A cartel is a formal agreement among firms in an oligopolistic industry.
Cartel members may agree on such matters as prices, total industry output, market shares, allocation of customers, allocation of territories, bid-rigging, establishment of common sales agencies, and the division of profits or combination of these. Cartel in this broad sense is synonymous with “explicit” forms of collusion. Cartels are formed for the mutual benefit of member firms.
The theory of “cooperative” oligopoly provides the basis for analyzing the formation and the economic effects of cartels. Generally speaking, cartels or cartel behaviour attempts to emulate that of monopoly by restricting industry output, raising or fixing prices in order to earn higher profits.
Source: OECD
Introduction On 19 March 2019, the highest administrative court in the Netherlands (het College van Beroep voor het bedrijfsleven, “CBb”) ruled that the Dutch Competition Authority (“the ACM”) can hold private equity investors liable for cartel infringements committed by their portfolio companies.[1] According to the ACM, and now confirmed by the CBb, the private equity…
In its preliminary ruling in Skanska Industrial Solutions and Others[1], the Court of Justice has ruled on the fundamental question of who is liable to pay compensation in an action for damages for breach of Article 101 TFEU. Is the answer to be found in EU law or national law? Can the person liable to…
The UK’s Competition and Markets Authority (“CMA”) recently welcomed the Court of Appeal’s dismissal of a challenge brought against a decision of the Competition Appeal Tribunal (“CAT”) by Balmoral, a supplier of steel water tanks. The CMA had fined Balmoral £130,000 in December 2016 for a single exchange of pricing information which, in the particular…
On 26 February 2019, the Dutch Authority for Consumers & Markets (“ACM”) published renewed guidelines on both vertical and horizontal restraints. These documents are likely published to reflect the new strategy of the ACM: the stricter enforcement of vertical and horizontal restraints with a focus on vertical price fixing, online sales restraints, purchasing cartels and agreements…
After almost three years of investigation, the Bulgarian Commission for Protection of Competition (“BCPC”) has issued a Statement of Objections against in total 24 Bulgarian undertakings for bid-rigging in public procurement procedures under the National Program for Energy Efficiency of Multifamily Residential Buildings (“Energy Efficiency Program”). The bid-rigging was considered a breach of Article 15…
Introduction In Ireland’s first bid-rigging case the Court of Appeal in its 20 June 2018 judgment decided that: (i) the €7,500 fine imposed by the Central Criminal Court on Brendan Smith was unduly lenient and raised it to €45,000; but (ii) that it was not unduly lenient of the Central Criminal Court to have imposed…
On 18 September 2018, the UK’s Competition and Markets Authority (the “CMA“) announced that Heathrow airport (“Heathrow“) will pay a fine of £1.6 million in relation to an infringement of UK competition law arising from a restriction included within a commercial lease.[1]See, www.gov.uk/government/news/heathrow-and-arora-admit-to-anti-competitive-car-park-agreement Importantly, this case marks the first occasion that the CMA has used…
The question of what constitutes a restriction of competition ‘by object’ has forever been intensely discussed and heavily litigated across the EU. As AG Kokott stated in her opinion in T-Mobile, the existence of an ‘object’ box is justified by the benefit of legal certainty and, not least, the need for conserving resources of competition…
The EU General Court recently upheld an infringement decision of the EU Commission (EC), in which the investment bank Goldman Sachs (GS) was found jointly and severally liable for violating Article 101 TFEU as a result of indirectly owning / holding a stake in Prysmian, a company who participated in cartel activities relating to high…
In July 2005, Germany adopted a new law providing that the limitation period for damage claims is suspended during the investigation of a competition authority (“Suspension Provision”). Ever since, it was unclear whether the Suspension Provision applies only to infringements committed after the new provision came into force, or whether it has retroactive effect. In…
