Competition Act :: Essays Papers

Competition Act The Competition Act at large focuses on forbidding, respective, agreements between undertakings or concerted practices which may restrict the competition within the market. It forbids all practices, which amount to the abuse of a dominant position in the Market by an undertaking where the practice could potentially, affect trade between its members. The rules of the Act set out the basic framework, providing for the maintenance of effective competition in the market. The Competition Act based on Articles 85 and 86 of the Treaty of Rome provides control to business practices within our market. "The following shall be prohibited as incompatible with the common market: all agreements between undertakings , decisions by associations of undertakings, and concentrated practices which may effect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the common market " Therefor any agreement, decision, and practice caught by Section 5(1) must have the following conditions 1. There must be some form of collusion between the undertakings 2. Trade must be affected 3. There must be must some adverse effect on competition. This Section covers such agreements, decisions, practices which: a. Directly or indirectly fix the purchase or selling price or other trading conditions b. Limit or control production , markets, technical development or investment c. Share markets or sources of supply d. Impose the application of dissimilar conditions to equivalent transactions which other parties outside such agreement, thereby placing them at a competitive disadvantage e. Make the conclusion of contrast subject to the acceptance by the other parties of supplementary obligations, which by their nature or according to commercial usage, have no connections, which the subject of such contracts. The competition act analyzes various aspects so as to promote a healthy business environment. It gives a clear picture in respect to positioning in the market. Clearly, the narrower the definition of the relevant market, the greater the importance of an undertakings share of that market. Once one has defined the relevant market, one must determine whether the questioned undertaking has a dominant position in that market. In general, an undertaking has a dominant position if it can act on the market independently from its competitors. Thus, if a seller can ask any price for a product, even though its competitors are selling a similar product for much less, it is likely that the seller in question has a dominant position.