Agreements and abuse of dominant position

Undertakings sometimes conclude agreements and coordinate their market behaviour. Cooperation between undertakings may have as its object or effect the restriction of competition.

This happens, for example, when several undertakings jointly fix prices or divide the market between them by setting up cartels to preclude competition. Agreements of this kind interfere with competition, and reduce incentives to operate efficiently and to offer products at prices and with features that are best able to satisfy consumer needs.

Competition may also be hampered by agreements between undertakings operating in successive phases in the production process (for example, exclusive agreements between the manufacturer and the distributor of a product, or between the supplier of raw materials and a manufacturer), particularly when these are likely to erect market entry barriers against new competitors.

When agreements between undertakings, even only potentially, reduce competition substantially within the national market or in a substantial part of it, they are prohibited (Section 2 of the Act).

Considering that the coordination of a firm's behaviour intended to distort competition can take various forms, the law considers agreements between undertakings formal agreements, not only between "economic operators", but also all forms in which several undertakings may deliberately act jointly to regulate their conduct on the market. Agreements therefore include concerted practices and resolutions adopted by associations of undertakings and consortia.

When certain conditions are met, the Authority is empowered to authorise agreements which restrict competition for a limited period of time (Section 4 of the Act). In order to qualify for this exemption, the companies concerned must show that the agreements improve supply conditions on the market, that the limitations on competition are absolutely necessary in order to obtain these positive effects, and that the improved conditions of supply bring a substantial benefit to consumers (for example, by reducing prices or providing a good or service which would not otherwise be available). Under no circumstances will permission be granted if the restrictions are not essential for achieving the goals mentioned above, nor if any significant portion of the market would be excluded from competition.

After the entry into force of EC Regulation no. 1/2003 of the Council of 16 December 2002, concerning the application of the rules of competition referred to in Articles 101 and 102 of the TFUE (Treaty on the Functioning of the European Union), agreements likely to prejudice trade between member States must be subjected to Article 101 of the Treaty. The same Regulation repealed the permission waivers for agreements announced in advance and adopted the "legal exception" system; the undertakings themselves, at their own risk, determine whether the agreement satisfies the requirements for an exemption, pursuant to and in accordance with Article 101(3); any controls occur ex post if an investigation is launched. Pursuant to and in accordance with Article 5 of this Regulation, therefore, the Antitrust Authority may not proceed to assess the merits of prior notices submitted by undertakings whenever Community-level agreements are involved.

The frequency with which the Community-level significance is proclaimed, even for agreements between domestic undertakings, has dramatically reduced the number of occasions on which the Authority may exercise its waiver power pursuant to and in accordance with Section 4 of Law no. 287/90.