Price increases – public discussion by competitors and their trade associations can contravene competition law.

In the media recently there has been
Considerable discussion was held about the price increases that might be forthcoming and that consumers will remember.
to feel. Various important consumer products have been discussed, such as
food and electricity.

Competitors and interest groups
Companies have taken part in this public debate. For example, employees
Two companies that are competitors in the production of a specific product category could
together on a talk show and discussed price rises. In their conversation, arguments were put forward for it.
an argument that rising raw material prices had led to an increase in the said products to
of consumers and they also announced that further price increases were on the horizon. In
In another instance, interviews were conducted with the managers of grocery chains and they were quoted.
that substantial increases were on the horizon.

There are recent examples of that
representatives of business interest groups have publicly stated that
that increases in various essential goods are forthcoming and, where appropriate, make a case for
the necessity of such increases.

The Competition Act restricts competitors and their associations.

On this occasion, it is appropriate to remind you of
that competition law prohibits any form of collusion between companies which has the effect of
objective or which results in competition being prevented or restricted.
For example, it can be considered illegal collusion if competitors discuss with each other about
anticipated price increases or to pass on information about them to one another, including in
public debate, e.g. the media.

For competition to thrive,
companies having to live with a certain uncertainty about how their competitors intend to
respond to external circumstances as and when, e.g. price increases from
suppliers. In a competitive environment, companies look for different ways to offer
products or services at the most favourable price, e.g. streamlining operations, seeking better
cheaper from other suppliers or reduce dividends. However, if the company is
Overconfidence in knowledge of competitors' responses reduces their incentive to compete.
and keep prices down.

Among other reasons for these reasons
competition law also prohibits any form of competition-restricting conduct by
trade associations. For example, the sharing of information is prohibited.
agreement on forthcoming price increases or their joint justification for the increases.

It is recognised that conduct of this kind
tagging is particularly harmful in oligopolistic markets.

Companies and interest groups
They can expect the Competition Authority to take indications of
The anti-competitive conduct described here is a matter of serious concern. A breach of
Competition law can involve strict penalties.

A reminder to companies and their organisations

With the above in mind, considers
It is important for the Competition Authority to stress the following to companies and
their organisations:

• Companies should under no circumstances
  provide information to competitors about proposed or likely changes to
  becomes, neither publicly, in the sphere of interest groups, directly, nor by means of
  otherwise.
• Business interest groups must proceed with caution.
  when it comes to discussion and education that can influence market behaviour
  of the members. All their participation in discussions about price and pricing is
  particularly hazardous and should not take place unless it is guaranteed that it is
  within the limits permitted by law.

• In a competitive market, a rise in the input price should not
  automatically lead to an increase in the price to consumers. Competition law provides for
  for each and every company to make its own arrangements and take
  independent decisions to respond to such challenges, in their own
  on operational grounds and without any consultation with competitors or incentives
  from interest groups.

• The above applies regardless of whether production companies are involved,
  importing companies, other suppliers or retailers.

Further instructions to
Trade association of companies and information on previous cases of this kind can be found at
this one instructions page.