agreement between undertakings

Agreements between undertakings - on supporting research programmes, for example - can conceal a restrictive trade practice designed to eliminate a rival.

With the policy on cartels, the aim has always been to deny legitimacy to other ways of distorting competition, in particular certain agreements between undertakings.

UK law must apply this interpretation when dealing with inter member-state agreements between undertakings.

"Neither the conduct of the Bayer Group nor the attitudes of the wholesalers were factors constituting an agreement between undertakings," the court said in a statement.

There is also increasing recognition of the risk that agreements between undertakings with a dominant market position, even if they comply with the legal conditions for block exemption, may still have a distorting effect on competition.

Art 85(1) of the EC Treaty prohibits all agreements between undertakings that may affect trade between member states and which have as their object, or effect, the prevention, restriction or distortion of competition within the Common Market.

The following are the two main aspects of the new system: abolishing the notification system in respect of agreements between undertakings and establishing uniform conditions under which undertakings are to operate in the context of the common market.

The application of Community competition rules shall become the norm enabling undertakings to carry out projects in a much simpler manner than happens under the present system where agreements between undertakings are governed not just by Community provisions, but also by 25 national legal systems.