Agreements and understandings with competitors

Area of expertise

The most significant competition law risks stem from understandings or agreements among actual or potential competitors.

Certain horizontal agreements are generally viewed as carrying the highest risk to a competitive market and are referred to as “hardcore restrictions”. Obvious “hardcore restrictions” include cartels, i.e. secret collusive agreements between or among competitors to: set (or fix) prices, rig bid(s), divide a market geographically or by customer, and reduce production. Fines imposed by the OCCP for cartel conduct have reached the maximum legal limit of 10% of a company’s annual turnover.

It is important, however, to distinguish between hard-core cartels and pro-competitive cooperation agreements. The latter can yield benefits that outweigh the losses stemming from restricting competition. Cooperation agreements can sometimes lead to increased competitiveness and innovation, which could ultimately mean, for example, lower prices of products, higher quality, or a wider selection for consumers. Such forms of cooperation may be found not to constitute “competition-restricting agreements” and thus, may be legal. This applies primarily to R&D agreements and agreements on specialisation.

Each instance of horizontal cooperation among competitors must be assessed individually considering the entirety of the circumstances.

Experience

If the OCCP has charged a client with reaching an illegal agreement or understanding with a competitor, we work closely with our client to identify facts and arguments to defend the charged conduct. We are experienced in presenting a convincing case to the OCCP and the courts, working hand in hand with specialised teams of antitrust economists and industry experts.

If a client’s conduct appears to exceed what is legally permitted and the client chooses not to challenge the charges, Hansberry Tomkiel can assist in identifying available legal remedies to mitigate competition law liability, such as the leniency programme, or using amicable methods of resolving the OCCP’s competition proceedings.

Our recent experience includes:

representing a heating sector company before the President of the OCCP in proceedings concerning alleged anticompetitive horizontal agreements;
drafting leniency applications;
drafting complaints concerning anticompetitive conduct;
providing targeted compliance training to a sales department of a major appliance manufacturer; an energy company and to the management board of a major publishing house.

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