15 Okt What Is Anti Competitive Agreements
Whether an agreement is anti-competitive is assessed on the basis of its objective or effects on competition and not on its wording or form. This means that oral and informal gentlemen`s agreements can be considered anti-competitive, as can formal and written agreements. A key distinguishing factor distinguishing anti-competitive behaviour from innovative marketing and fair competition is that most of the above-mentioned types of anti-competitive behaviour are considered illegal only if the undertaking committing the conduct is a dominant undertaking to the extent that its actions have a significant impact on market behaviour. If the company engages in such behavior against companies, it has a significant market share position, so much so that it is able to make higher than normal profits and push small businesses out of the industry, then it will most likely be considered illegal. In the manipulation of bids, groups of companies conspire to increase prices or reduce the quality of goods or services offered in public tenders conspire. Although this anti-competitive practice is illegal, it continues to cost governments and taxpayers billions of dollars each year in OECD countries. “Essential” is an important term in competition and consumer law and appears in a number of provisions. To reach an agreement or to conclude an agreement, it is not necessary for anything to be written. In fact, such agreements are often not written. Nothing even needs to be expressed – a “nod and wink” is enough. Many governments view these market niches as natural monopolies and believe that the inability to allow for full competition is offset by government regulation.
However, companies in these niches tend to believe that they should avoid regulation because they are entitled to their monopoly position by fiat. In some cases, anti-competitive behaviour can be difficult to distinguish from competition. For example, a distinction must be made between product bundling, which is a legal market strategy, and product coupling, which violates antitrust law. Some proponents of laissez-faire capitalism (such as monetarists, some neoclassical economists, and heterodox economists of the Austrian school) reject the term and see all “anti-competitive behavior” as forms of competition that benefit consumers. Some horizontal agreements between companies may lag behind an inexhaustible 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 reduced costs for businesses or improved products, the benefits of which are passed on to consumers. The challenge for competition authorities is to assess these agreements and weigh the pro-competitive effects against the anti-competitive effects that could distort the market. The best results are achieved by preventing companies from forming cartels. .