Page 221 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

ANNEX A: Competition Primer 260

1 Horizontal cartels

Defined as collusion between entities on the same level of the value chain.

Examples include the following types of behavior:

• Horizontal price fixing
• Horizontal market sharing
• Quotas and other restrictions on production

• Collusive tendering
• Agreements relating to terms and conditions
• Exchanges of information

• Advertising restrictions
• Anti-competitive horizontal restraints
Some jurisdictions require that the collusion has an effect on the market, while others require only that there
was an intention to collude (EU). Such behavior, if it fits the required constitutive elements of the offence, is
always considered anti-competitive.

2 Vertical restrictions

These are defined as restrictions imposed in vertical relationships in the value chain.

Examples include:
• Single branding

• Limited distribution
261
• Resale price maintenance

• Market partitioning
• Direct and indirect export bans
• Territorial and customer restraints on buyer’s rights

They may or may not be considered anticompetitive; these restrictions will only have an effect on competition
when the entity imposing restraint has some market power, although this does not have to be dominant/SMP.

Even if the restrictions have an effect on competition, whether or not there is an actual offence is very
dependent on national legislation.
262

3 Abuse of SMP

All these types of behavior are only anticompetitive if undertaken by a dominant/SMP firm, otherwise the
behavior is not problematic in itself. To prove dominance/SMP, you need to look at market share of entity
263

260 This Annex was contributed by Ariadne Plaitakis of Mondato, a member of the TIC WG.
261 Includes exclusive distribution, exclusive customer allocation, selective distribution, franchising, and exclusive supply tying agree-
ments.
262 The US is much more lenient on these types of restraints than EU.
263 Under EU law, there is a presumption of dominance if the entity has more than 50% market share; such presumptions vary
between jurisdictions.

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