Restrictive agreements

Both horizontal agreements (between competitors) and vertical agreements (between undertakings operating on different levels of the production and distribution chain, e.g. between manufacturers and distributors) restricting competition are prohibited and void according to the Competition Act. However, certain restrictive agreements are excepted or exempt from the prohibition. Agreements of minor importance (the joint market share of the participating undertakings of which do not exceed ten percent) are not prohibited, and where the undertakings engaged are not independent of each other, their agreement does not qualify as restrictive under the Act. An agreement is not caught by Article 11 if it has beneficial effects to economy, at the same time it allows consumers a fair share of the resulting benefit, the restriction or exclusion of competition does not exceed the extent necessary to attain economically justified common goals, and it does not create the possibility of excluding competition in respect of a substantial part of the products concerned. Block exemption regulations facilitate the application of exemption form the prohibition. The fact that a given agreement meets the criteria for being exempt needs to be established by the undertakings concerned. It may happen that the undertakings have to prove their agreement-s qualification for exemption in a competition supervision proceeding; the Competition Council does not (and even may not) establish in its decision the fact of an agreement's being exempted.

The most harmful restrictive agreements are the so-called hardcore cartels. These agreements stipulate direct or indirect fixing of purchase or selling prices or other business terms and conditions or relate to the allocation of the market. Therefore, neither an exception nor an exemption can apply to them. Mention must be made of the provisions of the Criminal Act, having been in force since 1 September 2005, that penalise bid rigging agreements in restraint of competition in public procurement and concession procedures.

Decisions made by associations of undertakings (social organisations of undertakings, public corporations or other similar organisations), which have as their object or effect the restriction of competition are also prohibited. This provision of the Competition Act is explained by the aim of preventing such defences from the side of the undertakings, where they claim to be exempt from the prohibition as it were not them, but the association of undertakings (to which they were parties) which entered into the agreement. These associations are, in fact, capable of affecting their member undertakings- market behaviour, thus the association itself qualifies as a market player.