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Horizontal Agreement Definition Economics

Written By: Chris - Sep• 22•21

See `Horizontal guidelines`: guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements (OJ L 101, 10.1.2001, p. 1). OJ C 11, 14.1.2011, pp. 1-72). agreement between potential competitors, real or by definition, i.e. undertakings which operate at the same level of the production or distribution chain and which include, for example, research and development, production, purchasing or marketing. Horizontal agreements may restrict competition, in particular where they involve price fixing or market sharing, or where the definition of market power resulting from horizontal cooperation has negative repercussions on the market in terms of price, production, innovation or product diversity and quality. On the other hand, horizontal cooperation can be a way to share risks, reduce costs, pool know-how and bring innovation to market faster. For small and medium-sized enterprises in particular, cooperation can be an important means of adapting to market developments.

The cumulative market share threshold that contracted companies can reach to benefit from a block exemption is 20% (for specialisation agreements) and 25% (R&D) respectively. Where these values are exceeded, R&D and specialisation agreements are not automatically prohibited, but must be assessed individually for exemption under Article 101(3) TFEU. Note: Horizontal agreements are generally contrary to antitrust law. Horizontal agreements (i.e. agreements between undertakings operating at the same level of production or negotiation) may affect competition and are subject to EU competition rules, in particular Article 101 TFEU. In 2011, the European Commission adopted guidelines for the evaluation of agreements related to cooperation between competitors. These guidelines complement the block exemption regulations for research and development (R&D) agreements and specialisation agreements. Severe forms of restrictions of competition (so-called basic restrictions) such as price cartels, production restrictions, market shares or customer groups are prohibited, regardless of the parties` position in the market. This glossary corresponds to the list of keywords used by the concurrences search engine. Each keyword is automatically updated by the latest EU and national jurisdictions of the e-Competitions Bulletin and Competitions Review.

The definitions are taken from DG COMP`s glossary on terms used in EU competition policy (© the European Union, 2002) and the OECD`s Industry Organisation Glossary on Economics and Competition Law (OECD ©, 1993). “Horizontal agreement.” Merriam-Webster.com Legal Dictionary, Webster merriam, www.merriam-webster.com/legal/horizontal%20agreement. Retrieved December 1, 2020. EE&MC has exceptional expertise to carry out such analyses and implement the right market definition. The assessment referred to in Article 101(3) TFEU shall be carried out in the context of a market analysis which carefully assesses the economic effects of an agreement on competition and the anti-competitive effects of an agreement. Only if the positive effects outweigh the negative effects can an undertaking benefit from an exemption from the prohibition of cartels, despite high market shares. What prompted you to look for a horizontal match? Please let us know where you read or heard it (including the quote, if possible). The prohibition of cartels and related horizontal agreements is one of the few undisputed provisions of competition law and is regarded as the basis of economic principles considered to be the basis of competition policy. However, the examination is proving difficult to express generally accepted views on the conception of the law of the agreement, in contradiction with key aspects of legal doctrine and practice and unrelated to essential elements of the modern theory of the oligopoly.

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