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Economics for Competition Lawyers, 2nd Edition by Niels, Gunnar; Jenkins, Helen; Kavanagh, James (24th March 2016)

5 Cartels and Other Horizontal Agreements

Gunnar Niels, Helen Jenkins, James Kavanagh

From: Economics for Competition Lawyers (2nd Edition)

Dr Gunnar Niels, Dr Helen Jenkins, James Kavanagh

Subject(s):
Bid rigging — Information exchange — Concerted practices — Object or effect — Restriction of competition — Technology transfer agreements

This chapter deals with horizontal agreements between competitors. It discusses the (moving) boundaries in competition law between hardcore cartels and other horizontal agreements, and between infringements by object and by effect. The chapter reviews the main economic characteristics of cartels—what makes them tick, and in which sectors of the economy do they arise most frequently?—and explains the economics of information-sharing arrangements, including ‘hub-and-spoke’ co-ordination. It then explores various forms of co-operation among competitors, including joint purchasing and selling—the joint selling of sports rights being one example—and the participation of banks in four-party payment card schemes. The chapter discusses R&D and technology licensing agreements, and settlement agreements in the pharmaceuticals industry. Finally, it explores how economics can assist competition authorities with cartel enforcement, including the detection of cartels.

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