The European Union`s competition law plays a crucial role in ensuring the fair and free market for businesses operating within the EU. One of the areas where competition law has become increasingly important is joint purchasing agreements.
A joint purchasing agreement is a type of agreement whereby two or more companies come together to purchase goods or services from a supplier. Joint purchasing agreements are commonly used by companies to obtain better prices, improve the quality of goods or services, and streamline procurement processes. However, joint purchasing agreements can also have negative effects on competition if they lead to anti-competitive behavior.
In the EU, joint purchasing agreements are governed by competition law. The key concerns of competition law in relation to joint purchasing agreements are the potential for collusion, price-fixing, and anti-competitive behavior. Competition law aims to ensure that joint purchasing agreements do not lead to a reduction in competition, which could result in higher prices and reduced choice for consumers.
The EU competition law has specific rules for joint purchasing agreements among competitors. According to Article 101 of the Treaty on the Functioning of the European Union (TFEU), agreements among competitors are prohibited if they have the object or effect of restricting competition within the EU.
Furthermore, the European Commission has published guidelines on the applicability of EU competition law to joint purchasing agreements. The guidelines provide a framework for assessing the compatibility of joint purchasing agreements with EU competition law. According to the guidelines, joint purchasing agreements can be permissible if they lead to cost savings that benefit consumers, do not restrict competition unduly, and do not lead to the foreclosure of competitors from the market.
Overall, joint purchasing agreements can benefit businesses and consumers alike by facilitating cost savings and improving the quality of goods and services. However, it is important for companies to ensure that their joint purchasing agreements comply with EU competition law to avoid anti-competitive behavior. Companies should consult with an experienced competition lawyer to ensure that their joint purchasing agreements are in line with EU competition law.