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Journal > What Are The Two Types Of Anti-Competitive Agreements

What Are The Two Types Of Anti-Competitive Agreements

April 15th, 2021

HORIZONTAUX ACCORDS – Horizontal agreements are agreements between companies of the same level of production. Article 3, paragraph 3, of the Act provides that such agreements include agreements that carry out identical or similar exchanges of goods or services, section 19, paragraph 1, of the Act which provides that the ICC may require any alleged violation of Section 3, paragraph 1, of the Act itself or after receiving information from persons, consumers or their association or trade association, after payment of royalties and in the manner prescribed. The ICC may also act when the central government or a state government or legal authority refers to it. The ICC only continues the investigation in cases of prima facie and then orders the Director General to open an investigation into the matter. In cases where, as a result of an investigation, the ICC finds that the agreement is anti-competitive and has an AAEC, it can take any of the following measures, with the exception of the interim measures it may take under section 33 of the Act: cartel behaviour between competitors is the most serious form of anti-competitive behaviour within the meaning of Chapter I or Article 101 and has the highest level of sanction. A “hardcore” cartel is a cartel that includes price fixing, market sharing, supply manipulation or limiting the supply or production of goods or services. Persons prosecuted for cartels in the United Kingdom may be subject to imprisonment of up to five years and/or an unlimited fine. In the above context, the ICC finds that any “reasonable condition” that would end artitheich for the protection of intellectual property would not attract Section 3, but the imposition of an “unreasonable condition” to protect the type of intellectual property would be contrary to Section 3 of the Act. The ICC contains a clear list of practices/agreements concluded for the protection of intellectual property, but which may be contrary to Section 3 of the Act5. These practices/agreements are as follows: given the serious consequences of non-compliance, companies should regularly verify that the company`s practices and agreements are in compliance with competition law. For any company, and in particular any company that has a significant share of the markets in which it operates, it is essential to understand by workers what type of behaviour is allowed or not in terms of competition.

Anti-competitive agreements are also classified as horizontal and vertical agreements. The “in itself” rule for horizontal agreements does not apply to vertical agreements. Therefore, a vertical agreement is not in itself anti-competitive or does not have a material negative effect on competition. Whether an agreement is anti-competitive is assessed on the basis of its objective or impact on competition, not on the basis of its wording or form. This means that oral and informal “gentlemen`s agreements” can be perceived as anti-competitive, as can formal and written agreements. Given this power of the ICC, it becomes essential that parties present in India be aware of the agreements that may fall within the framework of the designation “anti-competitive”. In this newsletter, we will discuss the situations and conditions under which an agreement may become anti-competitive. The following types of agreements are generally prohibited under Chapter 1 and Article 81: anti-competitive behaviour that could affect trade within the United Kingdom is prohibited by Chapters I and II of the Competition Act 1998. Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFUE) also prohibit anti-competitive practices that could affect trade between EU Member States.

EU rules will no longer come into force in the UK from 1 January 2021, but UK companies with cross-border activities within the EU remain subject to EU competition law with respect to these activities and national competition law in EU Member States. The Chicago School of Economics argues that vertical mergers, which are generally formed with an anti-competitive will, could be competitive in order to double competition.

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