What Is a Cartel

Cartel is an agreement between undertakings which are competitors. Cartels are amongst the most serious infringements of competition rules, which bring benefit to their participants only. Mutual rivals´ agreement eliminates competitive pressure on undertakings resulting in significant price increase, less choice of products and services and depressed innovations. As a result, consumers pay more for worse quality. This negative impact on consumer ultimately affects the economy as a whole. Therefore, cartels are always and under any circumstances prohibited and they are necessary to be sanctioned very strictly.

The most frequent subject of cartels

Cartels are agreements and concerned practices including mainly direct or indirect price fixing, which results in higher prices for customers compared to their independent conduct. Also the market allocation agreements are dangerous since undertakings do not compete in the specified territory. Agreements comprising discrimination, namely the different conditions for particular undertakings or tying the contracts to adoption of commitments which do not relate to the subject of given contract have also the anticompetitive effect. Agreements between undertakings in public procurement, which may result in higher prices of contracts paid from public resources are very dangerous as well.

Detection of such cartels is extremely difficult. The Office is therefore empowered to acquire information and materials and conduct dawn raids at undertakings´ premises.

The Office has prepared so called leniency programme to fight against cartels. Party to the illegal cartel may inform the Office on the existence of a cartel agreement and after submitting the relevant documents and communications the Office may reduce or completely remit the fine which might otherwise reach the amount of up to 10% of turnover.
 
Last update: 01.12.2013