Horizontal Agreements and Cartels in Eu Competition Law
Horizontal Agreements and Cartels in EU Competition Law: An Overview
The European Union (EU) competition law aims to ensure fair competition among businesses operating in the EU market. One of the key areas of focus is on horizontal agreements and cartels, which are considered anticompetitive behaviors that harm consumers and other businesses. In this article, we will explore what horizontal agreements and cartels are in the context of EU competition law and the legal framework governing them.
What are Horizontal Agreements and Cartels?
Horizontal agreements are those made between two or more companies that operate at the same level in the supply chain and compete with each other in the same market. These agreements can take various forms, such as price-fixing, market-sharing, bid-rigging, and information-exchange agreements. Cartels, on the other hand, are a type of horizontal agreement in which companies collude to coordinate their behavior and restrict competition in a particular market. Cartels can involve price-fixing, output restrictions, and allocation of customers or territories.
Why are Horizontal Agreements and Cartels Prohibited?
The EU competition law prohibits horizontal agreements and cartels because they lead to higher prices, reduced choice, and lower quality for consumers. They also harm other businesses that are excluded from the collusion, making it difficult for them to compete in the market. Such anticompetitive practices can also stifle innovation and harm economic growth, which is against the public interest.
Legal Framework for Horizontal Agreements and Cartels
The two main legal instruments governing horizontal agreements and cartels in the EU are Article 101 of the Treaty on the Functioning of the European Union (TFEU) and the Cartel Regulation (Regulation 1/2003). Article 101 prohibits any agreement or concerted practice between two or more parties that have the object or effect of preventing, restricting, or distorting competition in the EU. The Cartel Regulation empowers the European Commission to investigate and impose fines on companies that engage in cartel behavior.
The European Commission`s Guidelines on Horizontal Cooperation Agreements provide guidance on how businesses can cooperate without infringing on EU competition law. The guidelines cover various types of agreements, including research and development, production and purchasing, and standardization agreements.
Enforcement of EU Competition Law
The EU competition law is enforced by the European Commission and national competition authorities in EU member states. The European Commission has the power to investigate suspected anticompetitive behavior and impose fines on companies found guilty of infringing EU competition law. National competition authorities can also investigate and sanction companies that violate national competition laws.
In conclusion, horizontal agreements and cartels are prohibited in the EU because they harm consumers, other businesses, and the overall economy. Businesses must ensure that their agreements comply with EU competition law to avoid fines and legal liability. The EU competition law`s legal framework provides guidance on what constitutes anticompetitive behavior and the consequences of violating the law. By adhering to EU competition law, businesses can compete fairly and contribute to a dynamic and competitive EU market.
