Horizontal Agreement Investopedia

What prompted you to look for a horizontal match? Please let us know where you read or heard it (including the quote, if possible). a non-binding agreement between direct competitors may, depending on the circumstances, amount to a restrictive horizontal agreement. Price agreements are a concept linked to horizontal agreements. It is an agreement where several competing companies enter into a secret agreement to set the prices of their products in order to avoid genuine competition. Price agreements are a criminal offence under federal cartel legislation. Pricing also includes the secret setting of advantageous prices between suppliers and preferred producers or distributors to compete. A horizontal merger is a merger or consolidation of a company that takes place between companies operating in the same sector. Competition between companies operating in the same space tends to be stronger, which means that synergies and potential market share gains are much greater for merging companies. Depending on the circumstances, horizontal agreements for the exchange of competitively sensitive information may be considered as horizontal anti-competitive agreements and fall within the reprecities of Article 4 of the Competition Law. Whether an agreement is legally binding is irrelevant to the extent of the assessment of competition law; Horizontal agreements are restrictive agreements between competitors operating at the same level of the production and distribution chain. Horizontal agreements which have as their aim or likely to prevent, distort or restrict competition, directly or indirectly, constitute infringements.

Article 4 of the Law on the Protection of Competition No. 4054 (the “Competition Law”) directly prohibits this. The horizontal agreement is a cooperation agreement between two or more competing undertakings operating at the same market level. This usually serves to develop a healthy relationship between competitors. The essential clauses of the agreement may contain guidelines on pricing, production and distribution. The agreement may also address the exchange of product and market information. Horizontal agreements may lead to infringements of anti-cartel rules, as such agreements may contain clauses limiting competition. agreement between potential competitors, real or by definition, i.e. undertakings which operate at the same level of the production or distribution chain and which include, for example, research and development, production, purchasing or marketing. Horizontal agreements may restrict competition, in particular where they involve price fixing or market sharing, or where the definition of market power resulting from horizontal cooperation has negative repercussions on the market in terms of price, production, innovation or product diversity and quality. On the other hand, horizontal cooperation can be a way to share risks, reduce costs, pool know-how and bring innovation to market faster. For small and medium-sized enterprises in particular, cooperation can be an important means of adapting to market developments.

See `Horizontal guidelines`: guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements (OJ L 101, 10.1.2001, p. 1). OJ C 11, 14.1.2011, pp. 1-72). Note: Horizontal agreements are generally contrary to antitrust law. A horizontal merger can increase a company`s revenue by offering existing customers an additional range of products.. . .

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