Hub-and-spoke arrangements are horizontal restrictions on the supplier or retailer level (the “spokes”), which are implemented through vertically related players that serve as a common “hub” (e.g., a common manufacturer, retailer or service provider). The “hub” facilitates the co-ordination of competition between the “spokes” without direct contacts between the spokes. In the extreme, the effects of a horizontal hard-core cartel can be achieved purely based on indirect communication between the horizontally aligned members of a hub and spoke arrangement.
The role of vertical restraints in facilitating horizontal collusion meets renewed interest by the enforcement and business community, in particular in the light of an increased use of pricing related tools and contractual provisions in e-commerce transactions. The business community faces the challenge of complying with legal standards which may be still unclearly defined, and awaiting clarification by the courts, through enforcement practice or agency guidelines.
In December 2019, the OECD held a roundtable to explore different types of vertically organised horizontal collusion, theories of harm, standards of proof, and specific challenges raised in the e-commerce context. Market structures that warrant particular attention by competition agencies when pursuing these kinds of cases, and prioritisation of enforcement action vis-à-vis standard hard-core cartel arrangements were also considered.
Matthew BENNETT Bio
Vice President, Charles River Associates, London
Rachel S. BRASS Bio
Partner, Gibson Dunn, San Francisco
Okeoghene ODUDU Bio
Senior Lecturer, University of Cambridge, Faculty of Law
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