Concerted Action Agreement

Posted on December 6, 2020

This is a well-known scenario in U.S. antitrust proceedings: the complainants claim that an identical pricing model (or refusal to deal) is “concerted” and therefore illegal in itself; The defendant replies that the practice is merely “deliberately parallel” or “interdependent” and is therefore legal. Under U.S. law, in order to legally avoid summary judgment or judgment, a complainant must present a “plus factor,” evidence that “excludes the possibility” that the defendant`s actions were merely interdependent. The courts identified several positive factors – for example, evidence that the alleged conduct was contrary to the defendant`s interest, unless it was in the context of an agreement — but they were particularly vague about what exactly concerted action is. Clearly, the Sherman Act does not require the plaintiff to prove that the defendants entered into a legally enforceable contract — the Sherman Act ends up making agreements illegal and therefore unenforceable. But beyond that, the law tells us little. The courts still cite the 60-year-old supreme court`s formulation that a Sherman Act agreement only involves “a common unity of purpose, conception and understanding, or a meeting of minds.” Unfortunately, this language could be easily interpreted to condemn deliberate parallelism. “A company that imports and organises the sale of products in several Member States and, to this end, seeks to find a distributor in each of the Member States concerned, offers an exclusive distribution agreement, distributes imported products to domestic distributors and tries to coordinate its sales efforts, including through regular meetings. is required, because of its central position, to exercise particular vigilance in order to prevent such concerted efforts from leading to conduct contrary to competition law, even if these activities do not necessarily give it a decisive influence on the behaviour of each distributor.” SA Music French Broadcast e.a./Commission [1983]. The concept of concerted practices refers to companies that, knowing how to work, have collusive behaviour to reduce uncertainty in the market. Contrary to an agreement, such collusive behaviour does not require participants to follow a common plan defining their action in the market. On the contrary, it is sufficient for participants to “knowingly adopt or adhere to collusive devices that facilitate the coordination of their business behaviour.” However, companies should be aware that not all information exchanges are automatically considered a concerted practice.

Until now, the case law has differentiated between an announcement that followed immediate implementation and an announcement in which companies would take the time to review its impact, noting that it was characterized as concerted behaviour and was not sent. However, in the case of public notices, companies should ensure that there is immediate implementation, as the exchange of information under the T-Mobile decision attributes a concerted practice to the parties present at the meeting who remain in the market. In addition, the Commission`s guidelines allow companies to avoid any presumption of concerted practice in these situations by making it clear that the company does not wish to obtain such data and by publicly advertising what happened at the meeting.

No Replies to "Concerted Action Agreement"