Subcontracting Agreements Competition Law

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Tafo If the production is carried out jointly by two or more parties, it can be carried out either by a joint venture (i.e. a jointly controlled company) or by a more flexible form. B cooperation, such as a “subcontract” that can be horizontal or vertical in nature. However, agreements limited to joint sales (unlike joint sales in the context of cooperation with common production/specialization, as described above) are considered to be intended to restrict competition within the meaning of Article 101, paragraph 1, and must therefore always be taken into account under Article 101, paragraph 3. This also applies where the agreement is not exclusive (i.e. when the parties can sell outside of cooperation) until the agreement results in general price coordination. The Commission notes that price fixing (i.e. joint sales) can generally only be justified if it is essential for the integration of other marketing functions and that this integration will lead to considerable efficiency gains. As part of a horizontal subcontracting agreement, one party (the “contractor”) entrusts the manufacture of a product to another party operating at the same market level (the “subcontractor”). The parties must not be real or potential competitors for the agreement to be considered “horizontal. On the other hand, outsourcing and nearshoring are the most likely types of outsourcing to raise competition issues, since the transfer of a team of employees or assets may constitute a merger within the CEMR and it is more likely that the new services will be provided at a level relatively close to the initial services. National competition authorities, such as the United Kingdom`s Office of Fair Trading (OFT), share a similar view, as they consider that the outsourcing of situations related to the transfer of employees and assets is relevant under the UK control of mergers, provided that the transaction results in the companies concerned being no longer separated. The “society” in this context is naturally the subject of outsourcing. In December 2010, the European Commission published updated guidelines for the application of Article 101 to horizontal cooperation agreements (guidelines).