Anti-competitive agreements are agreements between two or more companies aimed at limiting or eliminating competition in a specific market. In the European Union, such agreements are illegal under competition law, which is aimed at promoting free and fair competition within the EU single market.
Examples of anti-competitive agreements that are prohibited include price-fixing, market-sharing, and bid-rigging. These agreements can harm competition and consumers by limiting choices and increasing prices, ultimately leading to reduced innovation and lower quality products or services.
The European Union enforces competition law through the European Commission, which has the power to investigate and impose fines on companies found to be in violation. The fines can be significant – up to 10% of a company`s annual global revenue.
In addition to fines, companies can also face damage claims from consumers and competitors who have suffered as a result of the anti-competitive agreement. These claims can lead to significant financial losses for companies, as well as reputational damage.
As a result, it is essential for companies doing business in the EU to ensure that their agreements and practices are in compliance with competition law. This can be challenging, as competition law is complex and constantly evolving. However, companies can seek guidance from legal experts and ensure that they are regularly reviewing and updating their practices to remain compliant.
In conclusion, anti-competitive agreements are illegal in the EU and can have severe consequences for companies found to be in violation. It is essential for companies to ensure that their practices are in compliance with competition law to avoid fines, damage claims, and reputational damage. By doing so, companies can ensure they are promoting free and fair competition within the EU single market.