TRAINING FOR TRADE PRACTICE INVESTIGATION COMMISSION (TPIC) MAY 2008 ADDIS ABABA, ETHIOPIA ...
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Transcript of TRAINING FOR TRADE PRACTICE INVESTIGATION COMMISSION (TPIC) MAY 2008 ADDIS ABABA, ETHIOPIA ...
TRAINING FOR TRADE PRACTICE INVESTIGATION COMMISSION (TPIC) MAY 2008
ADDIS ABABA, ETHIOPIA PRESENTED BY: Peter G. Kanyi - Monopolies and Prices Commission –Kenya
04
/21
/23
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HORIZONTAL HORIZONTAL RESTRAINTS/AGREEMENTSRESTRAINTS/AGREEMENTS
Definition of restraints to trade.Are acts perpetrated by two or more
enterprises whose effect(s) is/are likely to eliminate or limit competition.
attributable to firms, which are horizontally related.
Competition laws postulate a competitive marketplace in which rival firms compete with respect to prices, products, and services. Any arrangement, countering this principle conduct among competitive entities, is accordingly suspect.
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NATURE OF HORIZONTAL AGREEMENTS
Always anti-competitive agreements.These agreements have a direct adverse
effect on competition and are very unlikely to bring consumers any real benefits.
Agreements with pro- and anti-competitive effects.
Best analyzed on a case-by–case basis that considers and weighs both sets of effects. Such a “rule of reason” approach is applied to horizontal agreements on:
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Agreements subject to varied treatment .
These are evaluated basing on the different views on underlying economic models on markets.
“Small” agreements. Declining/Shrinking markets. Import and Export Cartels.
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Agreements subject to varied treatment continued…
“Vertical restraints with horizontal consequences: -Most-Favored-Customer Provisions.
-Facilitating Horizontal Coordination. -Dampening Competition. -Raising Rivals' Costs.
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Efficiencies advanced in favor of most favored customer.
most-favored-customer provision helps a buyer lower his/her costs by purchasing inputs for less.
where firms must write long-term contracts with their customers knowing that supply and demand conditions might change unpredictably.
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Conditions likely to facilitate anti-competitive agreements.
Relatively small number of enterprises; High entry barriers;Homogeneous or standardized
products; Sales made in frequent small amounts
rather than infrequently in large amounts;
Facilitating practices such as the “Most Favored Nation”;
Patterns
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SOURCES OF INFORMATION SOURCES OF INFORMATION ON COLLUSIONON COLLUSION
Correspondence and meeting files;Interviews with former
management and marketing executives;
Former and current customer complaints;
Interviews with customers;Bid records;
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Interviews with small suppliers about pricing behavior of major competitors;
Interviews with importers and new entrants;
Correspondence and trade association records; and
Correspondence of the trade association director.
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THE END
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