Horizontal Co-Operation - The European Commission’s Draft Guidelines Are A Helpful Development

Adam Smith famously said that "people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices". So it is unsurprising that both competition authorities and legal advisers to companies that conclude co-operative agreements with competitors (such as research and development, production, purchasing, commercialisation, standardisation and exchange of information) usually treat these issues with care, given that such conduct can lead to price-fixing, market sharing or limiting output.

Nevertheless, however laudable such caution may be for compliance-minded companies, it is easy to forget that there is a wide range of co-operation mechanisms between competitors that are unlikely to be of concern from a competition perspective. Indeed, many may give rise to valuable efficiencies – and even be procompetitive.