Templates On Horizontal Restrictions

ICN Templates

ICN templates (as long as they are available) are quite useful to understand the basics of national/regional competition policies in a comparative way. However, it is important to remember that reading the templets is not a subsistute for consulting the referenced statutes and regulations, but it should be only considered a nice starting point that allow you to understand better the main differences of Competition policy among Countries.

Art. 81 of the EU Treaty applies both to horizontal and vertical agreements.
It applies as long as trade among member states is affected. In this respect, we pointed out a resemblance to Sec. 1 of the US Sherman Act, which is federal antitrust legislation.
Some examples of restricted practices are listed in par.1 of article 81, and we could probably think of many more of them.

Our discussion during the class focused on some specific topics of ICN templets. You can find below some of them:

  1. The definition of the term "cartel"
  2. The scope of the prohibition of hardcore cartels
  3. The nature of the partecipation in a hardcore cartel ( civil or criminal offence)
  4. The investigating institution(s) and its(their) decision making process
  5. Leniency policy (full and partial)

Now, our aim will be to outline the main differences related to those topics among the countries.


The provision of German competition policy on the prohibition of agreements restricting competition is strikingly similar to art.81 EU Treaty.
This similarity is basically due to the fact that Germany has a successful tradition in competiton policy: German pro-competition laws can be traced back since 1909 with the so-called “Gesetz gegen den unlauteren Wettbewerb” or UWB, which was directed at unfair practices in competition. But it was just after World War II that Germany - ahead of other European states - provided for the fulfillment of an extensive competition policy. The US played a key role according to their experience in this matter (as my colleague dealing with US competition policy will explain): they pushed the German authorities to develop an efficient anti-trust policy in order to limit the German pre-war economic strength - based essentially on horizontal concentrations in the basic industries (coal, iron and steel) - but also to avoid the reestablishment of pre-war cartels which threatened the importation of US manufactured goods. As a matter of fact, in 1952 the “Act Against Restraint of Competition” (Gesetz gegen Wettbewerbsbeschraenkungen - GWB) was brought to the Parliament but it took some years until the law entered into force (January 1, 1958). It was applied to all restraints of competition that affected the German market, even if caused abroad (novelty!).


The main organization that control and detect cartels and anti-trust behaviors is the competition and market guarantor Authority (”Autorità garante della concorrenza e del mercato”). It is an independent authority established by law n. 287 of October 10th, 1990 – The Competition and Fair Trading Act. The Authority that assist the investigating agency is the Custom and Excise Police (“Guardia di Finanza”).

Article 2 defines as “cartels” any agreements and/or concerted practices between undertakings, and any decisions, even if adopted pursuant to their Articles or Bylaws, taken by consortia, associations of undertakings and other similar entities. Agreements are prohibited between undertakings which have as their object or effect appreciable prevention, restriction or distortion of competition within the national market or within a substantial part of it.

There are no distinctions between hardcore cartels and other types of cartels: it is not expressly distinguished by the Italian legislation. In article 15 it states that: “in the most serious cases the Authority, depending on the gravity and the duration of the infringement, imposes a fine which may go up to ten per cent of the turnover of each undertaking or entity during the prior financial year.” The Italian legislation considers the participation in an hardcore cartel illegal per se and it is an administrative offence.
In general, the investigation process is initiated ex officio or on the basis of a complaint (in writing and not anonymously form) and there are no leniency program exists.

Investigative measures: (art. 14.2) “The Authority may, at any stage in the investigation, request undertakings, entities and individuals to supply any information in their possession and exhibit any documents([…]including internal and unofficial documents, which have been produced and are used for the purposes of the undertaking’s operations,…) of relevance to the investigation; it may conduct inspections of the undertaking’s premises, books and records and make copies of them,…; it may..consult experts on any matter of relevance to the investigation.” For the exercise of the Authority’s investigative powers is not required any court warrant.

The officials charged to perform an inspection are vested with the following power:

  • to demand access to all premises, land and vehicles of the party under inspection, excluding their place of residence or domicile which are being investigated;
  • to check any document and to make copy of it;
  • to request information and explanations to be given orally.

The subjects taking part in the proceedings may:
1. produce submissions, documents, arguments and opinions;
2. have access to documents produced or permanently retained by the Authority in the course of the proceedings.

There is no differences between secrets on the basis of their way of collection. The Italian law makes a distinction between commercial secrets and personal, commercial industrial and financial information of confidential nature; access is not allowed to documents containing commercial secrets. Whenever these constitute evidence of the infringement of the law or contain essential information for the defence of the undertaking concerned, access may be grated to them but only in respect of such essential information for defence purposes.

At the closure of the proceeding the Authority may adopt many types of decision: it may establish that no violation was found or, when if finds that there is an infringement, it may prohibit the continuation of the conduct and set a deadline within which the undertakings and entities concerned are to remedy the infringements. In the most serious cases the Authority imposes a fine which may to up to ten per cent (maximum)of the turnover of each undertaking or entity during the prior financial year.
The Authority may fine anyone who refuses or fails to provide the information or exhibit the documents requested without justification, in an amount up to 25.000 euro which is increased up to 50.000 euro in the event that they submit untruthful information or documents, in addiction to any other penalties provided by current legislation.

How it is said before, the only nature of the sanction for procedural breaches is administrative and the amount of the fine shall be established taking into account the gravity and duration of the infringement.

The template of Italy can be downloaded here.


As it is written in the US template (it can be downloaded here), the main law regarding cartels is the Sherman Act (here a link to the text). There isn't a clear definition of cartels, however Article 1 tells:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.

A very interesting thing is that hardcore cartel activies are illegal per se and it is a criminal offense (individual can be sent to jail for up to 10 years), there are no exemptions. However, some immunities can stop the Antitrust Division of US Department of Justice in investigating and in taking action against the cartel.

Other interesting fact regarding US Competition Policy that are written in the template are the handling of complaints and the leniency program. About the first topic, Antitrust Division accept any complaint regardless to the form in which is received, and evaluates all of them: however there is no obbligation to take any action and no time limit for the decision to act or not on the basis of a complaint. About the leniency program, the most important fact is that, differently from other policies, only one one company is eligible for full leniency (the first to come forward providing informations and unveil the cartel): no partial leniency is available.


Australia's core competition law provisions are contained in Part IV of the Trade Practices Act 1974.

Anti-competitive agreements

The legislation does not define the term “cartel”, but specifically refers to horizontal agreements fixing, controlling or maintaining prices.
The legislation prohibits contracts, arrangements or understandings containing a provision which has the purpose, effect or likely effect of substantially lessening competition.
Some conducts are prohibited per se, such as price fixing, as it is, without the need to prove, a substantial lessening of competition, and exclusionary provisions, i.e. market sharing and output control.
It is prohibited by the legislation any kind of misuse of market power and various forms of exclusive dealing. In particular, two types of anti-competitive vertical transactions are explicitly prohibited:
(1) the conditional supply (or acquisition) of goods or services
(2) refusing to supply for specified reasons (i.e., because purchaser refuses to agree to a conditional supply).
It is interesting that all the prohibited per se conducts do not apply to related body corporate, joint ventures or joint buying groups, unless those agreements substantially lessen competition.
And even more interesting is that certain cartel behaviors could be authorized by the ACCC (Australian Competition and Consumer Commission) if it can be demonstrated that the public benefit of the conduct outweighs the anticompetitive effect.
As a result, in Australian legislation authorization is available for all forms of conduct prohibited, save for misuse of market power.
For example a system of notification and authorization is available, recognizing potential benefits associated with exclusive dealing, and even if it is prohibited for a company to be engaged in a resale price maintenance practice, it is not prohibited to fix a maximum RPM (even if it substantially lessens competition!).
Finally, mergers are prohibited only if it can be demonstrated that they will have the effect or likely effect of substantially lessening competition in a market
All these prohibitions are civil ones (though criminal sanction will be soon introduced).

Australian Competition and Consumer Commission

The ACCC initiates investigations into cartels when it receoves informations that it may exist. No specific form are required to made a complaint and anyone can take complaints.
The ACCC has discretion whether to take or not to take action, without giving formal reasons.

The template and the legislation are downloadable here.


The United Kingdom competition law is regulated by two statutes:
· Competition Act 1998; (http://www.opsi.gov.uk/acts/acts1998/ukpga_19980041_en_1)
· Enterprise Act 2002; (http://www.opsi.gov.uk/Acts/acts2002/ukpga_20020040_en_1)

These two acts are aimed to avoid agreements between undertakings, decisions by associations of undertakings or concerted practices which may affect trade within the United Kingdom and have as their object or affect the prevention, restiction or distortion of competitoin. According to the U.K. cartels, a “ cartels activity” is an agreement which infringe Article 81 and/or the prohibiton in Chapter 1 of the Competition Act 1998 and involve price-fixing (including resale price maintenance) bid-rigging (collusive tendering), the establishment of output restrictions or quotas and/or market sharing or market dividing.
Under the Competition Act there is no difference between types of cartel, except in so far as price fixing agreements cannot benefit from an exemption from fines for small agreements as set out in section 39, which is agreements between undertakings whose total turnover is under 20 million pounds. Hard-core cartels attract severe financial penalties.
Section 188 of the Enterprise Act 2002 creates a cartel offence which states that an individual is guilty of it if he dishonestly agrees with one or more other persons to implement a hardcore cartel.
Who partecipates in a hardcore cartels infringes a civil law (under the Competiton Act 1998) and a criminal law (under the Enterprise 2002).


The Canadian’s Competition Law covering cartels are found in the Competition Act, R.S.C. 1985, c. C- 34 ( the Act).
You can find the text of these laws at:

The Act is a law of general application with the purpose of protecting competitive market outcomes in the Canadian economy. As a general rule, the Act applies to all competitive business activity in Canada.
Despite the fact that it does not provide a definition of what “cartel” is, section 45 of the Act prohibits clearly all actions such as, conspiracies, combinations, agreements or arrangements able to fix prices, restrict the total output and allocate markets. However, there are some exceptions (subsection 45(7)) for agreements that relate only to a service and to standards of competence and integrity that are reasonably necessary for the protection of the public interest.

In fact, unlike to US, the hardcore cartel are not “per se” illegal in Canada. “The Act prohibits only those conspiracies that have “undue” anticompetitive effects or that unreasonably enhance prices, and proof of a violation requires showing more than the mere fact of an agreement”. Participation in all of these actions are considered criminal offense.
Only the case of Bid-rigging, which is prohibited under section 47 of the Act, is "per se" illegal.

The Canadian agency, which investigates cartels is The Commissioner of Competition (Commissioner), an independent official appointed under the Act by the Governor in Council. It has the statutory responsibility to enforce and
administer the Act. In fact, The Commissioner heads the Competition Bureau (the Bureau), which is comprised of various branches, including the Criminal Matters Branch. More precisely, Cartel investigations are conducted by the officials and staff of the Criminal Matters Branch. However, the Bureau may seek assistance from other authorities including municipal or provincial police forces and the Royal Canadian Mounted Police. Bilateral and multilateral cooperation instruments and mutual legal assistance are always welcome.

Now, we are going to focus our attention on the decision making process applied by the Investigating Institutions in order to make effective their actions.
The cartel enforcement process in Canada generally is composed by three distinct stages: the preliminary examination, investigation and prosecution. The first two stages are conducted by the Bureau under the responsibility of the Commissioner.
In the third stage, the Commissioner may refer the matter to the Public Prosecution Service of Canada (PPSC) who act on behalf of the Attorney General of Canada and determine whether or not to prosecute the alleged cartel conduct.
Preliminary examinations may begin with a complaint from different actors such as, the public, a customer, a whistleblower, or an informant. They may also be initiated by Bureau staff based on research or media reports. Generally, complaints are not required to be made in a specific form and The Commissioner is not required to adopt a decision addressed to the complainant.

In conclusion, regarding leniency policy, the Act states that “only the first party (business enterprise or individual) who comes forward and meets all the requirements of the Immunity Program qualifies for full immunity. Moreover, if the first party fails to meet the requirements, a subsequent party that does meet the requirements may be recommended for immunity.
In Canada, both individual and business enterprises such us, firms, company or corporation are eligible for full or partial Immunity.
However, the conditions of availability of full leniency are very strict and they are reported in Part C of the Bulletin and, in particular, sections 14-17. It states that the following requirements must be met:
14. The party must take effective steps to terminate its participation in the illegal activity.
15. The party must not have been the instigator or the leader of the illegal activity, nor the sole beneficiary of the activity in Canada.
16. Throughout the course of the Bureau's investigation and subsequent prosecutions, the party must provide complete and timely co-operation:
17. Where possible the party will make restitution for the illegal activity.


The competition policy in the Czech Republic is ensured by Act. No. 143/2001 Coll, on the Protection of Competition. This Act further regulates the procedure for application of Articles 81 and 82 of the Treaty by the authorities of the Czech Republic with the authorities of other Member States of the European Community.

The Office for the Protection of Competition (further just „Office“) is the organization which control and investigates existence of cartels in the Czech Republic.

The definiton of cartel is explained as: „Agreements between undertakings, decisions by associations of undertakings and concerted practices which result or may result in the distortion of competition“. In spite of there is no exactly defined the hard cartel behavior, in accordance with the practice of the Office, the hard-core cartels include price-fixing, market-sharing, the allocation of customers and bid rigging.

Generally scope of the prohibition of hardcore cartels shall not apply to agreements where the combined share in the relevant market of the parties to the agreement does not exceed 10% for horizontal agreements and 15% for vertical agreements. However there are many exemptions where the prohibition will be always applied, for example direct or indirect price fixing, restriction or control of production or sale. Participation in hardcore cartels is an administrative offence.

The investigation process is commenced on the basis of a complaint, a leniency application or ex officio (the first step is made by authoritative power). In case of complaint, the Office has to decide if it starts proceedings or not. However there is no time limit for taking this decision.

If the Office would decide to investigate a case, it may:

- enter any premises, land, means of transport of the undertakings that are subject to the investigation;
- examine the books and other business records and make copies or extracts;
- ask for oral explanations on the spot during inspections;
- ask witnesses to testify in the administrative proceedings conducted by the office;
- etc.

The Czech Republic jurisdiction provides full and also partial leniency. The first undertaking, who provides the Office with relevant information on the existence of a cartel, may be awarded absolute immunity from a fine. For granting whole immunity from fines the Office can not have any information about the existence of cartel before the application for leniency is received by the Office.

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