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Horizontal Agreements Competition Law

Even if companies A and B shared most of their variable costs, but only a substantial portion of these costs, this production agreement could result in a collusive outcome between A and B, which would indirectly eliminate competition between the two parties. The probability depends not only on the question of the cost community (which are high in this case), but also on the characteristics of the market in question, such as transparency. B, stability and degree of concentration. only in the sense that it restricts the ability of parties to compete as independent economic operators or parties to other competing agreements or parties to third parties; Cooperation in research and development can limit competition in a number of ways. First, it can reduce or slow down innovation, which can lead to less or less good products coming to market later than they normally would. Second, cooperation in the area of research and development D in product or technology markets can significantly reduce competition between parties outside the scope of the agreement or allow anti-competitive coordination in those markets, which can lead to higher prices. A silos problem can only arise in the context of cooperation involving at least one player with a significant degree of market power (which is not necessarily a dominant position) for a key technology and the exclusive exploitation of results. Efficiency gains generated by much-needed restrictions must be passed on to consumers to a level that predominates over the restrictive effects of the exchange of information on competition. The lower the market power of the parties to the exchange of information, the more likely it is that efficiency gains will be passed on to consumers to a extent that outweighs the restrictive effects of competition. Production agreements can foster competition if they offer efficiency gains in the form of cost savings or better production technologies.

Joint production saves companies costs that they would otherwise duplicate. They can also produce at a lower cost if cooperation allows them to increase production, when marginal costs decrease with production, i.e. through economies of scale. Joint production can also help companies improve product quality by combining complementary skills and know-how. Cooperation can also enable companies to increase the diversity of products they could not or would not otherwise afford. If joint production allows the parties to increase the number of different types of products, it can also save money by saving areas of application.

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