What Is an Agreement for the Purposes of Competition Law

This section selects books on topics related to competition law and economics. This compilation does not seek to be exhaustive, but rather is an overview of the topics that are important in this area. The survey usually includes publication within the last three months of the publication of the last issue of (…) India has responded positively by opening up its economy by lifting controls during economic liberalization. In an effort to increase the efficiency of the country`s economy, the Indian government has recognized the era of liberalization and privatization of globalization. [39] This led to the need for strong legislation on trade case law, and the Competition Act of 2002 was passed. The history of competition law in India dates back to the 1960s, when the first competition law, the Monopolies and Restrictive Business Practices Act (MRTP), was enacted in 1969. But after the economic reforms of 1991, this law was deemed obsolete in many respects and, as a result, a new competition law was enacted in 2003 in the form of the 2002 competition law. The Competition Commission of India is the quasi-judicial authority established to enforce the provisions of the Competition Act. [40] From a competition law perspective, a merger or acquisition involves the concentration of economic power in less hands than before. [90] This generally means that one company buys the shares of another. The reasons for State control of economic concentrations are the same as the reasons for restricting undertakings abusing a dominant position, except that the regulation of mergers and acquisitions aims to solve the problem before it arises, by preventing ex ante the dominant position. [91] In the United States, the Merger Regulation began with the Clayton Act and, in the European Union, with The Merger Regulation No. 139/2004 (known as the “ECMR”).

[92] Competition law requires companies that intend to merge to obtain approval from the relevant government authority. The theory behind mergers is that transaction costs can be reduced through bilateral agreements compared to operating in an open market. [93] Mergers can result in economies of scale and scope. However, companies often take advantage of their growing market power, increased market share and reduced number of competitors, which can have a detrimental effect on consumer activities. Merger control is about predicting what the market might look like, not knowing and making a judgment. Consequently, the central provision of EU law asks whether a concentration, if concluded, `would significantly impede effective competition`. in particular following the creation or strengthening of a dominant position…”[94] and the corresponding antitrust provision between US states in a similar way, the CMA and industry regulators have significant powers to investigate alleged anti-competitive conduct. These powers can be used to enter and search commercial and private premises with an arrest warrant in so-called “dawn raids”. They also have the power to impose fines on undertakings found to have infringed competition law.

Criminal sanctions for the most serious violations of competition law are prosecuted by the CMA in collaboration with the UK Serious Fraud Office. Among the forms of abuse directly related to pricing is the exploitation of prices. It is difficult to prove when the prices of a dominant company become “exploiters”, and this category of abuse is rarely found. In one case, however, it was found that a French funeral home had charged operating prices, which was justified by the fact that the prices of funeral services outside the region could be compared. [83] A more sensitive issue is predatory pricing. It is the practice of lowering the prices of a product to such an extent that smaller competitors cannot cover their costs and go bankrupt. The Chicago School considers predatory pricing unlikely. [84] In France Télécom SA v Commission[85], a broadband internet company was forced to pay $13.9 million for lowering its prices below its own production costs. It has “no interest in applying such prices, except to eliminate its competitors”[86] and has been cross-subsidised to carve out the lion`s share of a booming market.

A final category of price abuse is price discrimination. [87] An example of this could be a company that offers discounts to industrial customers who export their sugar, but not to customers who sell their products in the same market. [88] Not all agreements between companies are necessarily anti-competitive or prohibited by competition law. In several countries, competition law provides for exceptions to certain cooperation agreements between companies, which can facilitate efficiency and dynamic market change. For example, agreements between companies may be allowed to develop uniform product standards to promote economies of scale, increased use of the product and the diffusion of technology. Similarly, companies may be allowed to participate in collaborative research and development (R&D), exchange statistics or form joint ventures to share risk and pool capital in large industrial projects. However, such exemptions are generally granted provided that the agreement or arrangement does not form the basis for price-fixing or other restrictive practices. EU competition law will no longer apply in the UK after 31 December 2020 and the UK Competition Authority and courts will no longer apply it. However, EU competition law in force before that date, including the historical case law of European courts, will continue to be considered a “retained EU law” in the UK.

This means that UK competition law will continue to be interpreted in accordance with EU law and pre-Brexit case law. In the future, however, some UK courts may, in certain circumstances, deviate from retained EU law. According to laissez-faire doctrine, antitrust law is considered useless because competition is seen as a dynamic, long-term process in which companies compete to dominate the market. In some markets, a company can successfully dominate, but that`s because of superior skills or innovation. However, according to laissez-faire theorists, when it tries to raise prices to exploit its monopoly position, it creates profitable opportunities for others to compete. A process of creative destruction begins, which undermines the monopoly. Therefore, the government should not try to break the monopoly, but let the market work. [57] The unexpected shock caused by the Covid-19 crisis and the measures taken to limit the spread of the pandemic have affected the functioning of many markets.