Horizontal agreement

 

Institution Definition

Arrangement between actual or see definition forpotential competitors, i.e. undertakings operating at the same level of the production or distribution chain, covering for example research and development, production, purchasing or commercialisation. Horizontal agreements may restrict competition in particular where they involve price fixing or market sharing, or where the see definition formarket power resulting from the horizontal co-operation causes negative market effects with respect to prices, output, innovation or the variety and quality of products. On the other hand, horizontal co-operation can be a means to share risk, save costs, pool know-how and launch innovation faster. In particular for small and medium-sized enterprises co-operation can be important means to adapt to the changing market place.

See so-called "Horizontal guidelines": Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (OJ C 11, 14.1.2011, p. 1–72).

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