Horizontal agreements in EU competition law refer to agreements between competing companies that seek to limit competition in any way. These agreements could take the form of price-fixing, market allocation, or restricting supply or production.
The European Union (EU) has strict laws regarding such agreements, and businesses must ensure that they comply with these laws when conducting business in the EU. The EU`s competition rules are designed to ensure that businesses compete fairly and that consumers benefit from this competition.
The EU`s rules on horizontal agreements include Article 101 of the Treaty on the Functioning of the European Union (TFEU). This article prohibits any agreement between companies that restricts competition in any way, such as agreements on price-fixing, market sharing, and limiting production or supply.
The European Commission, the body responsible for enforcing EU competition law, has the power to investigate and sanction businesses that violate these rules. Businesses found guilty of violating EU competition law may face significant fines and other penalties.
The EU`s competition law allows for some exemptions to horizontal agreements if they are deemed to benefit consumers. For example, an agreement between companies to jointly develop new technology that will benefit consumers may be exempt from competition rules.
Other permissible agreements include those that improve production, efficiency, or distribution, and agreements that have no significant impact on competition. However, businesses must ensure that such agreements do not limit competition to an unreasonable extent.
In conclusion, businesses operating in the EU must be aware of the strict competition rules regarding horizontal agreements. Any agreements that limit competition in any way, including price-fixing, market allocation, or restricting supply or production, could result in significant fines and other penalties. It is essential to comply with EU competition law and ensure that any agreements are in the best interests of consumers.