Collusive Practices

Collusive practices comprise different types of conduct carried out by undertakings aiming at the coordination of their behaviour on the market in order to eliminate the risks and uncertainty of competition.

This category of practices encompasses agreements and concerted practices between undertakings (among which cartels) and decisions by associations of undertakings.

Undertakings must determine their market behaviour independently. Where this is not the case, and there is evidence of coordination or collusion, the existence of anti-competitive practices is likely.

Collusive practices are restrictions of competition contrary to the Portuguese Competition Act (Article 9 of Law No. 19/2012 of 8 of May) and, insofar as they affect trade between member States, to Article 101 of the Treaty on the Functioning of the European Union. Such practices are illegal, and fines may be imposed, insofar as they have the object or effect of preventing, restricting or distorting competition in an appreciable manner.

These practices include agreements, concerted practices and decisions by associations of undertakings whereby the undertakings involved coordinate their behaviour on the market in order to eliminate the risks and uncertainty of competition.

Agreements

Agreements constitute the most explicit form of coordination of undertakings’ market behaviour. The concept of agreement includes not only formal contracts but also informal, non-binding arrangements between undertakings, either implicit or explicit. So that they are considered relevant, agreements must be a faithful expression of the parties’ intention to behave on the market in a specific way.

Agreements can be vertical – between undertakings which are placed at a different level of the production or distribution chain (for instance, agreements between a producer of a given product and his distributors) – or horizontal (cartels) - between competing undertakings, i.e. which are placed at the same level of the production or distribution chain (for instance, agreements between producers of competing goods).

Concerted practices

Concerted practices also constitute a form of coordination between undertakings.

They differ from agreements only because of their intensity and form. Concerted practices can take the form of parallel behaviour on the market, not achievable in normal market conditions (taking into account the nature of products, the number of companies, etc.) which is supported by evidence of coordination (contacts between undertakings, exchange of information, etc.)

Decisions by associations of undertakings

Decisions by associations of undertakings constitute, from a formal point of view, unilateral acts – i.e., originating from a single legal entity, the association. Nevertheless, they express the orientation and will of the members of an association and, for this reason, can be considered a form of collective conduct. According to competition rules, an “association of undertakings” includes all entities whose membership consists of undertakings – and, normally, represent the interests of its members (for instance, Professional corporations, Trade associations, etc.). Likewise, according to competition rules, a “decision” by an association of undertakings includes all forms of expressing the intention of their members to coordinate their behaviour on the market (for instance, the constitution of an association, all binding decisions, non-binding orientations, circulars, recommendations, etc. can be considered as “decision”).

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