EU Competition Law and Policy - compal

1061/1/1/06 Makers UK Ltd v Office of Fair Trading
1114/1/1/09 Kier Group PLC and others v Office of Fair Trading
Market Sharing and Non-compete Agreements
©Ariel Ezrachi, December 2012
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Article 101(1) TFEU, subsections (b) and (c) specifically refer to the limitation or control of
markets and the sharing of markets. Market sharing allows competitors to shield themselves
from the pressures of competition by dividing the market between them, thereby allowing them
to exercise a large degree of market power within their exclusive territory. Note that whereas an
agreement to fix price might still allow for residual competition between undertakings, for
example on quality of service, market sharing, at its extreme, eliminates all forms of competition
between undertakings.
Horizontal Cooperation Agreements
By contrast to the anticompetitive horizontal agreements discussed above, it is important to note
that horizontal agreements can lead to efficiency gains, allowing medium and small sized
companies to achieve greater efficiencies and cope with dynamic markets. The European
Commission published Guidelines on the Applicability of Article 101 TFEU to Horizontal
Cooperation Agreements [2011] OJ C 11/1. The Guidelines provide an analytical framework for
the most common types of horizontal cooperation, including agreements on research and
development, production, purchasing, information exchange, commercialisation and
standardisation.
Information Exchange Arrangements
Information exchange, even between competitors, may serve legitimate goals when it concerns
for example general information, standardisation or developments of new technologies. ‘The
exchange of information may however have an adverse effect on competition where it serves to
reduce or remove uncertainties inherent in the process of competition… Whether or not
exchange of information has an appreciable effect on competition will depend on the
circumstances of each individual case: the market characteristics, the type of information and the
way in which it is exchanged…’ (see UK OFT Guidelines on Agreements and Concerted
Practices, OFT 401, 3.17-3.23)
T-34/92 Fiatagri v Commission (UK Agricultural Tractor Registration Exchange)
T-35/92 John Deere v Commission
C-89/85 A Ahlström Osakeyhtiö and others v Commission (WoodPulp II)
C-8/08 T-Mobile Netherlands BV and others
Vertical Agreements
Vertical agreements are agreements entered into between companies operating at different levels
of the production or distribution chain. These agreements differ in their potential
anticompetitive effect from horizontal agreements. Whereas the latter may eliminate competition
between competing undertakings, the former concerns the relationship between upstream
operator and downstream distributor or retailer. As a result, vertical agreements often generate
positive effects and would raise concerns predominantly when there is some degree of market
power at the upstream and/or downstream levels. Of major significance to the application of
Article 101 TFEU to vertical agreements are the Vertical Block Exemption and Vertical