Complying with Competition Law Page 10

Complying with Competition Law

Other potentially anti-competitive agreements

Other agreements (written or otherwise) may also be
anti-competitive depending on the circumstances. Such
agreements include:

certain agreements between firms that are not

competitors but are connected through a chain of
distribution, for example manufacturers and distributors,
distributors and retailers, franchisors and franchisees. An
example would be minimum resale price maintenance
the practice where the manufacturer or distributor dictates
the retail price of items to retailers.

agreements between competitors that reduce competition
by co-ordinating behaviour, preventing new competitors
entering a market or discouraging aggressive competition

certain agreements involving exchanges of commercially
sensitive information.

These agreements may have been entered into for seemingly
valid business reasons but may be in breach of competition law
because of their anti-competitive effect. Businesses should get
their own legal advice where they are uncertain or have any
concerns regarding any agreement that may potentially infringe
competition law.

Abuse of dominance

Holding a dominant position in a market means that a business
has the power to act independent of its competitors, customers or
suppliers. Holding a dominant position is not illegal, but abusing
that dominant position to stifle competition is prohibited.

Conduct which the courts have found to involve abuse of
dominance can in particular circumstances include the following:

predatory pricing selling a product or service below cost
to drive competitors out of the market or create barriers
to expansion for such competitors, or to create barriers to
entry for potential new competitors

price discrimination applying different conditions to
similar transactions, putting one business customer at a
competitive disadvantage to another

exclusive dealing requiring or inducing a supplier or
customer not to deal with a competitor

tying making the sale of one product conditional on
the purchase of another product or service that has no
essential connection with the original one

refusal to supply refusing to supply goods or services
without any objective justification for the refusal.