BTF1010 Study Guide - Final Guide: Bid Rigging, Price Fixing
6 Jun 2018
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COLLUSION
Collusion: Horizontal agreements between competitors – anti-competitive.
Collusion between competitors may be practised for any number of reasons. Firms may
collude to:
• Fixed prices in their market
• Restrict output
• Share the market
• Set industry standards
• Discipline uncooperative competitors
Good and Bad of Cooperation
o Bad: if fixes prices, restricts output, share markets, forces uncooperative
people out of the market and is anticompetitive – bid rigging.
o Good: When joint ventures or authorisation is granted, or no lessening of
competition.
WHY CONTROL MARKET COOPERATION?
Market cooperation can be anti-competitive as cartels allow market sharing or price fixing
etc. It enables cartels to obtain higher prices than those under competition, and contractual
restraints of trade does not catch the conduct that parties are happy to adhere. The essential
behaviour of a cartel is monopolistic in nature.
• Cartel – Businesses agree to act together instead of competing with each other.
PART IV – DIVISION 1 (CRIMINAL) || DIVISION 2 (CIVIL)
Cooperation
The definition of “cartel provision” includes four varieties of cartel conduct:
Document Summary
Collusion between competitors may be practised for any number of reasons. Firms may collude to: fixed prices in their market, restrict output, share the market, set industry standards, discipline uncooperative competitors. Market cooperation can be anti-competitive as cartels allow market sharing or price fixing etc. It enables cartels to obtain higher prices than those under competition, and contractual restraints of trade does not catch the conduct that parties are happy to adhere. The essential behaviour of a cartel is monopolistic in nature: cartel businesses agree to act together instead of competing with each other. Part iv division 1 (criminal) || division 2 (civil) Division 1 s44zzrf and s44zzrg (criminal: criminal beyond reasonable doubt, fault elements intentionally and knew or believed contained a cartel provision, liability. Division 2 s45 (civil: competition and consumer act s45(1)(a) exclusionary provision, competition and consumer act s45(1)(b) has purpose of likely effect of substantially lessening competition, penalties and fines.
