Go Party? Go Skafa! Go Skafa! Go Party!

Monopolies, oligopolies and cartels are the opposite of the alliative, productive and dynamic market model. If there are only one or a few companies on the market and there is no credible risk of entry from competing firms, prices rise above the level of competition, either at a monopolistic or oligopolistic equilibrium price. Production also decreases, further reducing social well-being by leading to weight loss. The sources of this market power should include the existence of externalities, barriers to entry and the problem of parasites. Markets cannot be effective for many reasons, so the exception to competition law to the laissez-faire rule is justified if a state failure can be avoided. Orthodox economists fully recognize that perfect competition is rarely observed in the real world and therefore aim for what is called „workable competition.“ [63] [64] This follows the theory that if you cannot achieve the ideal, you choose the second best option[65] using the law to tame the market where it is possible. The CMA and industry regulators have considerable powers to investigate allegations of anti-competitive behaviour. These powers can be used to penetrate and search commercial and private premises with an arrest warrant in the Dawn Raids. They are also entitled to impose fines on companies for which they are found to have violated competition law. Criminal penalties for the most serious infringements of competition law are prosecuted by the CMA and the UK Serious Fraud Office. Price exploitation is one of the forms of direct abuse with pricing. It is difficult to determine when the prices of a dominant company become „abusive“ and this category of abuse is rarely found. However, in one case, it was found that a French funeral service was claiming operating prices, which was justified by the fact that the prices of funeral services outside the region could be compared.

[83] Predatory pricing is a more sensitive issue. This is the practice of reducing the prices of a product so that smaller competitors cannot cover their costs and leave the company. The Chicago school believes that predatory prices are unlikely. [84] In France Telecom SA/Commission,[85] a broadband internet company was forced to pay $13.9 million to reduce its prices below its own production costs. It has „no interest in applying such prices, with the exception of the elimination of competitors“[86] and has been subsidized cross-cuttingly to capture the lion`s share of a booming market. A final category of price abuse is price discrimination. [87] An example could be a company that offers discounts to industrial customers who export their sugar, but not to customers who sell their products in the same market. [88] The potential for agreements between competitors, namely Article 101 of the TFUE, is high, which is consistent with the principle stated in the guidelines that competing firms must define their competition strategy independently of each other.

The legitimate forms of horizontal cooperation discussed in this quick guide serve as carefully controlled exceptions to this general rule. If the terms of these exemptions are not met, there is a high risk that cooperation may be contrary to Article 101 and may even be considered a form related to cartels. Any formal agreement between real or potential competitors, but which has an indirect impact on the way they compete, therefore requires careful legal scrutiny. A particular issue of concern to competition authorities is the inability of participants in the standard procedure to disclose their ownership of IPRs, which will ultimately become part of the standard up to the de facto agreed standard (so-called „patent retention“), with the result that the IPR holder actually provides a guaranteed stream of licences, as all users of the standard have no choice but to pay for it.

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