A carve-up is a stitch-up – and unlawful
Competition Law prohibits anti-competitive actions. We’ve already seen that any form of price fixing is unlawful. Now we have a reminder that “market-sharing agreements” are also unlawful.
Two suppliers of cleanroom laundry services operated a joint venture. It appears that the two suppliers agreed to divide customers between them along a geographic boundary and by reference to the nature of the customers’ businesses or the products/services they required. The alleged arrangement prevented each supplier from supplying customers which were located outside that supplier’s designated area and product/service type.
The Competition and Markets Authority has provisionally concluded that these arrangements restricted competition between the two suppliers.
The CMA said that market-sharing agreements are a serious breach of competition law, which usually deny customers the benefits that arise from competition – such as lower prices, greater choice, innovation and improved service.
Great care needs to be taken not to enter into arrangements of this type – particularly in the context of joint venture and other “partnering” arrangements.Back to Our Thinking →