Other anti-competitive agreements
What are the other anti-competitive agreements apart from cartels?
In addition to cartels, other forms of agreements or arrangements between undertakings can have the object or effect of preventing, restricting, or distorting competition, and are therefore prohibited by section 4 of the Competition Act 2002 as amended/Article 101 of the Treaty on the Functioning of the European Union. This section outlines some of the more common types of non-cartel agreements and coordinated practices that may infringe competition law.
What are non-cartel horizontal agreements?
As explained in our cartels section, horizontal agreements between competitors to fix prices, share markets, limit output or rig bids in public procurement can cause some of the most serious harm to competition.
There are, however, other types of arrangements between competitors which, while falling short of explicit cartel behaviour, can still infringe on section 4 of the Competition Act 2002 as amended, and Article 101 of the TFEU. Two common examples are the exchange of competitively sensitive information and price signalling.
Exchange of competitively sensitive information
Competition law requires competitors to act strictly independently of one another in the market. Where competing undertakings share commercially sensitive information - whether directly or indirectly, including through a third party - this can give rise to competition concerns.
Such exchanges can be problematic for two main reasons:
- Facilitating collusion: The exchange of commercially sensitive information may enable undertakings to coordinate their behaviour, making it easier to engage in cartel activities such as price fixing, market sharing, limiting output and bid rigging.
- Reducing competitive uncertainty: Even in the absence of a cartel, information exchanges may increase market transparency to such a degree that undertakings are aware of their competitors’ future plans or behaviour on the market. This can reduce incentives to compete, and prevent, restrict or distort competition.
Factors to consider when exchanging or sharing information
While companies may seek to exchange or share information for legitimate business reasons, any exchange of commercially sensitive information between competitors is likely to interfere with normal conditions of competition.
Whether an information exchange may risk restricting competition depends on all of the circumstances in which it takes place, including:
- the type of information that is exchanged;
- the method by which it is shared; and
- the characteristics of the relevant market more generally.
The nature of the information is particularly important. The CCPC considers the following types of information to be commercially sensitive and, in most circumstances, not suitable for sharing between competitors:
- Current or future pricing information (for example, prices, discounts, rebates);
- Current or future output or sales information (for example, volumes, turnover, or market shares);
- Current or future commercial plans (for example, product development, marketing or promotional plans);
- Information about costs; and
- Customer lists.
This list is not exhaustive. Other categories of information may also be commercially sensitive depending on the circumstances of the information exchange. Further guidance for assessing whether an information exchange may lead to a restriction of competition has been published by the European Commission and is available on this website.
Price signalling
Price signalling occurs where competitors knowingly substitute the risks of competition with practical cooperation by making one another aware of intended future prices. Price signalling can happen publicly (for example, through announcements or comments on future prices), or in private through direct contacts between undertakings.
If an undertaking knows that its competitor intends to increase prices, it may be encouraged to do the same since it knows that its customers are less likely to move to their competitor.
However, not all communications relating to prices or pricing conditions amount to unlawful price signalling. Legitimate commercial communications that do not reduce uncertainty about future pricing behaviour between competitors are unlikely to raise competition concerns.
In particular, competition law does not generally prohibit:
- Compliance with legal or regulatory requirements, such as where legislation requires prices to be displayed or advance notice to be given of price changes;
- Historic or aggregated information that does not reveal future pricing intentions of individual businesses;
- General market commentary or speculation about cost pressures or economic trends, where this does not indicate how a particular business intends to set its prices;
- Communications directed solely at customers, such as marketing or advertising, provided they are not designed to signal future pricing intentions to competitors;
- Unilateral pricing decisions, taken independently by individual businesses without coordination or communication with competitors.
Whether a particular communication amounts to unlawful price signalling will depend on the context in which it is made, including its content, timing, and the likelihood that it will be observed and acted upon by competitors.
Vertical Agreements
Vertical agreements are agreements for goods or services between undertakings operating at different levels of the supply chain such as a manufacturer supplying goods to a distributor, or a wholesaler selling products to a retailer. These vertical agreements typically set out the conditions under which goods and services are bought, sold, resold, or distributed.
Vertical agreements are common and are often pro-competitive, as they can lead to more efficient distribution and better outcomes for consumers. Sometimes however, a vertical agreement can have the object or effect of restricting competition and may therefore infringe competition law.
CCPC guidance on vertical agreements
The Competition Act 2002 as amended permits the CCPC to declare in writing that a specified category of vertical agreements, decisions or concerted practices are not prohibited by Irish competition law where they can be presumed to be pro-competitive.
In 2023 the CCPC issued a Declaration in Respect of Vertical Agreements and Concerted Practices (“Declaration”). The Declaration exempts certain categories of agreements and concerted practices from the prohibition set out in section 4 of the Competition Act 2002.
The CCPC also issued a Notice in Respect of Vertical Agreements and Concerted Practices in order to provide guidance on how undertakings can assess their vertical agreements.
At a high level, the Declaration exempts certain vertical agreements from the prohibition on anti-competitive agreements under competition law where certain conditions are met. These conditions are:
- each of the parties to the agreement has a market share not exceeding 30% of the market on which they are active; and
- the agreement contains none of the hardcore restrictions listed in the Declaration.
If you would like to know more about specific types of vertical agreements, see the links below.
How can you make a complaint?
Anti-competitive agreements cause harm to consumers and the wider economy. If you believe you have evidence of anti-competitive agreements between undertakings in the State, this can be submitted to the CCPC through our complaints section.
