Collusion in Vertical Relations Under Article 81 EC

Abstract

The paper's starting point is that EC competition law does not draw any distinction between horizontal and vertical relations when it comes to the definition of the concept of agreement. This approach could make sense if vertical and horizontal agreements were considered as equally harmful to competition. However, since the enactment of Regulation 2790/99 and the emergence of a more economic approach in interpreting Article 81, EC competition law focuses less on the protection of the freedom of action of distributors and recognizes that vertical agreements may bring important efficiency gains from which the consumers may ultimately benefit. The concept of agreement, which is of little practical significance in cartel cases, has thus been interpreted restrictively so as to limit the scope of Article 81 with regard to vertical restraints. It is submitted that, while the aim of reducing the scope of Article 81 to vertical agreements may be legitimate, the formalistic approach currently followed by the courts in defining the concept of agreement under Article 81 EC is theoretically and practically flawed. The study will advance an alternative approach for the definition of the concept of agreement, in particular for vertical relations.

Keywords: vertical restraints, contract, agreement, collusion, concerted practice, resale price maintenance, hub and spoke conspiracy

JEL Classification: K21, L42