Article 81 (1) of the EC Treaty states that
“The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market.”
The term ‘concerted practices’ is clearly stated as prohibited under this article, yet the distinction between these prohibited practices and similar, yet legitimate, oligopolistic behaviours is a debatable question.
In this paper, this question is addressed. In Section I, the basic concepts of oligopolistic markets and the natural behaviours of firms competing in these markets are described, and definition of concerted practices by case law is given. In Section II, the establishment of the common observation resulting from these two behaviours – parallel conduct – is discussed. In Section III, other evidence often used, together with the observation of parallel conduct, to prove the use concerted practices is presented. In Section IV,
The paper will follow the discussion of how concerted practice is establish, giving cases decided by the Court as reference. Throughout the paper, points that are relevant to the distinction of legitimate oligopolistic behaviour from concerted practice is concluded at the end of each section.
After describing and defining oligopolistic markets and concerted practices, it was observed that parallel conduct is a result of both. The difference lies in whether the such parallel conduct can be explain by market conditions, and whether other evidence of collusion exist. Such evidences discussed here include existence of practices which facilitate coordination, evidence of contact, of information exchange, of reciprocal cooperation, and of consensus between undertakings....