Historically, competition law has evolved at the national level to promote and maintain fair competition in markets that are mainly within the territorial boundaries of national states. As a general rule, national competition law does not cover domestic activities beyond territorial borders unless it has a significant impact at the national level. [2] Countries may authorize extraterritorial jurisdiction in competition cases based on the “doctrine of effect.” [2] [8] The protection of international competition is governed by international competition agreements. In 1945, in the negotiations leading up to the adoption of the General Agreement on Tariffs and Trade (GATT) in 1947, the Charter for an International Trade Organization proposed limited international commitments on competition. These commitments were not included in the GATT, but the World Trade Organization (WTO) was established in 1994 with the conclusion of the multilateral negotiations of the Uruguay Round. The WTO agreement contained a number of limited provisions on various cross-border competition issues on a sectoral basis. [9] British competition law and EU competition law prohibit two major types of anti-competitive activities: each company – regardless of right, size and sector – must therefore be aware of competition law, firstly in order to fulfil its obligations while avoiding heavy penalties, but also to assert its own rights and protect its market position. Identifying a market and defining its dimensions is a “concentration process” that requires the choice of “what turns out to be the clearest picture of the relevant competition process in light of the commercial reality and the purposes of the law.” A concerted practice involves communication or cooperative behaviour between companies, which may not be synonymous with communication, but beyond a company that reacts independently to market conditions. Companies involved in anti-competitive behaviour may consider their agreements to be unenforceable and may face fines of up to 10% of the group`s global turnover and possible actions for damages. An agreement must include a meeting of two or more heads. If the parties believe that a transaction is being considered between them on the basis of maintaining a particular state or adopting a particular behaviour, there appears to be an agreement … The risks associated with the party to an anti-competitive agreement or the abuse of a dominant position are serious. In addition to the above consequences, there is an additional risk to businesses in the disruption and reputation of a business, resulting from lengthy investigations or subsequent litigation by customers, competitors and consumers, as well as significant legal costs and management delays.

The ACCC`s guidelines on concerted practices describe the overall approach the ACCC will take in the investigation of allegedly anti-competitive concerted practices. 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.

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