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A carve-up is a stitch-up – and unlawful

Competition Law prohibits anti-competitive actions.  We’ve already seen that any form of price fixing is unlawful.  Now we have a reminder that “market-sharing agreements” are also unlawful.

Two suppliers of cleanroom laundry services operated a joint venture.  It appears that the two suppliers agreed to divide customers between them along a geographic boundary and by reference to the nature of the customers’ businesses or the products/services they required.  The alleged arrangement prevented each supplier from supplying customers which were located outside that supplier’s designated area and product/service type.

The Competition and Markets Authority has provisionally concluded that these arrangements restricted competition between the two suppliers.

The CMA said that market-sharing agreements are a serious breach of competition law, which usually deny customers the benefits that arise from competition – such as lower prices, greater choice, innovation and improved service.

Great care needs to be taken not to enter into arrangements of this type – particularly in the context of joint venture and other “partnering” arrangements.

This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoods.co.uk




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