Concerted Practice

The Chapter I prohibition of the Competition Act 1998 catches not just formal agreements but looser forms of coordination between competitors. CMA guidance explains that for the prohibition to apply to horizontal cooperation 'there must be a form of coordination between competitors, namely, an "agreement" or "concerted practice" between two or more undertakings, or a "decision" by an association of undertakings.' It defines a concerted practice as 'a form of coordination between undertakings in which they have not reached an agreement but they knowingly substitute practical cooperation between them for the risks of competition,' adding that the concept 'implies, in addition to the participating undertakings concerting with each other, subsequent conduct on the market and a relationship of cause and effect between the two.'

The guidance also sets out how a concerted practice can be inferred from conduct without direct proof of an agreement: where an exchange of competitively sensitive information takes place in preparation for anti-competitive coordination, 'this suffices to prove the existence of a concerted practice,' and it 'is not necessary to show that those competitors formally undertook to adopt a particular course of conduct.' There is also 'a presumption that undertakings that take part in a concerted practice and that remain active on the market take account of the information exchanged with their competitors in determining their conduct on the market.' The guidance stresses that each undertaking should determine its market conduct independently, and that the prohibition catches 'any direct or indirect contact between undertakings of such a kind as either to influence the conduct on the market of an actual or potential competitor or to reveal to such a competitor the conduct which an undertaking has decided to follow itself,' where this gives rise to conditions of competition that do not correspond to normal market conditions.