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Anti-Competitive Agreements

By januar 26, 2022No Comments

Competition law is a law that encourages or seeks to maintain competition in the market by regulating the anti-competitive behaviour of companies. [1] [2] Competition law is implemented through public and private enforcement. [3] Competition law is historically known as antitrust law in the United States and antimonopoly law in China[1] and Russia. In recent years, it has been known as Commercial Practice Law in the UK and Australia. In the European Union, it is called both antitrust law[4] and competition law. [5] [6] The Chicago School of Economics argues that vertical mergers, usually formed for anti-competitive purposes, can be pro-competitive to eliminate double marginalization. [12] A chain of monopolists can result in prices that go beyond the consumer`s surplus when wholesalers add prices, retailers have the power to transfer that cost price to the retail price. Given the serious consequences of non-compliance, undertakings should regularly review the compatibility of their practices and agreements with competition law. For any undertaking, and in particular for any undertaking holding a significant share of the markets in which it operates, it is essential to promote workers` understanding of the type of behaviour permitted by competition law and what is not. The CMA and industry regulators have broad powers to investigate suspected anti-competitive behaviour.

These powers can be used to enter and search commercial and private premises with an arrest warrant in so-called “dawn raids”. They also have the power to impose fines on undertakings found to have infringed competition law. Criminal sanctions for the most serious violations of competition law are prosecuted by the CMA in collaboration with the UK Serious Fraud Office. Some horizontal agreements between companies may lag behind a hardcore agreement and have positive effects in some cases. For example, agreements between competitors in the areas of research and development, production and marketing can lead to cost reductions for businesses or improved products whose benefits are passed on to consumers. The challenge for competition authorities is how to assess these agreements, balancing pro-competitive and anti-competitive effects that could distort the market. The ACCC Guidelines on Collaborative Practices outline the general approach that the ACCC will take in the investigation of alleged anti-competitive concerted practices. Companies involved in anti-competitive behaviour may find that their agreements are unenforceable and risk being fined up to 10% of the group`s global turnover and exposed to possible claims for damages. Anti-competitive practices are generally considered illegal only if they result in a significant restriction of competition, which is why, in order to be penalised for any form of anti-competitive behaviour, an undertaking must generally be a monopoly or dominant undertaking in a duopoly or oligopoly which has significant influence on the market. Cartels are the most serious form of anti-competitive agreements, and their continuation is a priority in law enforcement in many jurisdictions. A cartel occurs when companies agree to act jointly, control prices and prevent new competitors from entering a particular market.

The objective is to increase the profits of the cartel members while maintaining the illusion of competition. The English common law of restriction of trade is the direct precursor of modern competition law, which was later developed in the United States. [23] It is based on the prohibition of agreements contrary to public policy, unless the relevance of an agreement has been demonstrated. It has effectively banned agreements to restrict someone else`s trade. The Dyer`s of 1414 is the first known restrictive trade agreement to be examined under English common law. A dyer had given a deposit for not practising his trade in the same city as the plaintiff for six months, but the plaintiff had promised nothing in return. When Judge Hull heard the plaintiff`s attempt to enforce this restriction, he exclaimed, “According to God, if the plaintiff were here, he would have to go to jail until he had paid a fine to the king. The court refused to collect bail for the dyer`s breach of contract because the agreement was considered a trade restriction. [24] The English courts subsequently ruled on a number of cases that gradually evolved into competition-related case law that was eventually transformed into legal law. [25] Section 45 of the Competition and Consumer Act prohibits contracts, agreements, arrangements or concerted practices that have as their object, effect or effect that is likely to significantly restrict competition in a market, even if such conduct does not meet the stricter definitions of other anti-competitive practices such as cartels.

A number of factors are taken into account by the courts when making a decision: EU rules will be implemented in the UK from 1. Will no longer come into force in January 2021, but UK companies with cross-border activities within the EU will be subject to EU competition law and national competition law in EU Member States in relation to these activities. The Chicago School of Economics argues that vertical mergers, usually formed with an anti-competitive intent, could be competitive to double the competition. .