Answer to Question #46364 in Economics for Jafta

Question

What are the main types of horizontal agreements prohibited by and the rationale for their inclusion in the Competition Act?

Answer 1

1. Agreements that directly or indirectly determine purchase or sale prices
2. Agreements that limits or controls production, supply, markets, technical development, investment or provision of services
3. Agreements that shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or the number of customers in the market or any other similar way
4. Agreements that directly or indirectly results in bid-rigging or collusive bidding

Horizontal agreements tend to restrain competition.