An agreement between undertakings, also known as a horizontal agreement, is a type of collaboration between businesses that are operating in the same market. This type of agreement can be made between direct competitors or between businesses that operate in the same industry.
The purpose of an agreement between undertakings is to encourage cooperation between businesses that would otherwise be competing against each other. This can lead to benefits for both businesses, such as reduced costs, increased efficiency, and improved access to resources.
However, it is important to note that these agreements can also have negative effects on competition. Agreements between undertakings can lead to price-fixing, market sharing, and other anti-competitive practices that can harm consumers and smaller businesses in the market.
As a result, agreements between undertakings are heavily regulated by the European Union and other regulatory bodies around the world. These agreements must be reviewed to ensure that they do not violate antitrust laws and that they do not harm competition in the market.
There are several types of agreements between undertakings, including:
1. Price-fixing agreements: These agreements involve businesses agreeing to set prices at a certain level, which can harm competition by preventing other businesses from offering lower prices.
2. Market-sharing agreements: These agreements involve businesses dividing up the market between them, which can harm competition by preventing other businesses from entering the market.
3. Joint production agreements: These agreements involve businesses collaborating on the production of goods or services, which can lead to increased efficiency and reduced costs.
4. Joint research and development agreements: These agreements involve businesses collaborating on research and development projects, which can lead to the development of new products and technologies.
Agreements between undertakings can be beneficial for businesses and consumers alike if they are structured in a way that promotes competition and innovation. However, it is important to ensure that these agreements are carefully reviewed and regulated to prevent anti-competitive practices and to protect consumers.