Cartel - Antitrust Law On Cartels - European Union

European Union

The EU's competition law explicitly forbids cartels and related practices in its article 81 of the Treaty of Rome. Since the Treaty of Lisbon came into effect, the 81 EC is replaced by 101 TFEU. The article reads:

1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those that:

(a) Directly or indirectly fix purchase or selling prices or any other trading conditions

(b) Limit or control production, markets, technical development, or investment

(c) Share markets or sources of supply

(d) Apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such contracts

- Any agreement or category of agreements between undertakings

- Any decision or category of decisions by associations of undertakings

- Any concerted practice or category of concerted practices that improve the production or distribution of goods, or promotes technical or economic progress, while allowing consumers a fair share of the resulting benefit, and that does not:

(a) Impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives

(b) Afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question

Article 81 explicitly forbids price fixing and limitation/control of production, the two more frequent cartel-types of collusion. The EU competition law also has regulations on the amount of fines for each type of cartel and a leniency policy by which, if a firm in a cartel, is the first to denounce the collusion agreement it is free of any responsibility. This mechanism has helped a lot in detecting cartel agreements in the EU. Published by Routledge, 1999 ISBN 0-415-18717-6, ISBN 978-0-415-18717-6 page 348 or gain political power