Complying with Competition Law Page 13

Complying with Competition Law

There are certain signs of potential competition law problems
that businesses should watch out for. There are certain
markets or sectors more prone to infringing competition law.
This is more often than not due to factors characterising the
particular market or the business in question. Factors such as
the number of competitors and relative market shares, product
characteristics and conditions for entry are important.

Some warning signs to look out for

Is the business a leader in the market with a consistently
very high market share this may indicate a dominant
position in the market and the business should be careful
that it does not abuse its dominant position by engaging
in anti-competitive conduct.

Are there only a few businesses involved in the market
or is a substantial portion of the market controlled by
a few businesses this can mean it is easier for those
businesses to get together and form a cartel or otherwise
illegally coordinate behaviour.

Are the products mostly the same or standardised, for
example, iron, steel or cement, where the number of
competitors is small and competition is normally only
on price and service rather than product quality and
characteristics this can also make it easier to fix prices.

Is the pricing policy followed by competitors very similar
whether in relation to price, discount or trading terms?

Are there barriers to entering the market, such as high
costs for starting up or legislation? This can facilitate
anti-competitive behaviour between incumbents because

high barriers to entry make it more difficult for new
competitors to enter the market.

Has the market or sector previously been investigated for
possible anti-competitive behaviour, elsewhere if not in
Ireland?

Are members of staff in regular contact with competitors
regular communication between competitors can lead to
information being shared that could lead to

anti-competitive behaviour?

Do market participants have very detailed information
about some of their competitors (e.g. market shares,
pricing practices and future plans)

Trade associations have frequently played a role in
anti-competitive conduct and for this reason the Competition
Authority has published comprehensive guidance, available on
our website, specifically aimed at trade associations: Guidance
Notice on Activities of Trade Associations and Compliance with
Competition Law. We draw your attention to the section in
PART THREE of this booklet that specifically deals with trade
associations. That section is headed Competition Law
Compliance for Trade Associations.

Warning signs of

potential problem areas