Cartels And Collusion Flashcards
(24 cards)
What is a cartel?
A cartel is a secret agreement or practice between competitors to restrict competition, typically by fixing prices, sharing markets, limiting production, or rigging bids.
What is collusion?
Collusion involves any coordinated behavior between undertakings that restricts competition, whether explicit (formal agreement) or tacit (informal understanding).
Which legal provisions address cartels in EU competition law?
Article 101(1) TFEU prohibits agreements, decisions, and concerted practices that restrict competition.
What are the three key elements of Article 101(1) TFEU?
- An agreement, decision, or concerted practice.
- Between undertakings.
- With the object or effect of restricting competition.
Which provisions govern cartels in UK competition law?
Section 2 of the Competition Act 1998 (the Chapter I prohibition) mirrors Article 101 TFEU and prohibits anti-competitive agreements.
What additional tool does the UK have for cartel enforcement?
The Enterprise Act 2002 makes cartel activity a criminal offense for individuals involved in price-fixing, market-sharing, or bid-rigging.
What is price-fixing?
Agreeing on prices or pricing strategies.
What is market-sharing?
Dividing customers, territories, or sectors.
What is output limitation?
Restricting production or supply.
What is bid-rigging?
Manipulating tender processes to favor specific parties.
What is the difference between an agreement and a concerted practice?
Agreement: Formal or informal arrangement between parties.
Concerted Practice: Coordinated behavior without a formal agreement, evidenced by indirect communication or conduct.
Is proof of intent required for a concerted practice?
No, intention is not required; conduct and effects are sufficient.
What is an ‘object’ restriction?
Practices that are inherently anti-competitive (e.g., price-fixing). No need to prove actual harm.
What is an ‘effect’ restriction?
Practices that harm competition in practice. Requires economic analysis to demonstrate anti-competitive effects.
What is the main difference between ‘object’ and ‘effect’ restrictions?
‘Object’ restrictions do not require proof of actual harm, while ‘effect’ restrictions require economic analysis to show harm.
ARE CARTELS EXEMPT UNDER EU OR UK LAW
YES.
101 3 TFEU OR SEC9 OF COM ACT1998, AGGREEMENT EXEMPT IF
- IMPROVES PRODUCTION OR DISTRIBUTION OR PROMOTES TECHNICAL OR ECONOMIC PROGRESS
- CONSUMER REVIEVES A FAIR SHARE OF BENIFITS
- IT IS INDESPENSABLE TO ACHIEVING RHESE BENEFITS
- DOES NOT ELIMINATE COMPETITION
HOW ARE CARTELS DETECTED
- LENIENCY PROGRAMS: firms report their invlovement in exchange for reduced fines
- Whistleblowers- reports from individulas wiht insider knowledge
- Market mointoring - sus pricing patterns or makret behaviour
PENLITIES FOR CARTELS IN EU/UK
10% GLOBAL TURNVOER FOR UNDERTAKING INVOLVED EU.
UP TO10% UK TURNOVER.
CRIMINAL SANCTIONS-5 YEAR IMPRISONMENT AND OR UNLIMITE FINES FOR INDIVIDULAS UNDE ENTERPRISE ACT2002.
PRUPOSE OF LENIENCY PROGRAMS IN CARTEL ENORRCMENT?
INCENTIVIZE CARTLES TO COME FORWARD AND DISCODE THEIR INVOLVEMENT IN ECHAMGE FOR IMMUNIT OR REDUCED FINES
CONDTIONS OF LENIANCY I EU
EUROPEAN COMMISIONS:
REQUIRES FRIM TO:
PROVIDE SUFFICENT EVDIENCE TO EXPPOSE CARTEL
COOPERATE FULLY N CONTINUOUSLY
CEASE CARTEL ACTIVIRTY IMMEDIATELY
CONDITIONS FOR LEINCY IN THE UK
CM OFFERS FIR
FULL COOP N DISCLOSURE
NO COERCION FROM OTHE CARTEKL MEMEBRRS.
HOW IS ECON ANALSYSIS USE IN DETCIN CLLUSION
- PARALLEL PRICING OR SUS MRKET CONDUCT
- ORICES CORRELATIONS INCOCNSISITENT WITH CONPETITIV MARKETS
- STRUCTURAL FACTORS CONUDCIVE TI COLLUSION EG. HIGH MARKET CONENTRATION
CASE LA W EU
TRUCK CARTEL- EUROPEAN COMMISIONS FINED TRUCK MANUFACTURER S2.93 BN EUROS FOR ORICE FIXING AND COORDINATIN TIMELINES FOR EMISSION TECH NOLOGIE S
UK CARTEL CAS
GALVANSIED STEEL TANKS
- CMA FINED SUPPLIERS FOR MARKET SHARING AND BID RIGIGN IN THE WATER TANK INDUSTRY
