Anti-competitive agreements are agreements among competitors to prevent, restrict or distort competition. Section 34 of the Competition Act prohibits agreements, decisions and practices that are anti-competitive.
A particularly serious type of anti-competitive agreement would be those made by cartels. Cartel agreements are usually to fix prices, to rig competitive tendering process, to divide up markets or to limit production. As a result, the cartelists have little or no incentive to lower prices or provide better quality goods or services. Based on economic studies, cartels overcharge by 30 per cent on average. There are four main types of cartel agreements:
Competition in a market can be restricted in various other ways other than those set out above. For instance, there may be other types of agreements among competitors such as price guidelines or recommendations, joint purchasing or selling, setting technical or design standards, and agreement to share business information. CCCS will take action in cases where there is an appreciable adverse effect on competition, that is, where competition is harmed considerably. In the case of price guidelines or recommendations, CCCS has found price recommendations and fee guidelines, mandatory or voluntary, to be generally harmful to competition, and encourages all businesses to set their prices independently.