Anti-competitive agreements are agreements among competitors that restrict competition in the marketplace. Such agreements violate the competition laws of most countries, including the United States. The competition laws of different countries prohibit different types of anti-competitive agreements, but they generally prohibit agreements that limit market entry, restrict output, or fix prices.
Competition law is a complex area of law that is constantly evolving. The legal and economic analysis of anti-competitive agreements has changed over the years, and different courts in different countries apply different tests to determine whether an agreement is anti-competitive.
In the United States, the most widely used test is the rule of reason. The rule of reason requires an analysis of the economic effects of the agreement on competition, and on consumers. Under this test, agreements that have pro-competitive effects may be legal, while agreements that have anti-competitive effects may be illegal.
There are many different types of anti-competitive agreements that may violate competition law. Some of the most common types of anti-competitive agreements include price-fixing agreements, market allocation agreements, bid-rigging agreements, and exclusive dealing agreements.
Price-fixing agreements are agreements among competitors to set prices at a certain level. These agreements can be explicit or tacit, and they can be oral or written. Price-fixing agreements are almost always illegal under competition law.
Market allocation agreements are agreements among competitors to divide territories or customers among themselves. These agreements can be explicit or tacit, and they can be oral or written. Market allocation agreements are almost always illegal under competition law.
Bid-rigging agreements are agreements among competitors to coordinate their bids on government contracts or other bidding opportunities. These agreements can be explicit or tacit, and they can be oral or written. Bid-rigging agreements are almost always illegal under competition law.
Exclusive dealing agreements are agreements between a supplier and a customer that require the customer to purchase all or most of its requirements from the supplier. These agreements can be pro-competitive in some cases, but they can also be anti-competitive if they harm competition in the marketplace.
In conclusion, anti-competitive agreements are common in the marketplace, but they are illegal under competition law. The legal and economic analysis of anti-competitive agreements is complex, and different courts in different countries apply different tests to determine whether an agreement is anti-competitive. Companies should be careful to avoid engaging in anti-competitive agreements, as the consequences can be severe, including fines, damages, and reputational harm.
