Cartels and horizontal agreements

Horizontal commercial agreements that might prevent, restrict, or distort competition are scrutinised under Article 101. Economic analysis has become an integral part of evaluating the effects of such agreements on competition in the market.

Horizontal agreements aimed at softening competition among competing firms - most obviously price-fixing or market-sharing cartels - are illegal. However, without direct evidence it is difficult to establish collusion, especially when the alleged infringement involves information exchange. Even evidence of communication between the parties does not necessarily justify a finding of infringement, and the interpretation of such communications requires careful investigation.

Empirical economic analyses can play a significant role in establishing whether the evolution of prices in a market could have an innocent (i.e. non-collusive) explanation, at least over certain periods or groups of products. Similarly, economic theory can be used to analyse whether the market conditions in the industry are conducive to sustainable collusion, or whether a specific alleged practice (such as an exchange of information between firms) can facilitate collusion.

Moreover, some horizontal agreements can be granted exemption because their efficiency benefits outweigh any competitive harm - for example, if an agreement allows a new market to be opened. The burden of proof in such cases is high, and an exemption will therefore rely on a thorough economic assessment of costs and benefits. CRA has worked on the major reviews of existing Block Exemptions for liner shipping and IATA interlining, and on other similar cases.

Even where there is no exemption and the issue of culpability is beyond doubt, empirical economic analysis is central to assessing the size of fines and the potential for future damages claims. We have carried out estimations of the effects of cartels, including complex analyses of overcharge pass-through, in a variety of industries (see below). We have also provided expert opinions and testimony on damages in a number of cases, working for both plaintiffs and defendants.

We have worked on a large number of competition authority investigations into cartels, as well as private litigation cases against alleged cartel members. Some examples are listed below.

• Road Paving (Switzerland, 2009-)
• Waste Collection (Ireland, 2009)
• Consumer Products (UK, 2008-)
• Airfreight (EU, 2008-)
• Steel (South Africa, 2008-)
• Airfreight Forwarding (Global, 2007-)
• Employment Agencies (France, 2007-)
• Electric Cables (France, 2007-)
• LCD Screens (EU, 2007-9)
• Construction Industry (UK, 2007-8)
• Bananas (EU, 2007-8)
• Dairy Products (UK, 2006-8)
• Jet Fuel (Italy, 2006-8)
• Gas-insulated Switchgear (EU, 2006-7)
• Offshore Services to the Oil Industry (private litigation, 2006)
• Choline Chloride (EU, 2005-6)
• Plasticisers (Belgium, Germany and Hungary, 2005)
• Lifts (EU, 2004-7)
• Methionine (EU, 2004-6)
• Synthetic Rubber (EU, 2004-6)
• Rubber Chemicals (EU, 2004-5)
• Fertilisers (South Africa, 2004-)
• Chemical Tanker Shipping (USA and EU, 2003-7)
• Generic Pharmaceuticals (UK, 2002-)
• Football Kits (UK, 2002-3)
• Tobacco (Italy, 2002)
• Vitamins (EU, 2001-4)
• Bank Charges Finland (EU, 2000-1)

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