Horizontal Agreement

The Competition Act 1998 prohibits, subject to limited exceptions, agreements between undertakings, decisions by associations of undertakings, or concerted practices which have as their object or effect the prevention, restriction, or distortion of competition within the UK and which may affect trade in the UK — a prohibition the Act itself refers to as the 'Chapter I prohibition'.

The CMA's guidance on horizontal agreements explains how it applies the Chapter I prohibition specifically to horizontal agreements, meaning agreements between actual or potential competitors, as distinct from vertical agreements between businesses at different levels of the supply chain such as a supplier and a distributor. The guidance also covers the application of the Specialisation Agreements Block Exemption and the Research and Development Block Exemption, which can exempt certain categories of collaboration between competitors from the prohibition.

Because horizontal agreements are between direct rivals, arrangements such as price-fixing, market-sharing, and output limitation between them are treated as among the most serious competition law infringements, in contrast to many vertical agreements which more commonly raise competition concerns only in specific circumstances.