Define: Horizontal Scheme

A horizontal scheme refers to an agreement or arrangement between competitors operating at the same level of the supply chain to coordinate their actions, prices, or market strategies. It is typically considered illegal under antitrust laws.

Participating in a horizontal scheme can lead to severe legal consequences, including hefty fines, criminal charges, and reputational damage. It is essential to avoid engaging in any anti-competitive behavior.

Identifying a horizontal scheme can be challenging, as it often involves secretive communication and covert actions. However, signs may include suspiciously uniform pricing, coordinated market strategies, or sudden changes in market dynamics. Consult with legal experts or antitrust authorities for assistance.

In general, horizontal schemes are considered illegal due to their anti-competitive nature. However, there may be limited exceptions, such as when the scheme is necessary to achieve legitimate pro-competitive goals, like joint research and development efforts. Consult with legal professionals to determine the legality of a specific scheme.

If you suspect your competitors are involved in a horizontal scheme, gather evidence and consult with legal experts or antitrust authorities. They can guide you on the appropriate steps to take, such as filing a complaint or initiating legal action.

In some cases, unknowingly participating in a horizontal scheme may provide a defence against liability. However, it is crucial to demonstrate that you had no knowledge of the scheme and took immediate action to rectify the situation upon discovery.

To ensure compliance, educate yourself and your employees about antitrust laws, establish clear internal policies prohibiting anti-competitive behavior, and regularly monitor and audit your business practices. Seek legal advice to ensure your compliance efforts are comprehensive.

A horizontal scheme involves competitors at the same level of the supply chain, while a vertical agreement involves entities at different levels, such as manufacturers and distributors. Vertical agreements may be subject to different legal standards and may not always be considered anti-competitive.

No, even if a horizontal scheme appears to benefit consumers in the short term, it is still considered illegal. Antitrust laws aim to protect competition and prevent harm to the overall market, rather than focusing solely on immediate consumer benefits.

Some jurisdictions offer leniency programs that provide reduced penalties or immunity to participants who come forward and cooperate with antitrust authorities. However, eligibility and conditions vary, so it is crucial to consult with legal experts to understand the specific requirements and benefits of such programs.