Cartel & abuse of dominant position

European and national competition rules aim to promote competition and protect consumers, for example from too high prices or too little choice. The basic principle is that companies should determine their market behavior independently of each other. The Authority Consumer & Market (ACM) and the European Commission monitor compliance with competition rules. Violation of these rules can cost a company dearly. Fines quickly run into the millions and agreements may prove void. In addition, in practice, companies that have violated competition law are increasingly being sued by third parties who claim to have suffered damages as a result of the violation. The main pillars of competition law are the cartel ban and the ban on abusing a position of economic power.

Cartel ban

The cartel ban - in a nutshell - prohibits agreements between companies and decisions by industry associations that may restrict competition. Classic examples are: price agreements, market sharing and agreements aimed at limiting production capacity. Such agreements between competitors are almost always prohibited. There is also increasing attention to the exchange of competitively sensitive information, which is increasingly seen as anti-competitive. Less well known perhaps is that agreements in distribution, agency, and franchise agreements also fall under the cartel ban. Examples include agreements on (territorial) exclusivity, selectivity, non-competition, the destination of a location or retail space and restrictions on Internet sales. In particular, possibilities to advertise or make price offers via the Internet, use comparison sites or use social media are recurring topics of discussion.

Abuse of economic dominance

A company in a dominant economic position has a special responsibility not to abuse this position. Having a dominant position in itself is not prohibited, but abusing such a position is. Examples of abuse include: refusing to supply, imposing prices that are too high or too low, using unreasonable or discriminatory contract terms, and tying. In determining whether a firm has a dominant position, the key issue is whether the firm can behave to a significant degree independently of its competitors, customers and consumers. A high market share is an indication of this, but not all-important.