Vertical agreements under scrutiny

Control of the entire chain from production to consumer will be the subject of a research conference that the Competition Authority is organising in Stockholm.

Do consumers stand to gain or lose when a manufacturer determines prices all the way through to the retail stage? Not even the researchers can agree on the answer. The Competition Authority is now contributing to the debate on this controversial issue by organising a seminar on the subject of vertical restraints.

The EU is currently revising its rules on vertical agreements (block exemption), and is due to complete this work in 2010. Consequently, this is an appropriate time to discuss whether present rules help improve competition or perhaps are even detrimental to it.

“Bringing together researchers and practitioners in this way to discuss the effects of vertical agreements in light of the current revision of EU rules will, I think, be very fruitful,” says Arvid Fredenberg, Acting Chief Economist at the Competition Authority.

In some situations, vertical agreements can distort competition by making it easier for manufacturers to establish cartels, or for retailers to do so, but in practice most vertical agreements are beneficial. They may for instance eliminate double marginalisation.

To shed light on the question of which types of vertical agreements are good or bad for competition and the consumer, the Competition Authority is organising an international seminar in Stockholm. The seminar title is The Pros and Cons of Vertical Restraints. An anthology of the same name has been produced in which some of the world leading researchers in this field contribute their views on the subject.

“With increased research, we can learn more about this issue, which means that in future we’ll be in a position to make better assessments in our investigations,” says Arvid Fredenberg. “That will work to the consumers’ benefit.”

Some 120 participants from 20-odd countries will be attending the conference, including researchers, public officials, lawyers and consultants. It is the seventh consecutive year that this type of conference is being held under Competition Authority auspices.

For further information, please contact:

Jimmy Dominius, Press Officer, tel+46 (0)8-700 15 80 or +46 (0)73-773 15
Arvid Fredenberg, Acting Chief Economist, tel +46 (0)73-700 15 41 or +46 (0)73-773 15 41

The conference will take place in Stockholm on 7 November.

The research anthology The Pros and Cons of Vertical Restraints will be published on the Competition Authority´s website.