Cooperation and Vertical Agreements
Distinguishing between a legitimate business practice and an anti-competitive agreement is rarely straightforward. Agreements between firms can restrict competition by facilitating collusion or foreclosing rivals, but they can also generate significant benefits for both businesses and consumers.
Often, only economic analysis can show whether allegedly anti-competitive agreements are in fact pro-competitive, since their efficiency benefits outweigh any competitive harm. Some of issues that can be tackled through an in-depth economic analysis are:
- Can a vertical agreement restrict competition in the markets where the buyer or the seller operate?
- Does this agreement have significant pro-competitive effects?
- Do customers benefit from this agreement?
- Is this agreement indispensable for achieving these pro-competitive effects?
We have wide-ranging experience in both evaluating the effects of vertical agreements and advising companies on how best to design them in order to avoid allegations of anticompetitive behavior.
Our experience includes: assessing the set of vertical agreements (including rebate schemes) of a major Italian beer producer, assessing an exclusivity agreement between a major producer of impulse ice creams and its retailers, and supporting a worldwide manufacturer of beauty products in designing a distribution agreement with a wholesale distributor that was also one of its main competitors.
If your company needs advice in evaluating or structuring a vertical agreement, contact us.
Latest Engagements
Alleged restriction of competition agreement in the market for distribution of consumer electronics
Lear has assisted Apple Inc. in a proceeding started by the Italian Competition Authority (ICA) on a vertical agreement with the Amazon group that had allegedly reduced intra-brand price competition on the Amazon.it marketplace. Lear prepared an economic brief highlighting the shortcomings of the ICA’s analysis, the efficiencies of the agreement, and showing that a […] Read more
Alleged foreclosure effects of exclusivity agreements between taxi drivers and cabs dispatching systems
In 2018 the Italian Competition Authority held an investigation to assess whether the non-compete agreements between three traditional radio taxi cooperatives and affiliated taxi drivers in the geographic market of the city of Rome might potentially harm entry and competition by alternative cab dispatching open platforms. Lear assisted one of the incumbent radio taxi cooperatives […] Read more
Compliance assessment of American fast food market in Italy
Lear assisted a consumers’ association in: (i) identifying relevant markets in the fast food sector; (ii) assessing available evidence of a resale price maintenance strategy by a major American fast food chain. Lear developed both qualitative and quantitative analyses, including diversion ratios analysis and price concentration analysis.
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