COMPETITION LAW

Horizontal Agreements


Horizontal agreements are between and among competitors engaged in commercial or economic activity at the same level of the supply chain – production, distribution, or supply of goods or services.

Generally, hard-core cartels are the results of horizontal agreements. Examples of horizontal agreements are:


Businesses should set the prices of their goods or services themselves without sharing any commercially sensitive information or co-ordinating with their competitors. Agreements between and among competitors that raise, lower, or set prices at a certain level to alter competitive dynamics in the market are strictly prohibited under the Act.

Any agreement between businesses or any decision of an association that restricts the production of the goods or limits the provision of services is a prohibited one. By reducing output or limiting service provision to the detriment of consumers, competitors could create an artificial shortage results in an increase in prices and higher margins for themselves. Similarly, agreements or decisions to affect technological development by not investing into research and development or agreements or decisions to limit investment in the relevant market are anti-competitive.

Businesses should not agree to sell or distribute or provide their goods or services to only some customers or allocate markets or geographic areas and then agree not to compete in them.

This occurs when competitors have an arrangement so that one of the competitors could win a contract at a pre-determined price and as a pre-determined outcome. Bid rigging can take many forms. Other competitors may withdraw their bids, price them higher, or submit bids with unacceptable terms and conditions, thus resulting in a certain, predictable outcome.




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