Forbidden Horizontal Agreement

Article 101 of the Treaty on the Functioning of the European Union (TFUE) prohibits agreements between companies that are likely to prevent, restrict or distort competition in the EU and affect trade between Member States (anti-competitive agreements). These include, for example, price-fixing or market allocation cartels. Anti-competitive agreements are prohibited, whether between companies operating at the same level of the supply chain (horizontal agreements) or at different levels (vertical agreements). It is therefore not necessary to enter into a collusive agreement in writing in order to be able to violate the provisions of section 41 of the Act. A horizontal agreement is collusive and prohibited if it results in price fixing, market allocation or production limitation. For example, market allocation agreements are the allocation of clients by geographic or geographic area, the nature or size of the client, and the distribution of contracts by value within the same area. Other examples of market distribution are agreements between competing companies aimed at not competing with historical customers who are with each other, not manufacturing products or services of each other, or not developing in a competitor`s market. The prohibition of a horizontal agreement between competitors (real and potential) is found in Section 41 of the Competition Act 2007. This is one of three forms of collusive agreement; the others are bid manipulations and vertical agreements that involve maintaining the resale price. The threshold for the cumulative market share that contracting entities can achieve in order to qualify for a category exemption is 20% (for specialization agreements) or 25% (R and S; D). If these values are exceeded, research and development and specialisation agreements are not automatically prohibited, but must be assessed individually in light of the exemption under Article 101, paragraph 3, of the EUFS. A company that took part in an anti-competitive agreement and therefore violated competition law could face a fine. The Commission`s criminal policy is aimed at punishing and deterring them.

The fines reflect the seriousness and duration of the offence. They are calculated as part of a series of guidelines that were last revised in 2006. Prohibited horizontal cooperation can manifest itself as an explicit agreement between companies or a corresponding mutual agreement. Decisions or agreements in which corporate behaviour is effectively limited or controlled at the horizontal level are also prohibited. These forbidden agreements may, for example. B, born at the initiative or within commercial organizations. Therefore, the price or royalty recommendations of commercial organizations can also be considered as agreements. The horizontal restriction of competition refers to an agreement or procedure to restrict competition between companies operating at the same level of production or distribution, i.e.: