Antitrust And Mergers

Anti-trust and mergers

Open and vigorous competition between undertakings in the market is good for consumers because it results in lower prices, new products of a better quality and more choice. Constant “rivalry” on the market of goods and services and the “fight” for customers drives out the inefficient producers and forces the remaining ones to innovate, lower their prices, and improve their products to attract more consumers. At the same time, they increase their profit and their market shares grow. When markets are competitive, effective but fair-dealing businesses flourish.

Free, effective competition and well functioning markets drive the long-term productivity growth essential for the creation of new products, application of new technologies and technological processes which increase the performance of competing market players and cut their costs. Effective competition binds together science and industry, different regions and countries, in the interests of both consumers and wider economy.

 

Competition rules

The purpose of competition rules is to create a level playing field and clear rules of the game for all players in the market. The objective of these rules is not to protect the undertakings or their rivals but to establish a regulatory framework providing for permissible behaviour of competing undertakings and enhance competition to the benefit of the consumers.

 

What is prohibited?

  • Anti-competitive agreements between businesses that prevent, restrict or distort competition and affect trade in Croatia or outside its territory, if such practices take effect Croatia. Agreements likely to be prohibited include those which fix the prices to be charged for goods or services, limit production, carve up markets, discriminate between customers (e.g. charge different prices or impose different terms where there is no difference in what is being supplied). Decisions of associations of businesses are also covered, as are concerted practices (i.e. cooperation which falls short of an agreement or decision).
  • Cartels are the most serious form of an anti-competitive agreement. They are agreements between businesses – competing undertakings not to compete with each other. Cartel agreements can often be verbal and secret and may be hard to uncover.
  • Abuse of a dominant market position – A dominant position in a market essentially means that a business is generally able to behave independently of competitive pressures, such as other competitors, in that market. Conduct which may be considered an abuse by a business in a dominant position includes: charging excessively high prices, limiting production, refusing to supply an existing long standing customer without good reason, charging different prices to different customers where there is no difference in what is being supplied, making a contract conditional on factors that have nothing to do with the subject of the contract.

 

Merger control

Mergers above a certain financial threshold must be notified to the CCA for assessment.  The idea is not to hold up “good mergers” and to protect the interests of consumers where it has the power to block mergers where it finds that it will lead to a “significant impediment to competition”.