Cartels and fair competition

Antitrust law: What is fair competition?

In a world where customers often become partners and where organisations work together in some areas, but simultaneously compete against one another in others, the boundaries of free competition are becoming increasingly blurred. However, this is one of the pillars of the market economy. Activities such as cartels, price-fixing agreements and market dominance harm organisations, customers and consumers. Unfortunately, companies on the free market frequently agree on prices and offers and form cartels.

On the customer side, this generally results in inflated prices for products and services. If these high prices are passed on by companies, consumers also end up paying higher prices than in line with the market. Yet there are also risks for the companies involved in cartels and collusion. Apart from reputational damage and a loss of confidence, companies may face severe penalties if the violation is pursued by the authorities, which is happening increasingly frequently.

Brewery cartel

  • Year: 2014
  • Offence: Banned price-fixing agreements for draught beer and bottled beer
  • Participants: Brewery Groups
  • Fine: €337.7 million

Rail cartel

  • Year: 2012
  • Offence: Quotas and price-fixing agreements
  • Participants: Manufacturers and suppliers of rails
  • Fine: €124.5 million

Fire-fighting vehicles cartel

  • Year: 2011
  • Offence: Anti-competitive market segmentation agreements
  • Participants: Numerous manufacturers of fire-fighting vehicles on the German market
  • Fine: €68 million
  • Other consequences: Insolvency of one of the companies involved due to the cartel fine

Whether horizontal or vertical cartels, international authorities severely punish violations. It goes far beyond large companies and specific industries alone. The penalties and fines imposed can amount to several hundred million euros and can severely affect companies and even plunge them into bankruptcy.

Do you have any questions? Sponge Compliance helps you to establish proper conduct in your company and protect yourself against competition offences.

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