Restrictive Practices

October 13, 2017

Restrictive practices refer to practices that prevent, restrict or distort competition.

 

Abuse of dominant position refers to a company abusing its significant position on the market. It can occur in the form of predatory pricing, production limitations or refusal of business. A company in a dominant position has a special liability to ensure that its practices do not jeopardise effective competition.

 

In a cartel, the parties have agreed on a contract, decision or uniform approach that prevents, restricts or distorts competition. Horizontal restrictive practices may also result from the activities of an industry organisation; examples of this include price recommendations which are prohibited.

 

Prohibited restrictive practices may be the consequence of delivery and distribution contracts, i.e. contracts regarding buying and selling between companies at different production or distribution levels.

Restrictive practices are taken seriously

Significant resources are reserved for investigating cartels, and the penalties for them are constantly becoming stricter. Restrictive practices may lead to penalties and substantial civil liabilities later on.

 

Restrictive practices are assessed on a per-case basis. Usually, the form of the activity is less important than the effect the practice has had on competition.

 

Thorough knowledge of the regulations concerning restrictive practices and the competition authorities’ assessment conventions is essential. We have comprehensive practical experience of cases of restrictive practices and the processes for their settlement in Finland and within the EU.

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