When it comes to business competition, there are many ways in which companies can engage in anticompetitive behavior. One of the most common forms of anticompetitive agreements is a collusion between two or more companies to restrict competition.

These agreements can take various forms, and it’s important for businesses to understand how they work in order to avoid engaging in such activities. In this article, we will take a closer look at the different types of anticompetitive agreements that companies can engage in.

Price-fixing Agreements

Price fixing is the most blatant form of anticompetitive conduct that can occur. It is an agreement between two or more competitors to set the price for a product or service at a certain level. This agreement can be formal or informal and can occur through direct communication or through the use of intermediaries.

There are many ways in which price-fixing agreements can be structured. For example, companies can agree to fix prices at a certain level, or they can agree on a range of prices within which they will all operate. This type of agreement is particularly harmful to consumers because it eliminates price competition, leading to higher prices and reduced choice.

Market Allocation Agreements

Another type of anticompetitive agreement is a market allocation agreement. This occurs when two or more companies agree to divide a market or customer base between them. This type of agreement is particularly harmful because it eliminates competition in certain areas and can lead to higher prices and reduced choice for consumers.

Bid Rigging Agreements

Bid rigging is another form of anticompetitive agreement that can occur in the context of public procurement. This happens when two or more bidders agree to rig the bidding process to ensure that one of them is awarded the contract. This can occur through the use of fake bids, bid suppression, bid rotation, or other means. This type of agreement can result in the government overpaying for goods or services and reduces competition for government contracts.

Group Boycott Agreements

A group boycott occurs when two or more companies refuse to do business with another company or group of companies. This type of agreement can be particularly harmful to small businesses, as they may be unable to compete with larger companies that have agreed to boycott them.

Conclusion

In conclusion, there are many types of anticompetitive agreements that companies can engage in. Price-fixing, market allocation, bid rigging, and group boycotts are all examples of such agreements, and they can have significant negative effects on competition and consumers. Businesses must be aware of these types of agreements and avoid engaging in them to protect their reputation and avoid legal consequences.