Collusive Practices Inside a Business Network: The Case of Information Exchange
Business networks are systems of business cooperation integrating several firms that have at the same time cooperation and competition relationships, what makes them a relevant phenomenon for Competition Law. This paper analyses whether some agreements between network members may infringe Art. 101.1 TFEU, taking as an example one of the most important features of business networks – the information exchanges inside them. To this aim, it delimits the different kinds information exchanges taking place in horizontal or vertical networks, identifies the most relevant cases for Competition Law, and proposes an adequate assessment methodology that takes into account the existence and features of the network. The paper therefore concludes that competition law rules cannot be automatically applied when the cooperating companies belong to a business network, and that an accurate competitive analysis in these cases has to consider also the existence, aims, interests, and organizational and functional needs of the network
The Gary Dinners and the Meaning of Concerted Action
Between 1907 and 1911, executives of American steel manufacturers gathered in a series of social events and meetings that became known as the Gary dinners. At the meetings, the participants announced the prices they intended to charge, but made no promises that they would adhere to those prices. The architect of the dinners, Judge Elbert H. Gary, chairman of the board of the United States Steel Corporation, saw them as a lawful way to stabilize steel prices by fostering information-sharing and an ethos of cooperation. The government agreed that the dinners stabilized prices, but took a different view of their legality: it brought suit in 1911, asking the court to dissolve U.S. Steel as an illegal monopoly. In 1915, the trial court held that the dinners amounted to price fixing, but that U.S. Steel's resort to them only proved that the firm could not control steel prices on its own and therefore could not have monopolized the industry. In 1920, the Supreme Court affirmed. Commentators have long questioned the holding that U.S. Steel lacked monopoly power. In this essay, however, I focus on the intermediate conclusion that the dinners involved concerted action. I describe the legal and historical circumstances in which the dinners occurred and what happened at them. I then examine how the courts analyzed the dinners and extract some lessons that might help modern courts clarify the boundaries of the Sherman Act's agreement requirement.
EFFECTS OF COST CHANGES ON OLIGOPOLISTS' PROFITS*
This paper considers cost changes affecting all firms in a constant-returns-to-scale Cournot oligopoly. Cost increases may paradoxically benefit some or even all firms. Whether a firm benefits or is harmed depends only on whether its market share exceeds a threshold level, on whether industry costs increase or decrease, on the number of firms, and on the elasticity of the demand curve's slope (or equivalently, the fraction of cost changes that are passed on). Conditions where industry structure alone determines the effect of cost changes on firms' profits and conditions where cost increases necessarily harm some firms are developed. Copyright 1992 by Blackwell Publishing Ltd.