and in practice they will already be aware that relatively little competition law consideration is required for such initiatives.  In that sense, the Guidelines add little to the practical experience of firms.

Perhaps more helpfully, however, the Commission also draws a distinction between and government-compelled cooperations, and government-encouraged cooperations.

The Commission states that parties to a sustainability agreement will not be held liable for competition law infringements if they have been compelled by government bodies to conclude the agreement.  This is a welcome clarification particularly in the context of, for example, the relatively recent increase in follow-on private enforcement of competition law.

However, government involvement in and of itself clearly does not remove the application of competition law – for example, the Commission notes that if government bodies merely encourage, or make it easier for companies to engage in anti-competitive conduct, they will remain subject to competition law.

Creation of a 'soft safe harbour' for standardisation agreements

Next, the Commission proposes a 'soft safe harbour' (i.e. comfort that an agreement will fall outside of the competition law prohibitions) where a sustainability standard agreement does not restrict competition by object and seven, fairly strict, cumulative conditions are met. [9]

One such condition is that the standard "should not lead to a significant increase in price or to a significant reduction in the choice of products available on the market".  

As a result, the 'soft safe harbour' will likely be rendered difficult to apply in many cases, for example where a greater variety of less sustainable products is replaced by a cluster of products conforming to the standard. In marginal cases, much may turn on the Commission's view of what amounts to a "significant" reduction.

Individual exemption

Given the limited application of the 'safe harbours' above, much air-time is given in the Guidelines to the exemption criteria and how they may be satisfied.

An agreement will be exempt from the prohibition on anti-competitive agreements where that agreement: (a) “contributes to improving the production or distribution of goods or to promoting technical or economic progress”; (b) "consumers" receive a “fair share of the resulting benefit"; (c) the agreement is no more restrictive than necessary; and (d) there is no elimination of competition.

Perhaps the most controversial limb in the sustainability/ESG arena is the requirement for "consumers" to receive a "fair share" of the benefits brought about by the agreement. 

If one thinks about the relevant "consumers" being those who purchase the products in question, and the "benefits" as being wider environmental gains which accrue to society (perhaps over a number of generations), then it is not obvious that the individual exemption criteria – which historically have been very focused on the people who buy the products in question at this point in time – could be applied to collective agreements in the ESG space.  In short, as the Commission's Chief Economist has previously put the point: “Can we allow sustainability deals if that means taxing the people who buy, to benefit those who do not buy?”.[10] 

As explained in our previous briefing the Commission clarifies that there must be a nexus between any sustainability benefits and the consumers of the products covered by the agreement. This does not mean that the assessment of benefits to wider society plays no role in the analysis. However, a business claiming exemption does need to prove that the overall effect on consumers in the relevant market is at least neutral.

The Commission refers to three categories of benefits that may be relevant in a given case:

  • Individual-use-value benefits: i.e. "I, as a consumer, derive benefits from using the products covered by the agreement" (this may be, for example, in the form of improved quality/variety or lower prices/costs).

  • Individual-non-use-value benefits i.e. "I value the impact of my sustainable consumption on others" (this may be, for example, in the form of willingness to pay more for a particular banking product because the provider pursues sustainable investments).

  • Collective benefits i.e. benefits that occur irrespective of the consumers' individual appreciation of the product (this may be, for example, a situation where consumers are unwilling to pay a higher price for a lesser polluting product so, to ensure that the benefits of reduced pollution from that product actually materialise, an agreement to phase out old polluting technology may be needed). These collective benefits can accrue to the consumers of the product in question (i.e. in the relevant market) if they are part of the larger group in society that benefits as a whole.

However, there are limitations as to how far the third limb (namely, collective benefits) can be relied upon. The Guidance specifies that the group of consumers affected by the competition restriction under the agreement, and benefitting from the efficiency, must be substantially the same. This means that it is not enough for a business to claim large benefits to society as a whole: it also has to provide evidence that those consumers under that actual agreement are left in at least a neutral position.[11]

It is also open to question (and future experience) as to how useful this third limb will be in the financial services context.  The Commission provides the example of a driver, who is also a citizen, and who would benefit from cleaner air if less polluting fuel was used. In that example, there is likely a substantial overlap between consumers (drivers) and beneficiaries (citizens), and so the sustainability benefits of cleaner air can in principle be taken into account in the analysis. 

If this is the Commission's logic, it may not be straightforward to find cases in financial services where the consumers of the products (even some retail products) overlap sufficiently with wider population to justify taking into account any benefits flowing from (for example) joint commitments to achieve minimum levels of investment in sustainable initiatives, or (as with GFANZ's now dropped joint commitment to the UN's "Race to Zero") an agreement to phase out involvement in the fossil fuels industry.

In large part, the analysis will depend on what the Commission means by "substantially the same". In cross-border markets, there will also be questions over how benefits should be treated where they are distributed unevenly across different Member States or even wider geographies.

Information exchange

The extent to which banks and other financial institutions can exchange information with their competitors has been a recurring question in the financial services sector over the past decade.  This is going to be particularly relevant in the coming years with the encouragement of industry-wide sustainability initiatives. 

European case law, especially in financial services cartel cases, has sometimes set out what some might describe as a challenging standard for interpreting what counts as permissible information exchange, whilst cases in the mergers space have raised questions around what information might be permissible to exchange in an M&A due diligence context. 

There is a recognition in the Guidelines that information exchange now occurs through technological means (e.g. platforms, online tools, etc.).  There are multiple references to data sharing products leading to efficiencies, especially through benchmarking and market intelligence.[12]

At times, the Commission suggests that raw data feeds may potentially be less sensitive than processed data,[13] but also that it would be important in data sharing initiatives to ensure open access to those initiatives (where they cover a large part of the market) and a sufficient level of aggregation.  However, the Guidelines also make some less helpful clarifications on industry collaborations more generally.

Industry Collaborations

Up until now, the Guidelines provided that "exchanging information on individualised intentions concerning future conduct regarding prices or quantities is particularly likely to lead to a collusive outcome". This is now replaced with a new paragraph noting that information can still be sensitive even if it "does not have a direct effect on prices paid by end users".[14] A broad list of potentially sensitive information (drawn from a number of cartel cases) is included.[15]

As a result the Guidelines have, in some parts, apparently become much starker on the types of information that could be regarded as competitively sensitive. Whereas pricing information was previously set forth as the most likely exchange to amount to an infringement of competition 'by object', the Commission now takes a broader approach (in line with recent case law) in taking the view that almost any type of information could potentially fall into the 'by object' category, subject to whether it is sufficiently aggregated, anonymised and/or historical. Factors such as the purpose of the information exchange, and market context in which the information is exchanged (for example whether the market is fragmented, or consists of asymmetric players) would appear, on the face of the Guidelines, to play less of a role in the analysis, at least in some cases.

Industry players will therefore need to ensure that any exchange of confidential (and commercially sensitive) information, even outside of their market facing activities, is competition law compliant.  This would even be true for the exchange of information in relation to government-sponsored or government-encouraged sustainability initiatives, or industry-wide quasi-regulatory initiatives designed to promote ESG goals.

Clean teams

The Commission has, however, now included guidance on how clean teams can be used to limit or control how shared data is used: undertakings can "use clean teams to receive and process information".[16]  Whereas the operation of clean teams or information barriers is already common in certain scenarios (for example between wholesale and retail divisions within a financial institution, or in the context of M&A due diligence), the Commission's expectation may well be for their wider use in information exchange scenarios going forward.

A clean team will need to be structured so as to be compliant. A couple of practical issues arise here.

First, whilst the Guidelines set out clear, key principles, interpreting these in a specific context will no doubt create particular issues in some cases.  By way of example, the Guidelines provide that a clean team should be comprised of individuals not involved in any day-to-day commercial operations. However, there may be scenarios in which a limited set of commercially facing personnel may need access to certain confidential information in order for the purpose of the information exchange to be fulfilled (for example, to assess in detail the potential success of a sustainability scheme in terms of the benefits that would accrue to customers as well as wider groups of citizens).  If that is the case, the operation of a clean team alone will not remove competition law sensitivity from the information exchange and other measures might be required.

Second, in relation to M&A, it will be important to ensure that any due diligence exercise does not risk gun-jumping provisions from being triggered. In this respect, the Guidelines note that information exchange may, potentially, be viewed as (or contributing to) a gun-jumping scenario under the EU Merger Regulation.[17]

Key take-aways

Most, if not all, industries have needed to collectively consider the impact of their practices on sustainability, and on wider ESG goals, in recent years. Financial services has been no exception.[18]

The phasing out of unsustainable products, or the setting of appropriate standards for new sustainable products, will inevitably require a degree of industry cooperation (some of which is government mandated or, more commonly, government-encouraged).    

In addition, accompanying all collaborations is likely to be a degree of information sharing. The extent to which banks and other financial institutions can exchange information with their peers, and how they can share it, has been a perennial question for advisers in this sector over the past decade. 

Businesses and their advisers are well versed in structuring compliant horizontal cooperations and, in many scenarios, the advice will not change. However, as always, the devil is in the detail, and the Guidelines introduce significant changes which will need to be factored into any analysis. These range from clarifications over how to weigh the benefits and restrictions of an ESG agreement under individual exemption; to what types of information should be considered to be competitively sensitive; and how clean team arrangements can, and should, be used in horizontal collaborations necessitating information exchange.


[1] Carney defends dropping U.N. climate initiative over antitrust concerns | Reuters

[2] 2022 hbers (

[3] Whilst the BERs were always due to expire in December 2022, the Commission is consulting on a proposed extension of the validity of the BERs until 30 June 2023.

[4] 1_1_183885_prop_dir_susta_en.pdf (

[5] The proposals for the Block Exemptions being already published: Retained Horizontal Block Exemption Regulations (R&D and specialisation agreements) Consultation - GOV.UK (

[6] Environmental sustainability and the UK competition and consumer regimes: CMA advice to the Government - GOV.UK (

[7] Guidelines, paragraph 546.

[8] Guidelines, paragraphs 551-554.

[9] See in particular Guidelines, paragraph 572.


[11] This is an area of ongoing debate across Europe, with the Dutch Competition Authority claiming full compensation is not required -

[12] Guidelines, paragraphs 412, 429 and 457-458.

[13] Guidelines, paragraph 428, Example 4.

[14] Guidelines, paragraph 423.

[15] Guidelines, paragraph 424. For example, the exchange with competitors of: (i) an undertaking’s pricing and pricing intentions; (ii) an undertaking’s current and future production capacities; (iii) an undertaking’s intended commercial strategy; (iv) an undertaking’s arrangements relating to current and future demand; (v) an undertaking’s future sales; (vi) an undertaking’s current state and its business strategy; (vii) future product characteristics which are relevant for consumers; and (viii) information concerning positions on the market and strategies at auctions for financial products.

[16] Guidelines, paragraph 440 onwards.

[17] Article 4(1) and Article 7(1) of Regulation No 139/2004. See also judgment of 22 September 2021, Altice Europe v Commission, T-425/18, not yet published, EU:T:2021:607, paragraph 239

[18] See for example: Update to Green Finance Strategy: call for evidence (accessible webpage) - GOV.UK (


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