Guidance on Agreements between Competitors to Reduce Capacity
In January 2011, the Competition Authority (predecessor of the CCPC) reached a settlement in its long-running proceedings against the Beef Industry Development Society (BIDS). This settlement was reached at a time when the BIDS case had been referred back to the High Court by the Supreme Court after the European Court of Justice had decided that an agreement between competitors to reduce capacity in the Irish beef processing industry was prohibited by European competition law.
As a result of this settlement, BIDS withdrew its High Court proceedings whereby it was seeking to claim that the BIDS agreement satisfied certain efficiency exemptions under European competition law.
This Guidance Notice reflects the substance of the decisions of the various courts involved in the BIDS case and provides guidance on the application of Irish/European competition law to businesses considering entering into agreements, or any form of co-ordination to reduce capacity in specific industries in Ireland.
Please read our Guidance Note on the BIDS case for further detail on this topic.
This Notice is published pursuant to section 30(1)(d) of the Competition Act 2002. This section makes it a statutory function of the CCPC to publish notices containing practical guidance of how to achieve compliance with the provisions of Irish competition law. Notices set out the considered views of the CCPC relating to a particular area of competition law, and are provided for guidance purposes only. It is ultimately a matter for the courts to decide whether or not a breach of the Irish competition law has occurred.
Is there more detail on this topic?
Trade associations can play a productive, pro-competitive role in the development of a sector, thus promoting the efficient functioning of the market. However, the CCPC has often encountered situations where trade associations have been used to restrict competition. This has occurred where a trade association either coordinates anti-competitive activities, or provides competitors with the opportunity to meet and form anti-competitive agreements.
Please read our Notice on Activities of Trade Associations and Compliance with Competition Law for further detail on this topic.
However, if you have read the guidance and still have concerns about a particular agreement to reduce capacity or other forms of coordinated activity you can contact us.
Relevant provisions
Section 30(1)(d) of the Competition Act 2002
Section 4 of the Competition Act 2002
Article 101 of the Treaty for the Functioning of the EU
