Prevention, restriction or distortion of competition Definition

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GLOSSARY

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What does Prevention, restriction or distortion of competition mean?

Agreements which prevent, restrict or distort competition, whether by object or effect are anti-competitive and prohibited under EU and UK competition law. Economic analysis provides evidence of anti-competitive effect, but this is unnecessary for certain types of agreements which are deemed to have an anti-competitive object—such as price-fixing and market sharing.

Agreements, decisions of associations of undertakings and concerted practices that have as their object or effect the prevention, restriction or distortion of competition may be prohibited under Article 101 TFEU and/or the Competition Act 1998, s 2.

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Introduction to the application of Article 101 TFEU to vertical agreements

Introduction to the application of Article 101 TFEU to vertical agreements This Practice Note refers to the Vertical Block Exemption Regulation, Commission Regulation 2022/720 (VBER 2022) and the Commission’s 2022 Guidelines on Vertical Restraints (2022 Guidelines). What is a vertical agreement? A vertical agreement is an agreement entered into by separate undertakings operating at different levels in the supply chain, for example, a manufacturer and its distributors. A supplier may wish to have one or multiple resellers for its goods or services, through one or more levels of the supply chain, such as an EU or country-specific importer and further resellers operating at the wholesale and retail levels. These activities will all constitute vertical agreements. Vertical agreements are generally agreements between non-competitors. This is in contrast to horizontal agreements, which are agreements between competitors. Vertical agreements can take many different forms. The key types include: (i) agency; (ii) exclusive distribution; (iii) selective distribution; (iv) ‘free’ or non-exclusive distribution; (v) franchising; and (vi) subcontracting. Each of these are discussed in more...

Cartels under Article 101 TFEU

Cartels under Article 101 TFEU Cartels are considered to be the most pernicious anti-competitive practices under Article 101 TFEU. As such, they are subject to a specific legal regime which includes (amongst other things) particular procedural tools (eg leniency programme and settlements). What is a cartel? Cartels are a major concern for competition authorities. However, Article 101 TFEU does not provide a definition of cartels, nor does it make explicit mention of them. Over time, the case law of the EU courts and the decisional practices of the Commission have attempted to provide greater clarity on the notion of what a cartel is and to identify the constitutive elements of a cartel violation. Form of a cartel—agreement and concerted practices Article 101 TFEU draws a distinction between: • agreements between undertakings, and • concerted practices. Agreement The notion of an agreement implies that the parties adhere to a common plan that limits or is likely to limit their individual commercial conduct by determining how they will act or...

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